This is filed pursuant to Rule 497(e).
File Nos.: 33-85850 and 811-08838
For more information about the Portfolio, the following documents are available
upon request:
- - ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The Portfolio's annual and semi-annual reports to shareholders contain
additional information on the Portfolio's investments.
- - STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Portfolio has an SAI, which contains more detailed information about the
Portfolio, including its operations and investment policies. The Portfolio's
SAI is incorporated by reference into (and is legally part of) this prospectus.
You may request a free copy of a current annual/semi-annual report or the SAI
by contacting your Investment Executive, or by contacting Alliance:
BY MAIL: C/O ALLIANCE FUND SERVICES, INC.
P.O. BOX 1520, SECAUCUS, NJ 07096
BY PHONE: For Information: (800) 824-1916
For Literature: (800) 824-1916
Or you may view or obtain these documents from the SEC:
IN PERSON: at the SEC's Public Reference Room in Washington, D.C.
BY PHONE: 1-800-SEC-0330
BY MAIL: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET: www.sec.gov
You also may find more information about Alliance on the Internet at:
www.Alliancecapital.com.
TABLE OF CONTENTS
RISK/RETURN SUMMARY 2
PERFORMANCE AND BAR CHART INFORMATION 2
FEES AND EXPENSES OF THE PORTFOLIO 3
OTHER INFORMATION ABOUT THE PORTFOLIO OBJECTIVES, STRATEGIES, AND RISKS 4
INVESTMENT OBJECTIVES AND STRATEGIES 4
RISK CONSIDERATIONS 5
MANAGEMENT OF THE PORTFOLIO 6
PURCHASE AND SALE OF SHARES 6
HOW THE PORTFOLIO VALUES ITS SHARES 6
HOW TO BUY SHARES 6
HOW TO SELL SHARES 7
DIVIDENDS, DISTRIBUTIONS AND TAXES 7
DISTRIBUTION ARRANGEMENTS 8
FINANCIAL HIGHLIGHTS 8
WAYNE HUMMER
INVESTMENTS LLC
INTRODUCES...
ALLIANCE
MONEY
MARKET
FUND
GENERAL MUNICIPAL PORTFOLIO
PROSPECTUS
APRIL 1, 1999
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
WAYNE HUMMER
INVESTMENTS LLC
300 South Wacker Drive
Chicago, Illinois 60606
This prospectus describes the General Municipal Portfolio (the "Portfolio") of
the Alliance Money Market Fund. The Portfolio's investment adviser is Alliance
Capital Management L.P., a global investment manager providing diversified
services to institutions and individuals through a broad line of investments
including more than 100 mutual funds.
RISK/RETURN SUMMARY
The following is a summary of certain key information about the Portfolio. You
will find additional information about the Portfolio, including a detailed
description of the risks of an investment in the Portfolio, after this summary.
This prospectus has additional descriptions of the Portfolio's investments in
the discussion under "Other Information About the Portfolio's Objectives,
Strategies, and Risks." That section also includes more information about the
Portfolio, its investments, and related risks.
OBJECTIVES: The investment objectives of the Portfolio are--in the following
order of priority--safety of principal, excellent liquidity and, to the extent
consistent with the first two objectives, maximum current income that is exempt
from income taxes to the extent described below.
PRINCIPAL INVESTMENT STRATEGY: The Portfolio is a "money market fund" that
seeks to maintain a stable net asset value of $1.00 per share. The Portfolio
pursues its objectives by maintaining a portfolio of high-quality money market
securities.
PRINCIPAL RISKS: The principal risks of investing in the Portfolio are:
- - INTEREST RATE RISK This is the risk that changes in interest rates will
affect the yield or value of the Portfolio's investments in debt securities.
- - CREDIT RISK This is the risk that the issuer or guarantor of a debt security,
or the counterparty to a derivatives contract, will be unable or unwilling to
make timely interest or principal payments, or to otherwise honor its
obligations. The degree of risk for a particular security may be reflected in
its credit rating. Credit risk includes the possibility that any of the
Portfolio's investments will have its credit ratings downgraded.
ANOTHER IMPORTANT THING FOR YOU TO NOTE:
An investment in the Portfolio is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Portfolio seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose money by investing in the Portfolio.
PERFORMANCE AND BAR CHART INFORMATION
The Risk/Return Summary includes a table showing the Portfolio's average annual
returns and a bar chart showing the Portfolio's annual returns. The table and
the bar chart provide an indication of the historical risk of an investment in
the Portfolio by showing:
- - the Portfolio's average annual returns for one year and the life of the
Portfolio; and
- - changes in the Portfolio's performance from year to year over the life of the
Portfolio.
