This is filed pursuant to Rule 497(e).
File Nos. 2-48227 and 811-2383.





(LOGO)                                       ALLIANCEBERNSTEIN BOND FUND, INC.
                                   -ALLIANCEBERNSTEIN CORPORATE BOND PORTFOLIO
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c/o Alliance Global Investor Services, Inc.
P. O. Box 786003, San Antonio, Texas 78278-6003
Toll Free: (800) 221-5672
For Literature: Toll Free (800) 227-4681
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                       STATEMENT OF ADDITIONAL INFORMATION
                                February 1, 2005
                         (as amended September 6, 2005)
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          This Statement of Additional Information ("SAI") is not a prospectus
but supplements and should be read in conjunction with the current prospectus,
dated February 1, 2005, for the AllianceBernstein Corporate Bond Portfolio (the
"Portfolio") of AllianceBernstein Bond Fund, Inc. (the "Fund") that offers Class
A, Class B, Class C, Class R and Advisor Class shares of the Portfolio and the
prospectus dated March 1, 2005 of the Portfolio that offers the Class A, Class
R, Class K and Class I shares of the Portfolio (each a "Prospectus" and
together, the "Prospectuses"). Financial statements for the Portfolio for the
year ended September 30, 2004 are included in the Portfolio's annual report to
shareholders and are incorporated into this SAI by reference. Copies of the
Prospectuses and the Portfolio's annual report may be obtained by contacting
Alliance Global Investor Services, Inc. ("AGIS") at the address or the "For
Literature" telephone number shown above.

                                TABLE OF CONTENTS

                                                                            Page

Description of the Portfolio.................................................
Management of the Fund.......................................................
Purchase of Shares...........................................................
Redemption and Repurchase of Shares..........................................
Shareholder Services.........................................................
Net Asset Value..............................................................
Portfolio Transactions.......................................................
Dividends, Distributions and Taxes...........................................
General Information..........................................................
Financial Statements and Report of
  Independent Registered Public Accounting Firm..............................
Appendix A: Statement of Policies and Procedures
  For Voting Proxies.........................................................A-1
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(R): This mark is used under license from the owner, Alliance Capital
Management, L.P.





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                          DESCRIPTION OF THE PORTFOLIO
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Introduction to the Fund
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          The Fund is a diversified, open-end management investment company
commonly known as a "mutual fund" whose shares are offered in separate series
referred to as portfolios. The Fund is diversified and, under the Investment
Company Act of 1940, as amended (the "1940 Act"), the Fund may not change this
policy without a shareholder vote. Each portfolio is a separate pool of assets
constituting, in effect, a separate fund with its own investment objectives and
policies. A shareholder in the portfolio will be entitled to his or her pro-rata
share of all dividends and distributions arising from that portfolio's assets
and, upon redeeming shares of that portfolio, the shareholder will receive the
then current net asset value ("NAV") of that portfolio represented by the
redeemed shares. (See "Investing in the Funds" in your Prospectus.) The Fund is
empowered to establish, without shareholder approval, additional portfolios that
may have different investment objectives.

          The Fund currently has three portfolios: the AllianceBernstein
Corporate Bond Portfolio (the "Portfolio"), which is described in this SAI, the
AllianceBernstein U.S. Government Portfolio, and the AllianceBernstein Quality
Bond Portfolio, each of which is described in a separate statement of additional
information. Copies of the prospectuses and statements of additional information
for either the AllianceBernstein U.S. Government Portfolio or the
AllianceBernstein Quality Bond Portfolio can be obtained by contacting AGIS at
the address or the "For Literature" telephone number shown on the cover of this
SAI.

The Portfolio
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          Except as otherwise indicated, the Portfolio's investment policies are
not designated "fundamental policies" and, therefore, may be changed by the
Board of Directors without a shareholder vote. However, the Portfolio will not
change its investment policies without contemporaneous written notice to its
shareholders. The Portfolio's investment objectives may not be changed without
shareholder approval. There can be, of course, no assurance that the Portfolio
will achieve its investment objectives.

Investment Objective
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          General. The primary investment objective of the Portfolio is to
maximize income over the long term consistent with providing reasonable safety
in the value of each shareholder's investment. As a secondary objective, the
Portfolio will attempt to increase its capital through appreciation of its
investments in order to preserve and, if possible, increase the purchasing power
of each shareholder's investment.

How the Portfolio Pursues its Objectives
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          In pursuing these objectives, the Portfolio's policy is to invest in
readily marketable securities which give promise of relatively attractive
yields, but which do not involve substantial risk of loss of capital. The
Portfolio follows a policy of maintaining at least 65% of its net assets
invested in debt securities. Such objectives and policies cannot be changed
without the approval of the holders of a majority of the Portfolio's voting
securities. Under normal circumstances, however, the Portfolio invests at least
80% of its net assets in corporate bonds or other corporate debt securities.
This policy may not be changed without 60 days' prior written notice to
shareholders. For purposes of this policy, net assets include any borrowings for
investment purposes. Moreover, the Portfolio intends to manage its portfolio
actively by taking advantage of such trading opportunities as swaps to higher
yielding bonds of similar quality and swaps to different types of bonds which
are more attractive investments due to distortions in normal yield
differentials.

          There is no minimum rating requirement applicable to the Portfolio's
investments in fixed-income securities. Currently, the Portfolio believes its
objectives and policies may best be implemented by investing at least 65% of its
total assets in fixed-income securities considered investment grade or higher
(securities rated at least Baa by Moody's Investors Services, Inc. ("Moody's")
or BBB by Standard & Poor's Ratings Services ("S&P")). During the fiscal year
ended September 30, 2004, the Portfolio did not invest in securities rated below
B by Moody's, or if unrated by Moody's, considered by Alliance Capital
Management L.P. (the "Investment Adviser" or "Alliance") to be of equivalent
quality to such a rating. Securities rated Ba or below by Moody's or BB or below
by S&P are often referred to as junk bonds. (See "Special Risk Considerations"
below). The Portfolio expects that it will not retain a security that is
downgraded below B, or if unrated, determined by the Investment Adviser to have
undergone similar credit quality deterioration subsequent to purchase.

          The Portfolio will not invest more than 5% of its total assets in the
securities of any one issuer, excepting U.S. Government obligations. Further,
the Portfolio will not own more than 10% of the outstanding voting securities of
any issuer. The Portfolio has complete flexibility as to the types of securities
in which it will invest and the relative proportions thereof, and the Portfolio
plans to vary the proportions of its holdings of long- and short-term
fixed-income securities (including debt securities, convertible debt securities,
U.S. Government (full faith and credit) obligations) and of common and preferred
stocks in order to reflect its assessment of prospective cyclical changes even
if such action may adversely affect current income. However, substantially all
of the Portfolio's investments will be income producing.

          The Portfolio may invest up to 50% of its total assets in foreign
fixed-income securities which will consist primarily of corporate fixed-income
securities and instruments issued or guaranteed by foreign governments
("Sovereign Debt Obligations"). Sovereign Debt Obligations may include, as
described below, securities issued in connection with foreign government debt
restructurings as well as foreign government loan participations and
assignments. Not more than 15% of the Portfolio's total assets may be invested
in Sovereign Debt Obligations in the form of foreign government loan
participations and assignments, substantially all of which may be high-yield,
high-risk debt securities that are low-rated (i.e. below investment grade) or of
comparable quality and unrated, and that are considered to be predominantly
speculative as regards the issuer's capacity to pay interest and repay
principal. Investors should be aware that there are risks associated with
investment by the Portfolio in foreign securities. See "Special Risk
Considerations."

          Brady Bonds. The Portfolio may invest in certain debt obligations
customarily referred to as "Brady Bonds." Brady Bonds are created through the
exchange of existing commercial bank loans to foreign entities for new
obligations in connection with debt restructurings under a plan introduced by
former U.S. Secretary of the Treasury, Nicholas F. Brady (the "Brady Plan"). The
market for Brady Bonds has decreased recently because many Brady Bonds have been
retired.

          Brady Bonds may be collateralized or uncollateralized and issued in
various currencies (although most are U.S. dollar-denominated) and they are
actively traded in the over-the-counter secondary market. Certain Brady Bonds
are collateralized in full as to principal due at maturity by zero coupon
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities that have the same maturity as Brady Bonds ("Collateralized
Brady Bonds").

          Dollar-denominated, Collateralized Brady Bonds may be fixed rate bonds
or floating rate bonds. Interest payments on these Brady Bonds generally are
collateralized by cash or securities in an amount that, in the case of fixed
rate bonds, is equal to at least one year of rolling interest payments or, in
the case of floating rate bonds, initially is equal to at least one year's
rolling interest payments based on the applicable interest rate at that time and
is adjusted at regular intervals thereafter. Brady Bonds are often viewed as
having up to four valuation components: (i) collateralized repayment of
principal at final maturity; (ii) collateralized interest payments; (iii)
uncollateralized interest payments; and (iv) any uncollateralized repayment of
principal at maturity (these uncollateralized amounts constitute the "residual
risk"). In the event of a default with respect to Collateralized Brady Bonds as
a result of which the payment obligations of the issuer are accelerated, the
U.S. Treasury zero coupon obligations held as collateral for the payment of
principal will not be distributed to investors, nor will such obligations be
sold and the proceeds distributed. The collateral will be held by the collateral
agent to the scheduled maturity of the defaulted Brady Bonds, which will
continue to be outstanding, at which time the face amount of the collateral will
equal the principal payments which would have been due on the Brady Bonds in the
normal course. In addition, in light of the residual risk of Brady Bonds and,
among other factors, the history of defaults with respect to commercial bank
loans by public and private entities of countries issuing Brady Bonds,
investments in Brady Bonds are to be viewed as speculative. There can be no
assurance that Brady Bonds in which the Portfolio may invest will not be subject
to restructuring arrangements or requests for new credit, which may cause the
Portfolio to suffer a loss of interest or principal on any of its holdings.

          Structured Securities. The Portfolio may invest in interests in
entities organized and operated solely for the purpose of restructuring the
investment characteristics of Sovereign Debt Obligations and loan participations
and assignments. This type of restructuring involves the deposit with or
purchase by an entity, such as a corporation or trust, of specified instruments
(such as commercial bank loans or Brady Bonds) and the issuance by that entity
of one or more classes of securities ("Structured Securities") backed by, or
representing interests in, the underlying instruments. The cash flow on the
underlying instruments may be apportioned among the newly issued Structured
Securities to create securities with different investment characteristics such
as varying maturities, payment priorities and interest rate provisions, and the
extent of the payments made with respect to Structured Securities is dependent
on the extent of the cash flow on the underlying instruments. Because Structured
Securities of the type in which the Portfolio anticipates it will invest
typically involve no credit enhancement, their credit risk generally will be
equivalent to that of the underlying instruments.

          The Portfolio is permitted to invest in a class of Structured
Securities that is either subordinated or unsubordinated to the right of payment
of another class. Subordinated Structured Securities typically have higher
yields and present greater risks than unsubordinated Structured Securities.

          Certain issuers of Structured Securities may be deemed to be
"investment companies" as defined in the 1940 Act. As a result, the Portfolio's
investment in these Structured Securities may be limited by the restrictions
contained in the 1940 Act.

          Loan Participations and Assignments. The Portfolio may invest in fixed
and floating rate loans ("Loans") arranged through private negotiations between
an issuer of Sovereign Debt Obligations and one or more financial institutions
("Lenders"). The Portfolio's investments in Loans are expected in most instances
to be in the form of participations in Loans ("Participations") and assignments
of all or a portion of Loans ("Assignments") from third parties. The Portfolio
may invest up to 15% of its total assets in Participations and Assignments. The
government that is the borrower on the Loan will be considered by the Portfolio
to be the issuer of a Participation or Assignment for purposes of the
Portfolio's fundamental investment policy that it will not invest 25% or more of
its total assets in securities of issuers conducting their principal business
activities in the same industry (i.e., foreign government). The Portfolio's
investment in Participations typically will result in the Portfolio having a
contractual relationship only with the Lender and not with the borrower. The
Portfolio will have the right to receive payments of principal, interest and any
fees to which it is entitled only from the Lender selling the Participation and
only upon receipt by the Lender of the payments from the borrower. The Portfolio
will acquire Participations only if the Lender interpositioned between the
Portfolio and the borrower is a Lender having total assets of more than $25
billion and whose senior unsecured debt is rated investment grade or higher
(i.e., Baa or higher by Moody's or BBB or higher by S&P).

          In connection with purchasing Participations, the Portfolio generally
will have no right to enforce compliance by the borrower with the terms of the
loan agreement relating to the Loan, nor any rights of set-off against the
borrower, and the Portfolio may not directly benefit from any collateral
supporting the Loan in which it has purchased the Participation. As a result,
the Portfolio may be subject to the credit risk of both the borrower and the
Lender that is selling the Participation. In the event of the insolvency of the
Lender selling a Participation, the Portfolio may be treated as a general
creditor of the Lender and may not benefit from any set-off between the Lender
and the borrower. Certain Participations may be structured in a manner designed
to avoid purchasers of Participations being subject to the credit risk of the
Lender with respect to the Participation, but even under such a structure, in
the event of the Lender's insolvency, the Lender's servicing of the
Participation may be delayed and the assignability of the Participation
impaired.

          When the Portfolio purchases Assignments from Lenders it will acquire
direct rights against the borrower on the Loan. Because Assignments are arranged
through private negotiations between potential assignees and potential
assignors, however, the rights and obligations acquired by the Portfolio as the
purchaser of an Assignment may differ from, and be more limited than, those held
by the assigning Lender.

          The Portfolio may have difficulty disposing of Assignments and
Participations because to do so it will have to assign such securities to a
third party. Because there is no liquid market for such securities, the
Portfolio anticipates that such securities could be sold only to a limited
number of institutional investors. The lack of a liquid secondary market may
have an adverse impact on the value of such securities and the Portfolio's
ability to dispose of particular Assignments or Participations when necessary to
meet the Portfolio's liquidity needs or in response to a specific economic event
such as a deterioration in the creditworthiness of the borrower. The lack of a
liquid secondary market for Assignments and Participations also may make it more
difficult for the Portfolio to assign a value to these securities for purposes
of valuing the Portfolio and calculating its NAV. Further, the assignability of
certain Sovereign Debt Obligations is restricted by the governing documentation
as to the nature of the assignee such that the only way in which the Portfolio
may acquire an interest in a Loan is through a Participation and not an
Assignment.

          Options. The Portfolio may purchase put and call options written by
others and write covered put and call options overlying the types of securities
in which the Portfolio may invest. A put option (sometimes called a "standby
commitment") gives the purchaser of the 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 (sometimes called
a "reverse standby commitment") 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. The Portfolio
will not purchase any option if, immediately thereafter, the aggregate cost of
all outstanding options purchased by the Portfolio would exceed 2% of the value
of its total assets; the Portfolio will not write any option if, immediately
thereafter, the aggregate value of the Portfolio's securities subject to
outstanding options would exceed 15% of its total assets.

          The Portfolio may purchase put and call options to provide protection
against adverse price or yield effects from anticipated changes in prevailing
interest rates. For instance in periods of rising interest rates and falling
bond prices, the Portfolio might purchase a put option to limit its exposure to
falling prices. In periods of falling interest rates and rising bond prices, the
Portfolio might purchase a call option. In purchasing a call option, the
Portfolio would be in a position to realize a gain if, during the option period,
the price of the security increased by an amount in excess of the premium paid.
It would realize a loss if the price of the security declined or remained the
same or did not increase during the period by more than the amount of the
premium. By purchasing a put option, the Portfolio would be in a position to
realize a gain if, during the option period, the price of the security declined
by an amount in excess of the premium paid. It would realize a loss if the price
of the 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 Portfolio were permitted to expire without being sold or exercised, its
premium would represent a loss to the Portfolio.

          When the Portfolio writes a put option it must either own at all times
during the option period an offsetting put option on the same security or
maintain in a segregated account cash or liquid assets in an amount adequate to
purchase the underlying security should the put be exercised. When the Portfolio
writes a call option it must own at all times during the option period either
the underlying securities or an offsetting call option on the same securities.
If a put option written by the Portfolio were exercised the Portfolio would be
obligated to purchase the underlying security at the exercise price. If a call
option written by the Portfolio were exercised the Portfolio would be obligated
to sell the underlying security at the exercise price.

          The risk involved in writing a put option is that there could be a
decrease in the market value of the underlying security caused by rising
interest rates or other factors. If this occurred, the option could be exercised
and the underlying security would then be sold to the Portfolio at a higher
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 Portfolio at a lower price than its current market value. These risks could
be reduced by entering into a closing transaction as described below. The
Portfolio retains the premium received from writing a put or call option whether
or not the option is exercised.

          The Portfolio may also write call options for cross-hedging purposes.
A call option is for cross-hedging purposes if it is designed to provide a hedge
against a decline in value in another security which the Portfolio owns or has
the right to acquire. In such circumstances, the Portfolio collateralizes the
option by maintaining, in a segregated account with the custodian, liquid assets
in an amount not less than the market value of the underlying security, marked
to market daily.

          The Portfolio may dispose of an option that it has purchased by
entering into a "closing sale transaction" with the writer of the option. A
closing sale transaction terminates the obligation of the writer of the option
and does not result in the ownership of an option. The Portfolio realizes a
profit or loss from a closing sale transaction if the premium received from the
transaction is more than or less than the cost of the option.

          The Portfolio may terminate its obligation to the holder of an option
written by the Portfolio through a "closing purchase transaction." The Portfolio
may not, however, effect a closing purchase transaction with respect to such an
option after it has been notified of the exercise of such option. The Portfolio
realizes a profit or loss from a closing purchase transaction if the cost of the
transaction is more than or less than the premium received by the Portfolio from
writing the option.

          The Portfolio generally purchases or writes options in negotiated
transactions. The Portfolio effects such transactions only with investment
dealers and other financial institutions (such as commercial banks or savings
and loan institutions) deemed creditworthy by the Investment Adviser. The
Investment Adviser has also adopted procedures for monitoring the
creditworthiness of such entities. Options purchased or written by the Portfolio
in negotiated transactions are illiquid and it may not be possible for the
Portfolio to effect a closing purchase transaction at a time when the Investment
Adviser believes it would be advantageous to do so.

          Credit Default Swap Agreements. The "buyer" in a credit default swap
contract is obligated to pay the "seller" a periodic stream of payments over the
term of the contract in return for a contingent payment upon the occurrence of a
credit event with respect to an underlying reference obligation. Generally, a
credit event means bankruptcy, failure to pay, obligation acceleration or
modified restructuring. The Portfolio may be either the buyer or seller in the
transaction. As a seller, the Portfolio receives a fixed rate of income
throughout the term of the contract, which typically is between one month and
five years, provided that no credit event occurs. If a credit event occurs, the
Portfolio typically must pay the contingent payment to the buyer, which is
typically the "par value" (full notional value) of the reference obligation. The
contingent payment may be a cash settlement or by physical delivery of the
reference obligation in return for payment of the face amount of the obligation.
If the Portfolio is a buyer and no credit event occurs, the Portfolio may lose
its investment and recover nothing. However, if a credit event occurs, the buyer
typically receives full notional value for a reference obligation that may have
little or no value.

          Credit default swaps may involve greater risks than if the Portfolio
had invested in the reference obligation directly. Credit default swaps are
subject to general market risk, liquidity risk and credit risk. As noted above,
if a Portfolio is a buyer and no credit event occurs, it will lose its
investment. In addition, the value of the reference obligation received by the
Portfolio as the seller if a credit event occurs, coupled with the periodic
payments previously received, may be less than the full notional value it pays
to the buyer, resulting in a loss of value to the Fund.

          The Portfolio will not enter into a credit default swap if the swap
provides for settlement by physical delivery and such delivery would result in
the Portfolio investing (i) less than 80% of its net assets in corporate bonds
and other corporate debt securities or (ii) less than 65% of its total assets in
securities rated investment grade or higher.

          Interest Rate Transactions. In order to attempt to protect the value
of the Portfolio's investments from interest rate fluctuations, the Portfolio
may enter into various hedging transactions, such as interest rate swaps and the
purchase or sale of interest rate caps and floors. The Portfolio expects to
enter into these transactions primarily to preserve a return or spread on a
particular investment or portion of its portfolio. The Portfolio may also enter
into these transactions to protect against any increase in the price of
securities the Portfolio anticipates purchasing at a later date. The Portfolio
intends to use these transactions as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Portfolio with
another party of their respective commitments to pay or receive interest, e.g.,
an exchange of floating rate payments for fixed rate payments. The purchase of
an interest rate cap entitles the purchaser, to the extent that a specified
index exceeds a predetermined interest rate, to receive payments on a notional
principal amount from the party selling such interest rate cap. The purchase of
an interest rate floor entitles the purchaser, to the extent that a specified
index falls below a predetermined interest rate, to receive payments of interest
on a notional principal amount from the party selling such interest rate floor.

          The Portfolio may enter into interest rate swaps, caps and floors on
either an asset-based or liability-based basis depending on whether it is
hedging its assets or its liabilities, and will only be entered into on a net
basis, i.e., the two payment streams are netted out, with the Portfolio
receiving or paying, as the case may be, only the net amount of the two
payments. The net amount of the excess, if any, of the Portfolio's obligations
over its entitlements with respect to each interest rate swap will be accrued on
a daily basis and an amount of liquid assets having an aggregate NAV at least
equal to the accrued excess will be maintained in a segregated account by the
custodian. The Portfolio will enter into interest rate swap, cap or floor
transactions only with counterparties who have credit ratings of at least A (or
the equivalent) from any one nationally recognized statistical rating
organization or counterparties with guarantors with debt securities having such
a rating. If there is a default by the other party to such a transaction, the
Portfolio will have contractual remedies pursuant to the agreements related to
the transaction. The swap market has grown substantially in recent years, with a
large number of banks and investment banking firms acting both as principals and
agents utilizing standardized swap documentation. As a result, the swap market
has become well established and provides a degree of liquidity. Caps and floors
are more recent innovations for which documentation is not as standardized and,
accordingly, they are less liquid than swaps.