The Portfolio's past performance does not necessarily indicate how it will
perform in the future.
You may obtain current yield information for the Portfolio by calling
1-800-221-9513 or your Investment Executive.
2
PERFORMANCE TABLE
SINCE
1 YEAR INCEPTION**
- -------------------------
2.73% 2.81%
* INCEPTION DATE:12/29/95.
** INCEPTION DATE:12/13/95.
BAR CHART
n/a n/a n/a n/a n/a n/a n/a 2.78% 2.93% 2.73%
89 90 91 92 93 94 95 96 97 98
During the periods shown in the bar chart, the highest return for a quarter was
.77% (quarter ending June 30, 1997) and the lowest return for a quarter was
.65% (quarter ending September 30, 1998).
FEES AND EXPENSES OF THE PORTFOLIO
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Portfolio.
SHAREHOLDER TRANSACTION EXPENSES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
The Portfolio has no sales load on purchases or reinvested dividends, deferred
sales loads, or redemption or exchange fees.
ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO
ASSETS) AND EXAMPLE
ANNUAL PORTFOLIO OPERATING EXPENSES
Management Fees .50%
12b-1 Fees .45%
Other Expenses .22%
Total Portfolio Operating Expenses 1.17%
Waiver and/or Expense Reimbursement* (.17)%
Net Expenses 1.00%
* Reflects Alliance's contractual waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Portfolio's operating expenses.
EXAMPLES
The examples are to help you compare the cost of investing in the Portfolio
with the cost of investing in other funds. They assume that you invest $10,000
in the Portfolio for the time periods indicated and then redeem all of your
shares at the end of those periods. They also assume that your investment has a
5% return each year, that the Portfolio's operating expenses stay the same and
that all dividends and distributions are reinvested. Your actual costs may be
higher or lower.
1 Year $ 102
3 Years $ 318
5 Years $ 552
10 Years $1,225
3
OTHER INFORMATION ABOUT THE PORTFOLIO'S OBJECTIVES, STRATEGIES, AND RISKS
This section of the prospectus provides a more complete description of the
principal investment objectives, strategies, and risks of the Portfolio.
Please note:
- - Additional descriptions of the Portfolio's strategies and investments, as
well as other strategies and investments not described below, may be found in
the Portfolio's Statement of Additional Information or SAI.
- - There can be no assurance that the Portfolio will achieve its investment
objectives.
INVESTMENT OBJECTIVES AND STRATEGIES
The Portfolio's investment objectives are--in the following order of
priority--safety of principal, excellent liquidity and, to the extent
consistent with the first two objectives, maximum current income exempt from
Federal income taxes to the extent described below. As a money market fund, the
Portfolio must meet the requirements of SEC Rule 2a-7. The Rule imposes strict
requirements on the investment quality, maturity, and diversification of the
Portfolio's investments. Under Rule 2a-7, the Portfolio's investments must each
have a remaining maturity of no more than 397 days and the Portfolio must
maintain an average weighted maturity that does not exceed 90 days.
The Portfolio seeks maximum current income that is exempt from Federal income
taxes by investing principally in a diversified portfolio of high-quality
municipal securities. The Portfolio's income may be subject to state or local
income taxes.
The Portfolio may invest without limit in tax-exempt municipal securities that
are subject to the Federal alternative minimum tax (the "AMT").
MUNICIPAL SECURITIES. The Portfolio's investments in municipal securities
include municipal notes and short-term municipal bonds. Municipal notes are
generally used to provide for short-term capital needs and generally have
maturities of 397 days or less. Examples include tax anticipation and revenue
anticipation notes, which are generally issued in anticipation of various
seasonal revenues, bond anticipation notes, and tax-exempt commercial paper.
Short-term municipal bonds may include general obligation bonds, which are
secured by the issuer's pledge of its faith, credit, and taxing power for
payment of principal and interest, and revenue bonds, which are generally paid
from the revenues of a particular facility or a specific excise or other source.
The Portfolio may invest in variable rate obligations whose interest rates are
adjusted either at predesignated periodic intervals or whenever there is a
change in the market rate to which the security's interest rate is tied. These
adjustments tend to minimize changes in the market value of the obligation and,
accordingly, enhance the ability of the Portfolio to maintain a stable net
asset value. Variable rate securities purchased may include participation
interests in industrial development bonds backed by letters of credit of
Federal Deposit Insurance Corporation member banks having total assets of more
than $1 billion.
The Portfolio may invest in restricted securities (i.e., securities subject to
legal or contractual restrictions on resale).
The Portfolio's municipal securities at the time of purchase are rated within
the two highest quality ratings of Moody's or Standard & Poor's or judged by
the Adviser to be of comparable quality. Securities also must meet credit
standards applied by the Adviser.
The quality and liquidity of the Portfolio's investments in municipal
securities are supported by credit and liquidity enhancements, such as letters
of credit, from third party financial institutions. The Portfolio continuously
monitors the credit quality of third parties; however, changes in the credit
quality of these financial institutions could cause the Portfolio's investments
backed by that institution to lose value and affect the Portfolio's share price.
The Portfolio also may invest in stand-by commitments, which may involve
certain expenses and risks, but stand-by commitments are not expected to
comprise more than 5% of the Portfolio's net assets. The Portfolio may commit
up to 15% of its net assets to the purchase of when-issued securities. The
Portfolio's Custodian will maintain liquid assets having value equal to, or
greater than, these commitments. The price of when-issued securities, which is
generally expressed in yield terms, is fixed at the time the commitment to
purchase is made, but delivery and payment for these securities takes place at
a later time. Normally, the settlement date occurs from within ten days to one
month after the purchase of the issue.
4
TAXABLE INVESTMENTS. The Portfolio may invest in taxable investments including
obligations of the U.S. Government and its agencies, high-quality certificates
of deposit and bankers' acceptances, prime commercial paper, and repurchase
agreements.
RISK CONSIDERATIONS
The Portfolio's primary risks are interest rate risk and credit risk. Because
the Portfolio invests in short-term securities, a decline in interest rates
will affect the Portfolio's yields as these securities mature or are sold and
the Portfolio purchases new short-term securities with lower yields. Generally,
an increase in interest rates causes the value of a debt instrument to
decrease. The change in value for shorter-term securities is usually smaller
than for securities with longer maturities. Because the Portfolio invests in
securities with short maturities and seeks to maintain a stable net asset value
of $1.00 per share, it is possible, though unlikely, that an increase in
interest rates would change the value of your investment.
Credit risk is the possibility that a security's credit rating will be
downgraded or that the issuer of the security will default (fail to make
scheduled interest and principal payments). The Portfolio invests in
highly-rated securities to minimize credit risk.
The Portfolio may invest up to 10% of its net assets in illiquid securities.
Investments in illiquid securities may be subject to liquidity risk, which is
the risk that, under certain circumstances, particular investments may be
difficult to sell at an advantageous price. Illiquid restricted securities also
are subject to the risk that the Portfolio may be unable to sell the security
due to legal or contractual restrictions on resale.
The Portfolio's investments in U.S. dollar-denominated obligations (or credit
and liquidity enhancements) of foreign banks, foreign branches of U.S. banks,
U.S. branches of foreign banks, and commercial paper of foreign companies may
be subject to foreign risk. Foreign securities issuers are usually not subject
to the same degree of regulation as U.S. issuers. Reporting, accounting, and
auditing standards of foreign countries differ, in some cases, significantly
from U.S. standards. Foreign risk includes nationalization, expropriation or
confiscatory taxation, political changes or diplomatic developments that could
adversely affect the Portfolio's investments.
The Portfolio also is subject to management risk because it is an actively
managed portfolio. Alliance will apply its investment techniques and risk
analyses in making investment decisions for the Portfolio, but there is no
guarantee that its techniques will produce the intended result.
The Portfolio faces municipal market risk. This is the risk that special
factors may adversely affect the value of municipal securities and have a
significant effect on the value of the Portfolio's investments. These factors
include political or legislative changes, uncertainties related to the tax
status of municipal securities, or the rights of investors in these securities.
The Portfolio's investments in certain municipal securities with principal and
interest payments that are made from the revenues of a specific project or
facility, and not general tax revenues, may have increased risks. Factors
affecting the project or facility, such as local business or economic
conditions, could have a significant effect on the project's ability to make
payments of principal and interest on these securities.
YEAR 2000. Many computer systems and applications in use today process
transactions using two-digit date fields for the year of the transaction,
rather than the full four digits. If these systems are not modified or
replaced, transactions occurring after 1999 could be processed as year "1900",
which could result in processing inaccuracies and computer system failures.
This is commonly known as the Year 2000 problem. The failure of any of the
computer systems employed by the Portfolio's major service providers to process
Year 2000 related information properly could have a significant negative impact
on the Portfolio's operations and the services that are provided to the
Portfolio's shareholders. In addition, to the extent that the operations of
issuers of securities held by the Portfolio are impaired by the Year 2000
problem, or prices of securities held by the Portfolio decline as a result of
real or perceived problems relating to the Year 2000, the value of the
Portfolio's shares may be materially affected.