          U.S. Government Securities. U.S. Government securities may be backed
by the full faith and credit of the United States, supported only by the right
of the issuer to borrow from the U.S. Treasury or backed only by the credit of
the issuing agency itself. These securities include: (i) the following U.S.
Treasury securities, which are backed by the full faith and credit of the United
States and differ only in their interest rates, maturities and times of
issuance: U.S. Treasury bills (maturities of one year or less with no interest
paid and hence issued at a discount and repaid at full face value upon
maturity), U.S. Treasury notes (maturities of one to ten years with interest
payable every six months) and U.S. Treasury bonds (generally maturities of
greater than ten years with interest payable every six months); (ii) obligations
issued or guaranteed by U.S. Government agencies and instrumentalities that are
supported by the full faith and credit of the U.S. Government, such as
securities issued by the Government National Mortgage Association ("GNMA"), the
Farmers Home Administration, the Department of Housing and Urban Development,
the Export-Import Bank, the General Services Administration and the Small
Business Administration; and (iii) obligations issued or guaranteed by U.S.
government agencies and instrumentalities that are not supported by the full
faith and credit of the U.S. Government, such as securities issued by the
Federal National Mortgage Association ("FNMA") and the Federal Home Loan
Mortgage Corporation ("FHLMC"), and governmental collateralized mortgage
obligations ("CMOs"). The maturities of the U.S. Government securities listed in
paragraphs (i) and (ii) above usually range from three months to 30 years. Such
securities, except GNMA certificates, normally provide for periodic payments of
interest in fixed amount with principal payments at maturity or specified call
dates.

          U.S. Government securities also include zero coupon securities and
principal-only securities and certain stripped mortgage-related securities
("SMRS"). In addition, other U.S. Government agencies and instrumentalities have
issued stripped securities that are similar to SMRS. Such securities include
those that are issued with an interest-only ("IO") class and a principal-only
("PO") class. Although these stripped securities are purchased and sold by
institutional investors through several investment banking firms acting as
brokers or dealers, these securities were only recently developed. As a result,
established trading markets have not yet developed and, accordingly, these
securities may be illiquid.

          Guarantees of securities by the U.S. Government or its agencies or
instrumentalities guarantee only the payment of principal and interest on the
securities, and do not guarantee the securities' yield or value or the yield or
value of the shares of the Fund that holds the securities.

          U.S. Government securities are considered among the safest of
fixed-income investments. As a result, however, their yields are generally lower
than the yields available from other fixed-income securities.

          Zero Coupon Securities. To the extent consistent with its investment
objectives, the Portfolio may invest without limit in "zero coupon" securities,
which are debt securities that have been stripped of their unmatured interest
coupons and receipts or certificates representing interests in such stripped
debt obligations and coupons. A zero coupon security pays no interest to its
holder during its life. Its value to an investor consists of the difference
between its face value at the time of maturity and the price for which it was
acquired, which is generally an amount significantly less than its face value
(sometimes referred to as a "deep discount" price). Accordingly, such securities
usually trade at a deep discount from their face or par value and will be
subject to greater fluctuations of market value in response to changing interest
rates than debt obligations of comparable maturities that make current
distributions of interest. On the other hand, because there are no periodic
interest payments to be reinvested prior to maturity, zero coupon securities
eliminate reinvestment risk and lock in a rate of return to maturity. The
Portfolio may also invest in "pay-in-kind" debentures (i.e., debt obligations,
the interest on which may be paid in the form of additional obligations of the
same type rather than cash) which have characteristics similar to zero coupon
securities.

          Current federal tax law requires that a holder (such as the Portfolio)
of a zero coupon security accrue a portion of the discount at which the security
was purchased as income each year even though the holder receives no interest
payment in cash on the security during the year. As a result, in order to make
the distributions necessary for the Portfolio not to be subject to federal
income or excise taxes, the Portfolio might be required to pay out as an income
distribution each year an amount, obtained by liquidation of portfolio
securities or borrowings if necessary, greater than the total amount of cash
that the Portfolio has actually received as interest during the year. The
Portfolio believes, however, that it is highly unlikely that it would be
necessary to liquidate portfolio securities or borrow money in order to make
such required distributions or to meet its investment objective.

          Collateralized Mortgage Obligations and Multi-Class Pass-Through
Securities. Mortgage-related securities in which the Portfolio may invest may
also include CMOs and multi-class pass-through securities. CMOs are debt
obligations issued by special purpose entities that are secured by
mortgage-backed certificates, including, in many cases, certificates issued by
governmental and government-related guarantors, including GNMA, FNMA and FHLMC,
together with certain funds and other collateral. Multi-class pass-through
securities are equity interests in a trust composed of mortgage loans or other
mortgage-related securities. Payments of principal and interest on underlying
collateral provide the funds to pay debt service on the CMO or make scheduled
distributions on the multi-class pass-through security. CMOs and multi-class
pass-through securities (collectively CMOs unless the context indicates
otherwise) may be issued by agencies or instrumentalities of the United States
Government or by private organizations. The issuer of a CMO may elect to be
treated as a Real Estate Mortgage Investment Conduit ("REMIC").

          In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a "tranche," is issued at a
specific coupon rate and has a stated maturity or final distribution date.
Principal prepayments on collateral underlying a CMO may cause it to be retired
substantially earlier than the stated maturities or final distribution dates.
Interest is paid or accrues on all classes of a CMO on a monthly, quarterly or
semi-annual basis. The principal and interest on the underlying mortgages may be
allocated among the several classes of a series of a CMO in many ways.

          The staff of the Securities and Exchange Commission (the "Commission")
has determined that certain issuers of CMOs are investment companies for
purposes of the 1940 Act. In reliance on a 1991 staff interpretation, the
Portfolio's investments in certain qualifying CMOs, including REMICs, are not
subject to the 1940 Act's limitation on acquiring interests in other investment
companies. In order to be able to rely on the staff's interpretation, the CMOs
must be unmanaged, fixed-asset issuers that (i) invest primarily in
mortgage-backed securities, (ii) do not issue redeemable securities, (iii)
operate under general exemptive orders exempting them from all provisions of the
1940 Act, and (iv) are not registered or regulated under the 1940 Act as
investment companies. To the extent that the Portfolio selects CMOs that do not
meet the above requirements, the Portfolio may not invest more than 10% of its
assets in all such entities and may not acquire more than 3% of the voting
securities of any single such entity.

          Lending of Portfolio Securities. Consistent with applicable regulatory
requirements, the Portfolio may loan its portfolio securities where such loans
are continuously secured by cash collateral equal to no less than the market
value, determined daily, of the securities loaned. In loaning its portfolio
securities, the Portfolio will require that interest or dividends on securities
loaned be paid to the Portfolio. Where voting or consent rights with respect to
loaned securities pass to the borrower, the Portfolio will follow the policy of
calling the loan, in whole or in part as may be appropriate, to permit it to
exercise such voting or consent rights if the exercise of such rights involves
issues having a material effect on the Portfolio's investment in the securities
loaned. Although the Portfolio cannot at the present time determine the types of
borrowers to whom it may lend its portfolio securities, the Portfolio
anticipates that such loans will be made primarily to bond dealers.

          Illiquid Securities. The Portfolio will not invest in securities for
which there is no public market (i.e. illiquid securities). For this purpose,
illiquid securities include, among others, securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restriction on resale.

          Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended ("Securities Act"),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

          A large institutional market has developed for certain securities that
are not registered under the Securities Act including repurchase agreements,
commercial paper, foreign securities, municipal securities and corporate bonds
and notes. Institutional investors depend on an efficient institutional market
in which the unregistered security can be readily resold or on an issuer's
ability to honor a demand for repayment. The fact that there are contractual or
legal restrictions on resale to the general public or to certain institutions
may not be indicative of the liquidity of such investments.

          Rule 144A under the Securities Act allows a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted securities held
by the Portfolio, however, could affect adversely the marketability of such
portfolio securities and the Portfolio might be unable to dispose of such
securities promptly or at reasonable prices.

          The Investment Adviser, acting under the supervision of the Board of
Directors, will monitor the liquidity of restricted securities in the Portfolio
that are eligible for resale pursuant to Rule 144A. In reaching liquidity
decisions, the Investment Adviser will consider, among others, the following
factors: (1) the frequency of trades and quotes for the security; (2) the number
of dealers issuing quotations to purchase or sell the security; (3) the number
of other potential purchasers of the security; (4) the number of dealers
undertaking to make a market in the security; (5) the nature of the security
(including its unregistered nature) and the nature of the marketplace for the
security (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer); and (6) any applicable
Commission interpretation or position with respect to such type of securities.

          Reverse Repurchase Agreements and Dollar Rolls. Reverse repurchase
agreements involve sales by the Portfolio of portfolio assets concurrently with
an agreement by the Portfolio to repurchase the same assets at a later date at a
fixed price. During the reverse repurchase agreement period, the Portfolio
continues to receive principal and interest payments on these securities.
Generally, the effect of such a transaction is that the Portfolio can recover
all or most of the cash invested in the portfolio securities involved during the
term of the reverse repurchase agreement, while it will be able to keep the
interest income associated with those portfolio securities. Such transactions
are advantageous only if the interest cost to the Fund of the reverse repurchase
transaction is less than the cost of otherwise obtaining the cash.

          Reverse repurchase agreements are considered to be a loan to the
Portfolio by the counterparty, collaterized by the assets subject to repurchase
because the incidents of ownership are retained by the Portfolio. By entering
into reverse repurchase agreements, the Portfolio obtains additional cash to
invest on other securities. Reverse repurchase agreements create leverage and
are speculative transactions because they allow the Portfolio to achieve a
return on a larger capital base relative to its NAV. The use of leverage creates
the opportunity for increased income for the Portfolio's shareholders when the
Portfolio achieves a higher rate of return on the investment of the reverse
repurchase agreement proceeds than it pays in interest on the reverse repurchase
transactions. However, there is the risk that returns could be reduced if the
rates of interest on the investment proceeds do not exceed the interest paid by
the Portfolio on the reverse repurchase transactions. Borrowings through reverse
repurchase agreements are subject to a requirement to maintain asset coverage by
segregating assets in a segregated account equal in value to proceeds received
in the reverse repurchase agreement.

          Dollar rolls involve sales by the Portfolio of securities for delivery
in the current month and the Portfolio's simultaneously contracting to
repurchase substantially similar (same type and coupon) securities on a
specified future date. During the roll period, the Portfolio forgoes principal
and interest paid on the securities. The Portfolio is compensated by the
difference between the current sales price and the lower forward price for the
future purchase (often referred to as the "drop") as well as by the interest
earned on the cash proceeds of the initial sale.

          Reverse repurchase agreements and dollar rolls involve the risk that
the market value of the securities the Portfolio is obligated to repurchase
under the agreement may decline below the repurchase price. In the event the
buyer of securities under a reverse repurchase agreement or dollar roll files
for bankruptcy or becomes insolvent, the Portfolio's use of the proceeds of the
agreement may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Fund's obligation to repurchase the
securities. Under normal circumstances, the Investment Adviser does not expect
to engage in reverse repurchase agreements and dollar rolls with respect to
greater than 50% of the Portfolio's total assets.

          Special Risk Considerations. Securities rated Baa are considered by
Moody's 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. Securities rated below investment grade,
i.e., Ba or BB and lower, ("lower-rated securities") 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.

          The market for lower-rated securities may be thinner and less active
than that for higher-quality securities, which can adversely affect the prices
at which these securities can be sold. To the extent that there is no
established secondary market for lower-rated securities, the Portfolio may
experience difficulty in valuing such securities and, in turn, the Portfolio's
assets. In addition, 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 ratings of fixed-income securities by Moody's, S&P and Fitch
Ratings ("Fitch") 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.

          The Investment Adviser will try to reduce the risk inherent in the
Portfolio's investment approach through credit analysis, diversification and
attention to current developments and trends in interest rates and economic
conditions. However, there can be no assurance that losses will not occur. Since
the risk of default is higher for lower-quality securities, the Investment
Adviser's research and credit analysis are a correspondingly important aspect of
its program for managing the Portfolio's securities. In considering investments
for the Portfolio, the Investment Adviser will attempt to identify those
high-yielding securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. The
Investment 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
Portfolio when the Investment 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 Portfolio to a degree comparable
to that of rated securities which are consistent with the Portfolio's objectives
and policies.

          In seeking to achieve the Portfolio's primary objective, there will be
times, such as during periods of rising interest rates, when depreciation and
realization of capital losses on securities in the portfolio will be
unavoidable. Moreover, medium- and lower-rated securities and non-rated
securities of comparable quality may be subject to wider fluctuations in yield
and market values than higher rated securities under certain market conditions.
Such fluctuations after a security is acquired do not affect the cash income
received from that security but are reflected in the NAV of the Portfolio.

          Extent of Trading. No established secondary markets may exist for many
of the Sovereign Debt Obligations in which the Portfolio will invest. Reduced
secondary market liquidity may have an adverse effect on the market price and
the Portfolio's ability to dispose of particular instruments when necessary to
meet its liquidity requirements or in response to specific economic events such
as a deterioration in the creditworthiness of the issuer. Reduced secondary
market liquidity for certain Sovereign Debt Obligations may also make it more
difficult for the Portfolio to obtain accurate market quotations for purposes of
valuing its portfolio. Market quotations are generally available on many
Sovereign Debt Obligations only from a limited number of dealers and may not
necessarily represent firm bids of those dealers or prices for actual sales.

          Economic and Political Factors. By investing in Sovereign Debt
Obligations, the Portfolio will be exposed to the direct or indirect
consequences of political, social and economic change in various countries.
Political changes in a country may affect the willingness of a foreign
government to make or provide for timely payments of its obligations. The
country's economic status, as reflected, among other things, in its inflation
rate, the amount of its external debt and its gross domestic product, will also
affect the government's ability to honor its obligations.

          Many countries providing investment opportunities for the Portfolio
have experienced substantial, and in some periods extremely high, rates of
inflation for many years. Inflation and rapid fluctuations in inflation rates
have had and may continue to have adverse effects on the economies and
securities of certain of these countries. In an attempt to control inflation,
wage and price controls have been imposed in certain countries.

          Investing in Sovereign Debt Obligations involves economic and
political risks. The Sovereign Debt Obligations in which the Portfolio will
invest in most cases pertain to countries that are among the world's largest
debtors to commercial banks, foreign governments, international financial
organizations and other financial institutions. In recent years, the governments
of some of these countries have encountered difficulties in servicing their
external debt obligations, which led to defaults on certain obligations and
restructuring of certain indebtedness. Restructuring arrangements have included,
among other things, reducing and rescheduling interest and principal payments by
negotiating new or amended credit agreements or converting outstanding principal
and unpaid interest to Brady Bonds, and obtaining new credit to finance interest
payments. Certain governments have not been able to make payments of interest on
or principal of Sovereign Debt Obligations as those payments have come due.
Obligations arising from past restructuring agreements may affect the economic
performance and political and social stability of those issuers.

          Central banks and other governmental authorities which control the
servicing of Sovereign Debt Obligations may not be willing or able to permit the
payment of the principal or interest when due in accordance with the terms of
the obligations. As a result, the issuers of Sovereign Debt Obligations may
default on their obligations. Defaults on certain Sovereign Debt Obligations
have occurred in the past. Holders of certain Sovereign Debt Obligations may be
requested in the restructuring and rescheduling of these obligations to extend
further loans to the issuers. The interests of holders of Sovereign Debt
Obligations could be adversely affected in the course of restructuring
arrangements or by certain other factors referred to below. Furthermore, some of
the participants in the secondary market for Sovereign Debt Obligations may also
be directly involved in negotiating the terms of these arrangements and may
therefore have access to information not available to other market participants.

          The ability of governments to make timely payments on their
obligations is likely to be influenced strongly by the issuer's balance of
payments, including export performance, and its access to international credits
and investments. A country whose exports are concentrated in a few commodities
could be vulnerable to a decline in the international prices of one or more of
those commodities. Increased protectionism on the part of a country's trading
partners could also adversely affect the country's exports and diminish its
trade account surplus, if any. To the extent that a country receives payments
for its exports in currencies other than dollars, its ability to make debt
payments denominated in dollars could be adversely affected.

          To the extent that a country develops a trade deficit, it will need to
depend on continuing loans from foreign governments, multilateral organizations
or private commercial banks, aid payments from foreign governments and on
inflows of foreign investment. The access of a country to those forms of
external funding may not be certain, and a withdrawal of external funding could
adversely affect the capacity of a government to make payments on its
obligations. In addition, the cost of servicing debt obligations can be affected
by a change in international interest rates since the majority of these
obligations carry interest rates that are adjusted periodically based upon
international rates.

          Another factor bearing on the ability of a country to repay Sovereign
Debt Obligations is the level of the country's international reserves.
Fluctuations in the level of these reserves can affect the amount of foreign
exchange readily available for external debt payments and, thus, could have a
bearing on the capacity of the country to make payments on its Sovereign Debt
Obligations.

          Expropriation, confiscatory taxation, nationalization, political or
social instability or other similar developments, such as military coups, have
occurred in the past in countries in which the Portfolio may invest and could
adversely affect the Portfolio's assets should these conditions or events recur.

          Investment Controls and Repatriation. Foreign investment in certain
Sovereign Debt Obligations is restricted or controlled to varying degrees. These
restrictions or controls may at times limit or preclude foreign investment in
certain Sovereign Debt Obligations and increase the costs and expenses of the
Portfolio. Certain countries in which the Portfolio may invest require
governmental approval prior to investments by foreign persons, limit the amount
of investment by foreign persons in a particular issuer, limit the investment by
foreign persons only to a specific class of securities of an issuer that may
have less advantageous rights than the classes available for purchase by
domiciliaries of the countries and/or impose additional taxes on foreign
investors.

          Certain countries may require governmental approval for the
repatriation of investment income, capital or the proceeds of the sales of
securities by foreign investors. In addition, if a deterioration occurs in a
country's balance of payments, the country could impose temporary restrictions
on foreign capital remittances. The Portfolio could be adversely affected by
delays in, or a refusal to grant, any required governmental approval for
repatriation of capital, as well as by the application to the Portfolio of any
restrictions on investments. Investing in local markets may require the
Portfolio to adopt special procedures, seek local government approvals or take
other actions, each of which may involve additional costs to the Portfolio.

          Other Characteristics of Investment in Foreign Issues. Foreign
securities investments are affected by changes in currency rates or exchange
control regulations as well as by changes in governmental administration,
economic or monetary policy (in the United States or abroad) and changed
circumstances in dealings between nations. Currency exchange rate movements will
increase or reduce the U.S. dollar value of the Portfolio's net assets and
income attributable to foreign securities. Costs are incurred in connection with
conversion of currencies held by the Portfolio.

          There may be less publicly available information about foreign issuers
than about domestic issuers, and foreign issuers may not be subject to
accounting, auditing and financial reporting standards and requirements
comparable to those of domestic issuers. Securities of some foreign issuers are
less liquid and more volatile than securities of comparable domestic issuers,
and foreign brokerage commissions are generally higher than in the United
States. Foreign securities markets may be less liquid, more volatile and less
subject to governmental supervision than in the United States. Investments in
foreign countries could be affected by other factors not present in the United
States, including expropriation, confiscatory taxation and potential
difficulties in enforcing contractual obligations.

          Foreign issuers are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. issuers. In particular, the assets and profits appearing on
the financial statements of a foreign issuer may not reflect its financial
position or results of operations in the way they would be reflected had the
financial statements been prepared in accordance with U.S. generally accepted
accounting principles. In addition, for an issuer that keeps accounting records
in local currency, inflation accounting rules in some of the countries in which
the Portfolio may invest require, for both tax and accounting purposes, that
certain assets and liabilities be restated on the issuer's balance sheet in
order to express items in terms of currency of constant purchasing power.
Inflation accounting may indirectly generate losses or profits. Consequently,
financial data may be materially affected by restatements for inflation and may
not accurately reflect the real condition of those issuers and securities
markets. Substantially less information is publicly available about certain
non-U.S. issuers than is available about U.S. issuers.

1940 Act Restrictions
- ---------------------

          Under the 1940 Act, the Portfolio is not permitted to borrow unless
immediately after such borrowing there is "asset coverage," as that term is
defined and used in the 1940 Act, of at least 300% for all borrowings of the
Portfolio. In addition, under the 1940 Act, in the event asset coverage falls
below 300%, the Portfolio must within three days reduce the amount of its
borrowing to such an extent that the asset coverage of its borrowings is at
least 300%. Assuming, for example, outstanding borrowings representing not more
than one-third of the Portfolio's total assets less liabilities (other than such
borrowings), the asset coverage of the Portfolio's portfolio would be 300%;
while outstanding borrowings representing 25% of the total assets less
liabilities (other than such borrowings), the asset coverage of the Portfolio's
portfolio would be 400%. The Portfolio will maintain asset coverage of
outstanding borrowings of at least 300% and if necessary will, to the extent
possible, reduce the amounts borrowed by making repayments from time to time in
order to do so. Such repayments could require the Portfolio to sell portfolio
securities at times considered disadvantageous by the Investment Adviser and
such sales could cause the Portfolio to incur related transaction costs and to
realize taxable gains.

          Fundamental Investment Policies. The following restrictions supplement
those already discussed. These restrictions may not be changed without
shareholder approval which means the vote of (1) 67% or more of the shares of
the Portfolio represented at a meeting at which more than 50% of the outstanding
shares are represented or (2) more than 50% of the outstanding shares of the
Portfolio, whichever is less.

          The following restrictions provide that the Portfolio may not:

          1. purchase any security of any issuer (other than United States
Government securities) if as a result more than 5% of the value of its total
assets would consist of the securities of such issuer or the Portfolio would own
more than 10% of the outstanding voting securities of any issuer;

          2. purchase the securities of any other investment company except in a
regular transaction in the open market or as part of a merger, consolidation or
purchase of assets;

          3. invest more than 5% of the value of its total assets in the
securities of any issuer, the business of which has been in continuous operation
for less than three years;

          4. purchase or retain the securities of any issuer if those officers
and directors of the Fund or of the Investment Adviser beneficially owning
individually more than 1/2 of 1% of the securities of such issuer together
beneficially own more than 5% of the securities of such issuer;

          5. invest in other companies for the purpose of exercising control of
management;

          6. purchase securities on margin, except that the Portfolio may borrow
in an amount up to 10% of its total assets to meet redemption requests and for
the clearance of purchases and sales of portfolio securities (this borrowing
provision is not for investment leverage but solely to facilitate management of
the Portfolio to enable the Portfolio to meet redemption requests where the
liquidation of portfolio securities is deemed to be disadvantageous or
inconvenient and to obtain such short-term credits as may be necessary for the
clearance of purchases and sales of portfolio securities; all borrowings at any
time outstanding will be repaid before any additional investments are made; the
Portfolio will not mortgage, pledge or hypothecate any assets in connection with
any such borrowing in excess of 15% of the Portfolio's total assets) or sell
securities short;

          7. borrow money except as previously set forth in 6 above;

          8. make loans to other persons except loans of securities
collateralized in cash at 100% each business day (the acquisition of publicly
distributed bonds, debentures and other debt securities is not considered a
loan);

          9. purchase any security (other than United States Government
securities) if as a result more than 25% of the value of its total assets would
be invested in any one industry;

          10. underwrite securities issued by other persons;

          11. purchase any securities as to which it would be deemed a statutory
underwriter under the Securities Act, or any securities having no public market;

          12. purchase or sell commodities or commodity contracts;

          13. purchase or sell real estate, except that the Portfolio may invest
in marketable securities secured by real estate or interests therein or issued
by companies including real estate investment trusts, which deal in real estate
or interests therein;

          14. participate in a joint, or a joint and several, trading account in
securities;

          15. invest in interests in oil, gas or other mineral leases
exploration or development programs;

          16. issue any securities senior to the capital stock offered hereby;
or

          17. invest in warrants (other than warrants acquired by the Portfolio
as a part of a unit or attached to securities at the time of purchase) if, as a
result, such warrants valued at the lower of cost or market would exceed 5% of
the value of the Portfolio's net assets at the time of purchase provided that
not more than 2% of the Portfolio's net assets at the time of purchase may be
invested in warrants not listed on the New York Stock Exchange (the "Exchange")
or the American Stock Exchange.