With respect to the Year 2000 problem, the Portfolio has been advised that
Alliance, the Portfolio's investment adviser, Alliance Fund Distributors, Inc.
("AFD"), the Portfolio's principal underwriter, and Alliance Fund Services,
Inc. ("AFS"), the Portfolio's registrar, transfer agent and dividend disbursing
agent (collectively, "Alliance"), began to address the Year 2000 issue several
years ago in connection with the replacement or upgrading of certain
5
computer systems and applications. During 1997, Alliance began a formal Year
2000 initiative, which established a structured and coordinated process to deal
with the Year 2000 issue. Alliance reports that it has completed its assessment
of the Year 2000 issue on its domestic and international computer systems and
applications. Currently, management of Alliance expects that the required
modifications for the majority of its significant systems and applications that
will be in use on January 1, 2000, will be completed and tested by early 1999.
Full integration testing of these systems and testing of interfaces with
third-party suppliers will continue through 1999. At this time, management of
Alliance believes that the costs associated with resolving this issue will not
have a material adverse effect on its operations or on its ability to provide
the level of services it currently provides to the Portfolios.
The Portfolio and Alliance have been advised by the Portfolio's Custodian and
Administrator that they are each in the process of reviewing their systems with
the same goals. As of the date of this prospectus, the Portfolio and Alliance
have no reason to believe that the Custodian or Administrator will be unable to
achieve these goals.
MANAGEMENT OF THE PORTFOLIO
The Portfolio's Adviser is Alliance Capital Management, L.P., 1345 Avenue of
the Americas, New York, NY 10105. Alliance is a leading international
investment adviser supervising client accounts with assets as of December 31,
1998 totaling more than $286 billion (of which approximately $118 billion
represented assets of investment companies). Alliance's clients are primarily
major corporate employee benefit plans, public employee retirement systems,
investment companies, foundations, and endowment funds. The 54 registered
investment companies, with more than 118 separate portfolios, managed by
Alliance currently have over 3.6 million shareholder accounts. As of December
31, 1998, Alliance was retained as investment manager for over 35 of the
FORTUNE 100 companies.
Under its Advisory Agreement with the Portfolio, Alliance provides investment
advisory services and order placement facilities for the Portfolio. For these
advisory services, the Portfolio paid Alliance, for the fiscal year ended
November 30, 1998, as a percentage of average daily net assets .33%. (Fees are
stated net of waivers and/or reimbursements. See the "Fee Table" at the
beginning of the prospectus for more information about fee waivers.)
ADMINISTRATOR
ADP Financial Information Services, Inc., a wholly-owned subsidiary of
Automatic Data Processing, Inc., serves as administrator of the Fund, on behalf
of the Portfolio. The Administrator performs or arranges for the performance of
certain services, mainly remote processing services through its propriety
shareholder accounting system. ADP is entitled to receive from the Portfolio a
fee computed daily and paid monthly at a maximum annual rate equal to .05% of
such Portfolio's average daily net assets. ADP may, from time to time,
voluntarily waive all or a portion of its fees payable to it under the
Administration Agreement. ADP shall not have any responsibility or authority
for any Portfolio's investments, the determination of investment policy, or for
any matter pertaining to the distribution of Portfolio shares.
PURCHASE AND SALE OF SHARES
HOW THE PORTFOLIO VALUES ITS SHARES
The Portfolio's net asset value or NAV is expected to be constant at $1.00 per
share, although this value is not guaranteed. The NAV is calculated at 12:00
Noon and 4:00 p.m., Eastern time, each day the New York Stock Exchange (NYSE)
is open for business. To calculate NAV, the Portfolio's assets are valued and
totaled, liabilities are subtracted, and the balance, called net assets, is
divided by the number of shares outstanding. The Portfolio values its
securities at its amortized cost. This method involves valuing an instrument at
its cost and thereafter applying a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the investment.
HOW TO BUY SHARES
- - INITIAL INVESTMENT
You may purchase the Portfolio's shares by instructing your Investment
Executive to use Alliance Money
6
Market Fund--General Municipal Portfolio in connection with your brokerage
account. There is a $500 minimum for an initial investment.
- - SUBSEQUENT INVESTMENTS
BY CHECK:
Mail or deliver your check or negotiable draft, payable to Wayne Hummer
Investments, LLC, who will deposit it into the Portfolio. Please indicate your
brokerage account number on the check or draft.