          The foregoing percentage limitations will apply at the time of the
purchase of a security and shall not be considered violated unless an excess or
deficiency occurs or exists immediately after and as a result of an acquisition
of such security.

          The value of the Portfolio's shares will be influenced by the factors
that generally affect securities, such as the economic and political outlook,
earnings, dividends and the supply and demand for various classes of securities.
There can be, of course, no assurance that the Portfolio's investment objectives
will be achieved.

- ------------------------------------------------------------------------------

                             MANAGEMENT OF THE FUND
- ------------------------------------------------------------------------------

Board of Directors Information
- ------------------------------

          The business and affairs of the Fund are managed under the direction
of the Board of Directors. Certain information concerning the Fund's Directors
is set forth below.





NAME, ADDRESS                                                                   PORTFOLIOS IN FUND   OTHER DIRECTORSHIPS
AND DATE OF BIRTH                       PRINCIPAL OCCUPATION(S)                 COMPLEX OVERSEEN     HELD
(YEAR ELECTED*)                         DURING PAST 5 YEARS                     BY DIRECTOR          BY DIRECTOR
- -----------------                       -----------------------                 ------------------   -------------------

                                                                                            
INTERESTED DIRECTOR
Marc O. Mayer,**                        Executive Vice President of Alliance             66          None
1345 Avenue of the Americas,            Capital Management Corporation
New York, NY 10105                      ("ACMC") since 2001; prior thereto,
10/2/57                                 Chief Executive Officer of Sanford C.
(2003)                                  Bernstein & Co., LLC ("SCB & Co") and
                                        its predecessor since prior to 2000.


DISINTERESTED DIRECTORS
Chairman of the Board
William H. Foulk, Jr.,#                 Investment adviser and an independent           113          None
2 Sound View Drive, Suite 100,          consultant.  He was formerly Senior
Greenwich, CT 06830                     Manager of Barrett Associates, Inc.,
9/7/32                                  a registered investment adviser, with
(1998)                                  which he had been associated since
                                        prior to 2000.  He was formerly
                                        Deputy Comptroller and Chief
                                        Executive Officer of the State of New
                                        York and, prior thereto, Chief
                                        Investment Officer of the New York
                                        Bank for Savings.

Ruth Block,***#                         Formerly Executive Vice President and            94          None
500 SE Mizner Blvd.,                    Chief Insurance Officer of AXA
Boca Raton, FL 33432                    Equitable Life Insurance Company
11/7/30                                 ("Equitable"); Chairman and Chief
(1987)                                  Executive Officer of Evlico; Director
                                        of Avon, BP (oil and gas), Ecolab
                                        Incorporated (specialty chemicals),
                                        Tandem Financial Group and Donaldson,
                                        Lufkin & Jenrette Securities
                                        Corporation; former Governor at
                                        Large, National Association of
                                        Securities Dealers, Inc.

David H. Dievler,#                      Independent consultant.  Until                   98          None
P.O. Box 167,                           December 1994 he was Senior Vice
Spring Lake, NJ 07762                   President of ACMC responsible for
10/23/29                                mutual fund administration.  Prior to
(1987)                                  joining ACMC in 1984 he was Chief
                                        Financial Officer of Eberstadt Asset
                                        Management since 1968. Prior to that
                                        he was a Senior Manager at Price
                                        Waterhouse & Co. Member of American
                                        Institute of Certified Public
                                        Accountants since 1953.

John H. Dobkin,#                        Consultant.  Formerly President of               96          None
P.O. Box 12,                            Save Venice, Inc. (preservation
Annandale, NY 12504                     organization) from 2001-2002, Senior
2/19/42                                 Advisor from June 1999 - June 2000
(1998)                                  and President of Historic Hudson
                                        Valley (historic preservation) from
                                        December 1989 - May 1999. Previously,
                                        Director of the National Academy of
                                        Design and during 1988-1992, Director
                                        and Chairman of the Audit Committee of
                                        ACMC.

Michael J. Downey, #                    Consultant since January 2004.                   66          Asia Pacific Fund,
Alliance Capital Management L.P.        Formerly managing partner of                                 Inc., and The Merger
1345 Avenue of the Americas,            Lexington Capital, LLC (investment                           Fund
New York, NY 10105                      advisory firm) from 1997 until
1/26/44                                 December 2003.  Prior thereto,
(2005)                                  Chairman and CEO of Prudential Mutual
                                        Fund Management from 1987 to 1993.

- ---------------------------------------------------

*    There is no stated term of office for the Fund's Directors.
**   Mr. Mayer is an "interested person", as defined in the 1940 Act, due to his
     position as Executive Vice President of ACMC.
***  Ms. Block was an "interested person," as defined in the 1940 Act, until
     October 21, 2004 by reason of her ownership of 116 American Depositary
     Shares of AXA having a value of approximately $2,396 at that date. AXA is a
     controlling person of ACMC. Ms. Block received shares of The Equitable
     Companies Incorporated as part of the demutualization of the Equitable Life
     Assurance Society of the United States, which were subsequently converted
     through a corporate action into 116 American Depositary Shares of AXA.
#    Member of the Audit Committee and the Governance and Nominating Committee.

          The Fund's Board of Directors has two standing committees of the Board
- -- an Audit Committee and a Governance and Nominating Committee. The members of
the Audit and Governance and Nominating Committees are identified above. The
function of the Audit Committee is to assist the Board of Directors in its
oversight of the Portfolio's financial reporting process. The Audit Committee
met three times during the Portfolio's most recently completed fiscal year. The
function of the Governance and Nominating Committee is to nominate persons to
fill any vacancies or newly created positions on the Board of Directors. The
Governance and Nominating Committee met two times during the Portfolio's most
recently completed fiscal year.

          The Governance and Nominating Committee has a charter and, pursuant to
the charter, the Governance and Nominating Committee will consider candidates
for nomination as a director submitted by a shareholder or group of shareholders
who have beneficially owned at least 5% of the Portfolio's common stock or
shares of beneficial interest for at least two years at the time of submission
and who timely provide specified information about the candidates and the
nominating shareholder or group. To be timely for consideration by the
Governance and Nominating Committee, the submission, including all required
information, must be submitted in writing to the attention of the Secretary at
the principal executive offices of the Fund not less than 120 days before the
date of the proxy statement for the previous year's annual meeting of
shareholders. If the Fund did not hold an annual meeting of shareholders in the
previous year, the submission must be delivered or mailed and received within a
reasonable amount of time before the Portfolio begins to print and mail its
proxy materials. Public notice of such upcoming annual meeting of shareholders
may be given in a shareholder report or other mailing to shareholders or by
other means deemed by the Governance and Nominating Committee or the Board to be
reasonably calculated to inform shareholders.

          Shareholders submitting a candidate for consideration by the
Governance and Nominating Committee must provide the following information to
the Governance and Nominating Committee: (i) a statement in writing setting
forth (A) the name, date of birth, business address and residence address of the
candidate; (B) any position or business relationship of the candidate, currently
or within the preceding five years, with the shareholder or an associated person
of the shareholder as defined below; (C) the class or series and number of all
shares of the Portfolio owned of record or beneficially by the candidate; (D)
any other information regarding the candidate that is required to be disclosed
about a nominee in a proxy statement or other filing required to be made in
connection with the solicitation of proxies for election of Directors pursuant
to Section 20 of the 1940 Act and the rules and regulations promulgated
thereunder; (E) whether the shareholder believes that the candidate is or will
be an "interested person" of the Fund (as defined in the 1940 Act) and, if
believed not to be an "interested person," information regarding the candidate
that will be sufficient for the Fund to make such determination; and (F)
information as to the candidate's knowledge of the investment company industry,
experience as a director or senior officer of public companies, directorships on
the boards of other registered investment companies and educational background;
(ii) the written and signed consent of the candidate to be named as a nominee
and to serve as a Director if elected; (iii) the written and signed agreement of
the candidate to complete a directors' and officers' questionnaire if elected;
(iv) the shareholder's consent to be named as such by the Fund; (v) the class or
series and number of all shares of each portfolio of the Fund owned beneficially
and of record by the shareholder and any associated person of the shareholder
and the dates on which such shares were acquired, specifying the number of
shares owned beneficially but not of record by each, and stating the names of
each as they appear on the Fund's record books and the names of any nominee
holders for each; and (vi) a description of all arrangements or understandings
between the shareholder, the candidate and/or any other person or persons
(including their names) pursuant to which the recommendation is being made by
the shareholder. "Associated Person of the shareholder" means any person who is
required to be identified under clause (vi) of this paragraph and any other
person controlling, controlled by or under common control with, directly or
indirectly, (a) the shareholder or (b) the associated person of the shareholder.

          The Governance and Nominating Committee may require the shareholder to
furnish such other information as it may reasonably require or deem necessary to
verify any information furnished pursuant to the nominating procedures described
above or to determine the qualifications and eligibility of the candidate
proposed by the shareholder to serve on the Board. If the shareholder fails to
provide such other information in writing within seven days of receipt of
written request from the Governance and Nominating Committee, the recommendation
of such candidate as a nominee will be deemed not properly submitted for
consideration, and will not be considered, by the Committee.

          The Governance and Nominating Committee will consider only one
candidate submitted by such a shareholder or group for nomination for election
at an annual meeting of shareholders. The Governance and Nominating Committee
will not consider self-nominated candidates. The Governance and Nominating
Committee will consider and evaluate candidates submitted by shareholders on the
basis of the same criteria as those used to consider and evaluate candidates
submitted from other sources. These criteria include the candidate's relevant
knowledge, experience, and expertise, the candidate's ability to carry out his
or her duties in the best interests of the Fund, the candidate's ability to
qualify as a disinterested Director and such other criteria as the Governance
and Nominating Committee determines to be relevant in light of the existing
composition of the Board and any anticipated vacancies or other factors.

          In approving the most recent annual continuance of the Portfolio's
investment advisory contract ("Investment Advisory Contract"), the Directors
considered all information they deemed reasonably necessary to evaluate the
terms of the Investment Advisory Contract. The principal areas of review by the
Directors were the nature and quality of the services provided by the Investment
Adviser and the reasonableness of the fees charged for those services. These
matters were considered by the disinterested directors meeting separately from
the full Board with experienced counsel that is independent of the Investment
Adviser.

          The Directors' evaluation of the quality of the Investment Adviser's
services took into account their knowledge and experience gained through
meetings with and reports of the Investment Adviser's senior management,
portfolio managers and administrative personnel over the course of the preceding
year. Both short-term and long-term investment performance of the Portfolio, as
well as senior management's attention to any portfolio management issues, were
considered. The Portfolio's current and longer-term performance were compared to
its performance benchmark and to that of competitive funds and other funds with
similar investment objectives. The Directors also considered the scope and
quality of the in-house research capability of the Investment Adviser and other
resources dedicated to performing its services. The quality of administrative
and other services, including the Investment Adviser's role in coordinating the
activities of the Portfolio's other service providers, were considered in light
of on-going reports by management as to compliance with investment policies and
applicable laws and regulations and of related reports by management and the
Portfolio's independent registered public accounting firm in periodic meetings
with the Fund's Audit Committee.

          In reviewing the fees payable under the Investment Advisory Contract,
the Directors compared the fees and overall expense levels of the Portfolio to
those of competitive funds and other funds with similar investment objectives.
The information on advisory fees and expense ratios, as well as performance
data, included both information compiled by the Investment Adviser and
information compiled by an independent data service. The Directors also
considered the fees of the Portfolio as a percentage of assets at different
asset levels and possible economies of scale to the Investment Adviser. The
Directors considered information provided by the Investment Adviser concerning
the Investment Adviser's profitability with respect to the Portfolio, including
the assumptions and methodology used in preparing the profitability information,
in light of applicable case law relating to advisory fees. For these purposes,
the Directors took into account not only the fees paid by the Portfolio, but
also so-called "fallout benefits" to the Investment Adviser, such as the
engagement of affiliates of the Investment Adviser to provide distribution and
transfer agency services to the Portfolio, and that the Investment Advisory
Contract provides that the Portfolio reimburses the Investment Adviser for the
cost of providing certain administrative services. In evaluating the Portfolio's
advisory fees, the Directors also took into account the demands, complexity and
quality of the investment management of the Portfolio.

          The Directors also considered the business reputation of the
Investment Adviser and its financial resources. The Directors evaluated the
procedures and systems adopted by the Investment Adviser that are designed to
fulfill the Investment Adviser's fiduciary duty to the Portfolio with respect to
possible conflicts of interest, including the Investment Adviser's code of
ethics (regulating the personal trading of its officers and employees) and the
allocation of trades among its various investment advisory clients. The
Directors also considered information concerning policies and procedures of the
Investment Adviser with respect to the execution of portfolio transactions.

          No single factor was considered in isolation or to be determinative to
the decision of the Directors to approve continuance of the Investment Advisory
Contract. Rather, the Directors concluded in light of a weighing and balancing
of all factors considered that it was in the best interests of the Portfolio to
continue its Investment Advisory Contract without modification to its terms,
including the fees charged for services thereunder.

          The dollar range of the Portfolio's securities owned by each Director
and the aggregate dollar range of securities of all the registered investment
companies to which the Investment Adviser provides investment advisory services
(collectively, the "AllianceBernstein Fund Complex") owned by each Director are
set forth below.

                                                 AGGREGATE DOLLAR
                        DOLLAR RANGE OF          RANGE OF EQUITY
                        EQUITY SECURITIES        SECURITIES IN THE
                        IN THE PORTFOLIO AS OF   ALLIANCEBERNSTEIN FUND COMPLEX
                        DECEMBER 31, 2004        AS OF DECEMBER 31, 2004
                        -----------------        -----------------------

Marc O. Mayer           None                     Over $100,000
Ruth Block              $10,001 - $50,000        Over $100,000
David H. Dievler        None                     Over $100,000
John H. Dobkin          None                     Over $100,000
Michael J. Downey       None                     None
William H. Foulk, Jr.   None                     Over $100,000

Officer Information
- -------------------

          Certain information concerning the Fund's officers is set forth below.



NAME, ADDRESS,*       POSITION(S) HELD        PRINCIPAL OCCUPATION
AND DATE OF BIRTH     WITH FUND               DURING PAST 5 YEARS
- -----------------     ----------------        --------------------
                                        
Marc O. Mayer         President and Chief     See biography above.
10/2/57               Executive Officer

Philip L. Kirstein    Senior Vice President   Senior Vice President and Independent
5/29/45               and Independent         Compliance Officer - Mutual Funds of
                      Compliance Officer      ACMC,** with which he has been associated
                                              since October 2004.  Prior thereto, he was
                                              Of Counsel to Kirkpatrick & Lockhart, LLP
                                              from October 2003 to October 2004, and
                                              General Counsel and First Vice President
                                              of Merrill Lynch Investment Managers L.P.
                                              since prior to 2000.

Matthew D.W. Bloom    Vice President          Senior Vice President of ACMC,** with
7/15/56                                       which he has been associate since prior to
                                              2000.

Paul J. DeNoon        Vice President          Senior Vice President of ACMC,** with
4/18/62                                       which he has been associated since prior
                                              to 2000.

Jeffrey S. Phlegar    Vice President          Senior Vice President of ACMC** with which
6/28/66                                       he has been associated since prior to
                                              2000.

Lawrence J. Shaw      Vice President          Senior Vice President of ACMC,** with
2/9/51                                        which he has been associated since prior
                                              to 2000.

Michael A. Snyder     Vice President          Senior Vice President of ACMC** since May
4/18/62                                       2001. Previously he was a Managing
                                              Director in the high yield asset
                                              management group at Donaldson, Lufkin &
                                              Jenrette Corporation since prior to 2000.

Mark R. Manley        Secretary               Senior Vice President, Deputy General
10/23/62                                      Counsel and Chief Compliance Officer of
                                              ACMC,** with which he has been associated
                                              since prior to 2000.

Andrew L. Gangolf     Assistant Secretary     Senior Vice President and Assistant
8/15/54                                       General Counsel of AllianceBernstein
                                              Investment Research & Management, Inc.
                                              ("ABIRM"),** with which he has been
                                              associated since prior to 2000.

Mark D. Gersten       Treasurer and Chief     Senior Vice President of AGIS** and Vice
10/4/50               Financial Officer       President of ABIRM,** with which he has
                                              been associated since prior to 2000.

Vincent S. Noto       Controller              Vice President of AGIS,** with which he
12/14/64                                      has been associated since prior to 2000.

- -------------------
*    The address for each of the Fund's officers is 1345 Avenue of the Americas,
     New York, NY 10105.
**   ACMC, ABIRM, AGIS and SCB & Co. are affiliates of the Fund.

          The Portfolio does not pay any fees to, or reimburse expenses of, its
Directors who are considered "interested persons" of the Portfolio. The
aggregate compensation paid by the Portfolio to each of the Directors during its
fiscal year ended September 30, 2004, the aggregate compensation paid to each of
the Directors during calendar year 2004 by AllianceBernstein Fund Complex, and
the total number of registered investment companies (and separate investment
portfolios within those companies) in the AllianceBernstein Fund Complex with
respect to which each of the Directors serves as a director or trustee are set
forth below. Neither the Portfolio nor any other fund in the AllianceBernstein
Fund Complex provides compensation in the form of pension or retirement benefits
to any of its directors or trustees. Each of the Directors is a director or
trustee of one or more other registered investment companies in the
AllianceBernstein Fund Complex.



                                                                 Total Number    Total Number
                                                                 of Investment   of Investment
                                                                 Companies in    Portfolios within
                                                                 the Alliance-   the Alliance-
                                                                 Bernstein       Bernstein
                                            Total                Fund Complex,   Fund Complex,
                        Aggregate           Compensation         Including the   Including the
                        Compensation        from the Alliance-   Portfolio, as   Portfolio, as
                        from the            Bernstein Fund       to which the    to which the
                        Portfolio for the   Complex,             Director is     Director is
                        Fiscal Year         Including            a Director      a Director
Name of Director        Ended 9/30/04       the Portfolio        or Trustee      or Trustee
- ----------------        -------------       -------------        ----------      ----------

                                                                         
Marc O. Mayer           $0                  $0                        38              66
Ruth Block              $2,201              $223,200                  41              94
David H. Dievler        $2,180              $268,250                  45              98
John H. Dobkin          $2,188              $252,900                  43              96
Michael J. Downey       $0                  $0                        38              66
William H. Foulk, Jr.   $3,483              $465,250                  49             113



          As of January 12, 2005, the Directors and officers of the Fund as a
group owned less than 1% of the shares of the Portfolio.

Investment Adviser
- ------------------

          Alliance, a Delaware limited partnership with principal offices at
1345 Avenue of the Americas, New York, New York 10105, has been retained under
an investment advisory agreement (the "Advisory Agreement") to provide
investment advice and, in general, to conduct the management and investment
program of the Portfolio under the supervision of the Fund's Board of Directors
(see "Management of the Funds" in the Prospectus).

          Alliance is a leading global investment management firm supervising
client accounts with assets as of December 31, 2004, totaling approximately $539
billion. Alliance provides management services for many of the largest U.S.
public and private employee benefit plans, endowments, foundations, public
employee retirement funds, banks, insurance companies and high net worth
individuals worldwide. Alliance is also one of the largest mutual fund sponsors,
with a diverse family of globally distributed mutual fund portfolios. As one of
the world's leading global investment management organizations, Alliance is able
to compete for virtually any portfolio assignment in any developed capital
market in the world.

          Alliance is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. As of September 30, 2004, Alliance Capital
Management Holding, L.P. ("Holding"), a Delaware limited partnership, owned
approximately 31.6% of the issued and outstanding units of limited partnership
interest in Alliance ("Alliance Units"). Units representing assignments of
beneficial ownership of limited partnership interests in Holding ("Holding
Units") trade publicly on the New York Stock Exchange ("Exchange") under the
ticker symbol "AC". Alliance Units do not trade publicly and are subject to
significant restrictions on transfer. Alliance Capital Management Corporation
("ACMC") is the general partner of both Alliance and Holding. ACMC owns 100,000
general partnership units in Holding and a 1% general partnership interest in
Alliance. ACMC is an indirect wholly-owned subsidiary of AXA Financial, Inc.
("AXA Financial"), a Delaware corporation.

          As of September 30, 2004, AXA, AXA Financial, AXA Equitable Life
Insurance Company ("Equitable") and certain subsidiaries of Equitable
beneficially owned approximately 57.8% of the issued and outstanding Alliance
Units and approximately 1.8% of the issued and outstanding Holding Units that,
including the general partnership interests in Alliance and Holding, represent
an economic interest of approximately 58.3% in Alliance. As of September 30,
2004, SCB Partners, Inc., a wholly-owned subsidiary of SCB, Inc., beneficially
owned approximately 9.7% of the issued and outstanding Alliance Units.

          AXA, a French company, is the holding company for an international
group of companies and a worldwide leader in financial protection and wealth
management. AXA operates primarily in Western Europe, North America and the
Asia/Pacific region and, to a lesser extent, in other regions including the
Middle East, Africa and South America. AXA has five operating business segments:
life and savings, property and casualty insurance, international insurance
(including reinsurance), asset management and other financial services. AXA
Financial is a wholly-owned subsidiary of AXA. Equitable is an indirect
wholly-owned subsidiary of AXA Financial.

          Based on information provided by AXA, as of February 1, 2004,
approximately 16.89% of the issued ordinary shares (representing 27.55% of the
voting power) of AXA were owned directly and indirectly by Finaxa, a French
holding company. As of February 1, 2004, 71.11% of the shares (representing
80.36% of the voting power) of Finaxa were owned by three French mutual
insurance companies (the "Mutuelles AXA") and 21.32% of the shares of Finaxa
(representing 12.80% of the voting power) were owned by BNP Paribas, a French
bank. As of February 1, 2004, the Mutuelles AXA owned directly or indirectly
through intermediate holding companies (including Finaxa) approximately 20.17%
of the issued ordinary shares (representing 32.94% of the voting power) of AXA.