BY SWEEP:
Wayne Hummer Investments LLC has an automatic "sweep" available for
shareholders in the Portfolio. All cash balances in your brokerage account in
excess of $100 but less than $500 will be "swept" into the Portfolio on a
weekly basis. However, when the daily balance of your brokerage account exceeds
$500, all of the funds in your brokerage account will be "swept" daily into the
Portfolio.
HOW TO SELL SHARES
You may "redeem" your shares (i.e., sell your shares to the Portfolio) on any
day the NYSE is open through your Investment Executive. Your sales price will
be the next-determined NAV after the Portfolio receives your sales request in
proper form. Normally, redemption proceeds will be wired or mailed to you
either the same or the next business day, but generally no later than seven
days.
- - BY CONTACTING YOUR INVESTMENT EXECUTIVE
Instruct your Investment Executive to order a withdrawal from your Money Market
account and issue a check made payable to you.
- - BY SWEEP
Wayne Hummer Investments LLC offers an automatic sweep arrangement which will
automatically transfer from your Portfolio account sufficient amounts to cover
security purchases in your brokerage account.
- - BY CHECKWRITING
With this service, you may write checks made payable to any payee in any amount
of $500 or more. First, you must fill out the signature card which you can
obtain from your Investment Executive. The checkwriting service enables you to
receive the daily dividends declared on the shares to be redeemed until the day
that your check is presented for payment. You can not write checks for more
than the principal balance (not including any accrued dividends) in your
account.
OTHER
The Portfolio has two transaction times each business day, 12:00 Noon and 4:00
p.m., Eastern time. New investments represented by Federal funds or bank wire
monies received by The Bank of New York at any time during a day prior to 4:00
p.m. are entitled to the full dividend to be paid to shareholders for that day.
Shares do not earn dividends on the day you redeem shares regardless of whether
the redemption order is received before or after 12:00 Noon.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Portfolio's net income is paid daily to shareholders and automatically
invested in additional shares in your account. The Portfolio expects that its
distributions will primarily consist of net income or, if any, short-term
capital gains as opposed to long-term capital gains.
Distributions of tax-exempt interest income from this Portfolio are not subject
to Federal income tax (other than the AMT), but may be subject to state or
local income taxes. Any exempt-interest dividends derived from interest on
municipal securities subject to the AMT will be a specific preference item for
purposes of the Federal individual and corporate AMT. Distributions out of
taxable interest income, other investment income and short-term capital gains,
are taxable to you as ordinary income and distributions of long-term capital
gains, if any, are taxable as long-term taxable gains irrespective of the
length of time you may have held your shares.
Consult your tax adviser as to the tax consequences of an investment in the
Portfolios, including the possible applicability of the AMT to a portion of the
distributions.
Each year shortly after December 31, the Portfolio will send you tax
information stating the amount and type of all its distributions for the year.
The sale of Portfolio shares is a taxable transaction for Federal income tax
purposes.
7
DISTRIBUTION ARRANGEMENTS
The Portfolio has adopted a plan under SEC Rule 12b-1 that allows the Portfolio
to pay asset-based sales charges or distribution and service fees for the
distribution and sale of its shares. The Portfolio pays these fees in the
amount of 0.45% as a percent of aggregate average daily net assets. Because
these fees are paid out of the Portfolio's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
Portfolio's financial performance for the period of the Portfolio's operations.
Certain information reflects financial information for a single Portfolio
share. The total return in the table represents the rate that an investor would
have earned (or lost) on an investment in the Portfolio (assuming reinvestment
of all dividends and distributions). The information has been audited by
McGladrey & Pullen LLP, the Portfolio's independent auditors, whose report,
along with the Portfolio's financial statements, appears in the SAI, which is
available upon request.
DECEMBER 13,
1995(A)
YEAR ENDED NOVEMBER 30, TO
------------------------ NOVEMBER 30,
1998 1997 1996
----------- ----------- -----------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) .027 .029 .027
Net gains or losses on securities .000 .000 .000
Total from investment operations .027 .029 .027
LESS: DISTRIBUTIONS
Dividends (.027) (.029) (.027)
Distributions .000 .000 .000
Total distributions (.027) (.029) (.027)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN
Total investment return based on net
asset value (c) 2.76% 2.92% 2.79%(d)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $44 $137 $123
Ratio to average net assets of:
Expenses, net of waivers and
reimbursements 1.00% 1.00% 1.00%(e)
Expenses, before waivers and
reimbursements 1.17% 1.21% 1.39%(e)
Net investment income (b) 2.74% 2.87% 2.76%(e)
(a) Commencement of operations.
(b) Net of expenses reimbursed or waived by the Adviser.
(c) 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 period.
(d) The total return is not annualized.
(e) Annualized.
8