          Under the Investment Advisory Contract, the Investment 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 Investment Adviser. The Investment 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.

          The Investment Adviser is, under the Investment Advisory Contract,
responsible for certain expenses incurred by the Fund, including, for example,
office facilities and certain administrative services, and any expenses incurred
in promoting the sale of Fund shares (other than the portion of the promotional
expenses borne by the Fund in accordance with an effective plan pursuant to Rule
12b-1 under the 1940 Act, and the costs of printing Fund prospectuses and other
reports to shareholders and fees related to registration with the Commission and
with state regulatory authorities).

          The Fund has, under the Investment Advisory Contract, assumed the
obligation for payment of all of its other expenses. As to the obtaining of
services other than those specifically provided to the Fund by the Investment
Adviser, the Fund may employ its own personnel. For such services, it may also
utilize personnel employed by the Investment Adviser or its affiliates, and, in
such event, the services will be provided to the Fund at cost with the payments
specifically approved by the Fund's Board of Directors. For the fiscal year
ended September 30, 2004, the Portfolio paid to the Investment Adviser a total
of $98,000 with respect to such services.

          Under the terms of the Investment Advisory Contract, the Portfolio
paid the Investment Adviser a monthly fee of 1/12 of .625 of 1% of the first
$500 million of the Portfolio's average net assets and 1/12 of .50 of 1% of the
excess over $500 million of such average net assets. Effective as of January 1,
2004, the Investment Adviser voluntarily waived a portion of its advisory fee.
The advisory fee waiver reduced the advisory fees to 0.50% on an annual basis of
the first $2.5 billion, 0.45% on an annual basis of the excess over $2.5 billion
up to $5 billion and 0.40% on an annual basis of the excess over $5 billion as a
percentage of the Fund's average daily net assets. The fee is accrued daily and
paid monthly. Effective September 7, 2004 the Board of Directors approved an
amendment to the Investment Advisory Contract to reduce the contractual advisory
fees to these amounts.

          For the fiscal years ended June 30, 2002 and 2003, the fiscal period
ended September 30, 2003 and the fiscal year ended September 30, 2004, the
Investment Adviser received under the Investment Advisory Contract the amounts
of $7,038,525, $6,127,526, $1,524,079 and $5,041,843 (net of $426,912, which was
waived by the Investment Adviser under the agreement with the New York Attorney
General), respectively, as advisory fees from the Portfolio.

          The Investment Advisory Contract became effective on July 22, 1992.
The Investment Advisory Contract was approved by the unanimous vote, cast in
person, of the Fund's Directors, including the Directors who are not parties to
the Investment Advisory Contract or "interested persons" as defined in the 1940
Act of any such party, at a meeting called for such purpose and held on
September 11, 1991.

          The Investment Advisory Contract continues in effect provided that
such continuance is specifically approved at least annually by a vote of a
majority of the Portfolio'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 Investment Advisory Contract or interested persons of
any such party. Most recently, continuance of the Investment Advisory Contract
for an additional annual term was approved by vote, cast in person, by the Board
of Directors, including a majority of the Directors who are not "interested
persons" as defined in the 1940 Act, at their meeting held on June 15-17, 2004.

          The Investment Advisory Contract is terminable without penalty on 60
days' written notice, 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 or by the
Investment Adviser on 60 days' written notice, and will automatically terminate
in the event of its assignment. The Investment Advisory Contract provides that
in the absence of willful misfeasance, bad faith or gross negligence on the part
of the Investment Adviser, or of reckless disregard of its obligations
thereunder, the Investment Adviser shall not be liable for any action or failure
to act in accordance with its duties thereunder.

          The Investment Adviser may act as an investment adviser to other
persons, firms or corporations, including investment companies, and is the
investment adviser to the following registered investment companies:
AllianceBernstein All-Asia Investment Fund, Inc., AllianceBernstein Americas
Government Income Trust, Inc., AllianceBernstein Balanced Shares, Inc.,
AllianceBernstein Blended Style Series, Inc., AllianceBernstein Cap Fund, Inc.,
AllianceBernstein Capital Reserves, AllianceBernstein Emerging Market Debt Fund,
Inc., AllianceBernstein Exchange Reserves, AllianceBernstein Focused Growth &
Income Fund, Inc., AllianceBernstein Global Health Care Fund, Inc.,
AllianceBernstein Global Research Growth Fund, Inc., AllianceBernstein Global
Strategic Income Trust, Inc., AllianceBernstein Global Technology Fund, Inc.,
AllianceBernstein Government Reserves, AllianceBernstein Greater China `97 Fund,
Inc., AllianceBernstein Growth and Income Fund, Inc., AllianceBernstein High
Yield Fund, Inc., AllianceBernstein Institutional Funds, Inc., AllianceBernstein
Institutional Reserves, Inc., AllianceBernstein International Premier Growth
Fund, Inc., AllianceBernstein Large Cap Growth Fund, Inc., AllianceBernstein
Mid-Cap Growth Fund, Inc., AllianceBernstein Multi-Market Strategy Trust, Inc.,
AllianceBernstein Municipal Income Fund, Inc., AllianceBernstein Municipal
Income Fund II, AllianceBernstein Municipal Trust, AllianceBernstein New Europe
Fund, Inc., AllianceBernstein Real Estate Investment Fund, Inc.,
AllianceBernstein Trust, AllianceBernstein Utility Income Fund, Inc.,
AllianceBernstein Variable Products Series Fund, Inc., AllianceBernstein
Worldwide Privatization Fund, Inc., The AllianceBernstein Portfolios, Sanford C.
Bernstein Fund, Inc. and Sanford C. Bernstein Fund II, Inc., all registered
open-end investment companies; and to ACM Government Opportunity Fund, Inc., ACM
Income Fund, Inc., ACM Managed Income Fund, Inc., ACM Managed Dollar Income
Fund, Inc., ACM Municipal Securities Income Fund, Inc., Alliance All-Market
Advantage Fund, Inc., Alliance California Municipal Income Fund, Inc., Alliance
National Municipal Income Fund, Inc., Alliance New York Municipal Income Fund,
Inc., Alliance World Dollar Government Fund, Inc., Alliance World Dollar
Government Fund II, Inc. and The Spain Fund, Inc., all registered closed-end
investment companies.

Additional Information About the Fund's Portfolio Managers
- ----------------------------------------------------------

          The management of and investment decisions for the Fund's portfolio
are made by the US Investment Grade: Corporate Bond and US High Yield Investment
Team. Mr. Lawrence Shaw and Mr. Michael Snyder are the investment
professionals(1) with the most significant responsibility for the day-to-day
management of the Fund's portfolio. For additional information about the
portfolio management of the Fund, see "Management of the Fund - Portfolio
Managers" in the Fund's prospectus.

- ---------------
(1)  Investment professionals at Alliance include portfolio managers and
     research analysts. Investment professionals are part of investment groups
     (or teams) that service individual fund portfolios. The number of
     investment professionals assigned to a particular fund will vary from fund
     to fund.

          The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers are set forth below:



                DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(2)

                          As of December 31, 2004      As of March 31, 2005
     Mr. Lawrence Shaw            None                          None
     Mr. Michael Snyder           None                          None

- ---------------
(2)  The ranges presented above include any vested shares awarded under
     Alliance's Partners Compensation Plan and/or the Profit Sharing/401(k) Plan
     (the "Plans").

          As of March 31, 2005, Alliance Capital employees had approximately
$2,878,697 invested in shares of the Fund and approximately $455,549,796 in
shares of all AllianceBernstein Mutual Funds (excluding AllianceBernstein money
market funds) through their interests in the Profit Sharing/401(k) Plan and/or
the Partners Compensation Plan, including both vested and unvested amounts.

          The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and
other accounts over which the Fund's portfolio managers also have day-to-day
management responsibilities. The tables provide the numbers of such accounts,
the total assets in such accounts and the number of accounts and total assets
whose fees are based on performance. The information is provided as of December
31, 2004.

                         REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)

                                                    Number of      Total Assets
                                                    Registered     of Registered
                    Total Number    Total Assets    Investment     Investment
                    of Registered   of Registered   Companies      Companies
                    Investment      Investment      Managed with   Managed with
                    Companies       Companies       Performance-   Performance-
Portfolio Manager   Managed         Managed         based Fees     based Fees
- -----------------   -------------   -------------   ------------   -------------
Mr. Lawrence Shaw      2            $274,228,837    None           None
Mr. Michael Snyder     3            $699,609,296    None           None



                        OTHER POOLED INVESTMENT VEHICLES

                                                   Number of      Total Assets
                                                   Pooled         of Pooled
                     Total Number   Total Assets   Investment     Investment
                     of Pooled      of Pooled      Vehicles       Vehicles
                     Investment     Investment     Managed with   Managed with
                     Vehicles       Vehicles       Performance-   Performance-
Portfolio Manager    Managed        Managed        based Fees     based Fees
- -----------------    ------------   ------------   ------------   ------------
Mr. Lawrence Shaw    None           None           None           None
Mr. Michael Snyder   None           None           None           None


                                 OTHER ACCOUNTS

                                                     Number of
                                                     Other          Total Assets
                                                     Accounts       of Other
                     Total Number   Total Assets     Managed        Accounts
                     of Other       of Other         with           with
                     Accounts       Accounts         Performance-   Performance-
Portfolio Manager    Managed        Managed          based Fees     based Fees
- -----------------    ------------   ------------     ------------   ------------
Mr. Lawrence Shaw    5              $2,049,376,955   None           None
Mr. Michael Snyder   None           None             None           None


Investment Professional Conflict of Interest Disclosure
- -------------------------------------------------------

          As an investment adviser and fiduciary, Alliance owes its clients and
shareholders an undivided duty of loyalty. We recognize that conflicts of
interest are inherent in our business and accordingly have developed policies
and procedures (including oversight monitoring) reasonably designed to detect,
manage and mitigate the effects of actual or potential conflicts of interest in
the area of employee personal trading, managing multiple accounts for multiple
clients, including AllianceBernstein Mutual Funds, and allocating investment
opportunities. Investment professionals, including portfolio managers and
research analysts, are subject to the above-mentioned policies and oversight
monitoring to ensure that all clients are treated equitably. We place the
interests of our clients first and expect all of our employees to meet their
fiduciary duties.

          Employee Personal Trading. Alliance has adopted a Code of Business
Conduct and Ethics that is designed to detect and prevent conflicts of interest
when investment professionals and other personnel of Alliance own, buy or sell
securities which may be owned by, or bought or sold for, clients. Personal
securities transactions by an employee may raise a potential conflict of
interest when an employee owns or trades in a security that is owned or
considered for purchase or sale by a client, or recommended for purchase or sale
by an employee to a client. Subject to the reporting requirements and other
limitations of its Code of Business Conduct and Ethics, Alliance permits its
employees to engage in personal securities transactions, and also allows them to
acquire investments in the AllianceBernstein Mutual Funds through direct
purchase, 401K/profit sharing plan investment and/or notionally in connection
with deferred incentive compensation awards. Alliance's Code of Ethics and
Business Conduct requires disclosure of all personal accounts and maintenance of
brokerage accounts with designated broker-dealers approved by Alliance. The Code
also requires preclearance of all securities transactions and imposes a one-year
holding period for securities purchased by employees to discourage short-term
trading.

          Managing Multiple Accounts for Multiple Clients. Alliance has
compliance policies and oversight monitoring in place to address conflicts of
interest relating to the management of multiple accounts for multiple clients.
Conflicts of interest may arise when an investment professional has
responsibilities for the investments of more than one account because the
investment professional may be unable to devote equal time and attention to each
account. The investment professional or investment professional teams for each
client may have responsibilities for managing all or a portion of the
investments of multiple accounts with a common investment strategy, including
other registered investment companies, unregistered investment vehicles, such as
hedge funds, pension plans, separate accounts, collective trusts and charitable
foundations. Among other things, Alliance's policies and procedures provide for
the prompt dissemination to investment professionals of initial or changed
investment recommendations by analysts so that investment professionals are
better able to develop investment strategies for all accounts they manage. In
addition, investment decisions by investment professionals are reviewed for the
purpose of maintaining uniformity among similar accounts and ensuring that
accounts are treated equitably. No investment professional that manages client
accounts carrying performance fees is compensated directly or specifically for
the performance of those accounts. Investment professional compensation reflects
a broad contribution in multiple dimensions to long-term investment success for
our clients and is not tied specifically to the performance of any particular
client's account, nor is it directly tied to the level or change in level of
assets under management.

          Allocating Investment Opportunities. Alliance has policies and
procedures intended to address conflicts of interest relating to the allocation
of investment opportunities. These policies and procedures are designed to
ensure that information relevant to investment decisions is disseminated
promptly within its portfolio management teams and investment opportunities are
allocated equitably among different clients. The investment professionals at
Alliance routinely are required to select and allocate investment opportunities
among accounts. Portfolio holdings, position sizes, and industry and sector
exposures tend to be similar across similar accounts, which minimizes the
potential for conflicts of interest relating to the allocation of investment
opportunities. Nevertheless, investment opportunities may be allocated
differently among accounts due to the particular characteristics of an account,
such as size of the account, cash position, tax status, risk tolerance and
investment restrictions or for other reasons.

          Alliance's procedures are also designed to prevent potential conflicts
of interest that may arise when Alliance has a particular financial incentive,
such as a performance-based management fee, relating to an account. An
investment professional may perceive that he or she has an incentive to devote
more time to developing and analyzing investment strategies and opportunities or
allocating securities preferentially to accounts for which Alliance could share
in investment gains.

          To address these conflicts of interest, Alliance's policies and
procedures require, among other things, the prompt dissemination to investment
professionals of any initial or changed investment recommendations by analysts;
the aggregation of orders to facilitate best execution for all accounts; price
averaging for all aggregated orders; objective allocation for limited investment
opportunities (e.g., on a rotational basis) to ensure fair and equitable
allocation among accounts; and limitations on short sales of securities. These
procedures also require documentation and review of justifications for any
decisions to make investments only for select accounts or in a manner
disproportionate to the size of the account.

Portfolio Manager Compensation
- ------------------------------

          Alliance's compensation program for investment professionals is
designed to be competitive and effective in order to attract and retain the
highest caliber employees. The compensation program for investment professionals
is designed to reflect their ability to generate long-term investment success
for our clients, including shareholders of the AllianceBernstein Mutual Funds.
Investment professionals do not receive any direct compensation based upon the
investment returns of any individual client account, nor is compensation tied
directly to the level or change in level of assets under management. Investment
professionals' annual compensation is comprised of the following:

          (i) Fixed base salary: This is generally the smallest portion of
compensation. The base salary is a relatively low, fixed salary within a similar
range for all investment professionals. The base salary is determined at the
outset of employment based on level of experience, does not change significantly
from year-to-year and hence, is not particularly sensitive to performance.

          (ii) Discretionary incentive compensation in the form of an annual
cash bonus: Alliance's overall profitability determines the total amount of
incentive compensation available to investment professionals. This portion of
compensation is determined subjectively based on qualitative and quantitative
factors. In evaluating this component of an investment professional's
compensation, Alliance considers the contribution to his/her team or discipline
as it relates to that team's overall contribution to the long-term investment
success, business results and strategy of Alliance. Quantitative factors
considered include, among other things, relative investment performance (e.g.,
by comparison to competitor or peer group funds or similar styles of
investments, and appropriate, broad-based or specific market indices), and
consistency of performance. There are no specific formulas used to determine
this part of an investment professional's compensation and the compensation is
not tied to any pre-determined or specified level of performance. Alliance also
considers qualitative factors such as the complexity and risk of investment
strategies involved in the style or type of assets managed by the investment
professional; success of marketing/business development efforts and client
servicing; seniority/length of service with the firm; management and supervisory
responsibilities; and fulfillment of Alliance's leadership criteria.

          (iii) Discretionary incentive compensation in the form of awards under
Alliance's Partners Compensation Plan ("deferred awards"): Alliance's overall
profitability determines the total amount of deferred awards available to
investment professionals. The deferred awards are allocated among investment
professionals based on criteria similar to those used to determine the annual
cash bonus. There is no fixed formula for determining these amounts. Deferred
awards, for which there are various investment options, vest over a four-year
period and are generally forfeited if the employee resigns or Alliance
terminates his/her employment. Investment options under the deferred awards plan
include many of the same AllianceBernstein Mutual Funds offered to mutual fund
investors, thereby creating a close alignment between the financial interests of
the investment professionals and those of Alliance's clients and mutual fund
shareholders with respect to the performance of those mutual funds. Alliance
also permits deferred award recipients to allocate up to 50% of their award to
investments in Alliance's publicly traded equity securities.(3)

- ---------------
(3)  Prior to 2002, investment professional compensation also included
     discretionary long-term incentive in the form of restricted grants of
     Alliance Capital's Master Limited Partnership Units.


          (iv) Contributions under Alliance's Profit Sharing/401(k) Plan: The
contributions are based on Alliance's overall profitability. The amount and
allocation of the contributions are determined at the sole discretion of
Alliance.


Distribution Services Agreement
- -------------------------------

          The Fund has entered into a Distribution Services Agreement (the
"Agreement") with ABIRM, the Fund's principal underwriter (the "Principal
Underwriter"), to permit the Principal Underwriter to distribute the Portfolio's
shares and to permit the Fund to pay distribution services fees to defray
expenses associated with the distribution of its Class A shares, Class B shares,
Class C shares, Class R shares and Class K shares in accordance with a plan of
distribution that is included in the Agreement and has been duly adopted and
approved in accordance with Rule 12b-1 adopted by the Commission under the 1940
Act (the "Rule 12b-1 Plan").

          During the Portfolio's fiscal year ended September 30, 2004, with
respect to Class A shares, the distribution services fees for expenditures
payable to the Principal Underwriter amounted to $1,548,135, which constituted
..30%, annually, of the Portfolio's aggregate average daily net assets
attributable to Class A shares during the fiscal year, and the Investment
Adviser made payments from its own resources aggregating $858,469. Of the
$2,406,604 paid by the Portfolio and the Investment Adviser under the Rule 12b-1
Plan with respect to Class A shares, $2,837 was spent on advertising, $14,403 on
the printing and mailing of prospectuses for persons other than current
shareholders, $1,873,472 for compensation to broker-dealers and other financial
intermediaries (including $390,981 to the Fund's Principal Underwriter),
$144,123 for compensation to sales personnel, and $371,769 was spent on printing
of sales literature, travel, entertainment, due diligence and other promotional
expenses.

          During the Portfolio's fiscal year ended September 30, 2004, with
respect to Class B shares, distribution services fees for expenditures payable
to the Principal Underwriter amounted to $3,177,100, which constituted 1.00%,
annually, of the Portfolio's aggregate average daily net assets attributable to
Class B shares during such fiscal year, and the Investment Adviser made payments
from its own resources aggregating $0. Of the $3,177,100 paid by the Portfolio
and the Investment Adviser under the Rule 12b-1 Plan with respect to Class B
shares, $1,468 was spent on advertising, $5,105 on the printing and mailing of
prospectuses for persons other than current shareholders, $1,090,712 for
compensation to broker-dealers and other financial intermediaries (including
$142,199 to the Fund's Principal Underwriter), $45,133 for compensation paid to
sales personnel, $133,587 was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses, $214,715 was spent
on financing of interest relating to Class B shares, and $1,686,380 was used to
offset the distribution service fees paid in prior years.

          During the Portfolio's fiscal year ended September 30, 2004, with
respect to Class C shares, distribution services fees for expenditures payable
to the Principal Underwriter amounted to $1,399,116, which constituted 1.00%,
annually, of the Portfolio's aggregate average daily net assets attributable to
Class C shares during such fiscal year, and the Investment Adviser made payments
from its own resources aggregating $243,257. Of the $1,642,373 paid by the
Portfolio and the Investment Adviser under the Rule 12b-1 Plan with respect to
Class C shares, $1,072 was spent on advertising, $3,170 on the printing and
mailing of prospectuses for persons other than current shareholders, $1,492,179
for compensation to broker-dealers and other financial intermediaries (including
$111,185 to the Fund's Principal Underwriter), $38,021 for compensation paid to
sales personnel,$104,708 was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses, and $3,223 was
spent on financing of interest relating to Class C shares.

          During the Portfolio's fiscal year ended September 30, 2004, with
respect to Class R shares, distribution services fees for expenditures payable
to the Principal Underwriter amounted to $46, which constituted .50%, annually,
of the Portfolio's aggregate average daily net assets attributable to Class R
shares during such fiscal year, and the Investment Adviser made payments from
its own resources aggregating $865. Of the $911 paid by the Portfolio and the
Investment Adviser under the Rule 12b-1 Plan with respect to Class R shares, $0
was spent on advertising, $0 on the printing and mailing of prospectuses for
persons other than current shareholders and $561 for compensation to
broker-dealers and other financial intermediaries (including $396 to the Fund's
Principal Underwriter), $0 for compensation paid to sales personnel, $350 was
spent on printing of sales literature, travel, entertainment, due diligence and
other promotional expenses, and $0 was spent on financing of interest relating
to Class R shares.

          The Portfolio did not pay any distribution services fees for
expenditures under the Agreement to the Principal Underwriter with respect to
Class K shares, because Class K shares of the Portfolio were not sold prior to
the end of the Portfolio's most recently completed fiscal year.

          Distribution services fees are accrued daily and paid monthly and are
charged as expenses of the Portfolio as accrued. The distribution services fees
attributable to the Class B, Class C, Class R and Class K shares are designed to
permit an investor to purchase such shares through broker-dealers without the
assessment of an initial sales charge, and at the same time to permit the
Principal Underwriter to compensate broker-dealers in connection with the sale
of such shares. In this regard, the purpose and function of the combined
contingent deferred sales charge ("CDSC") and distribution services fee on the
Class B shares and Class C shares and the distribution services fees on Class R
shares and Class K shares are the same as those of the initial sales charge and
distribution services fee with respect to the Class A shares in that in each
case the sales charge and/or distribution services fee provide for the financing
of the distribution of the relevant class of the Portfolio's shares.

          With respect to Class A shares of the Portfolio, distribution expenses
accrued by ABIRM in one fiscal year may not be paid from distribution services
fees received from the Portfolio in subsequent fiscal years. ABIRM's
compensation with respect to Class B, Class C, Class R and Class K shares under
the Rule 12b-1 Plan is directly tied to the expenses incurred by ABIRM. Actual
distribution expenses for Class B, Class C, Class R and Class K shares for any
given year, however, will probably exceed the distribution services fee payable
under the Rule 12b-1 Plan with respect to the class involved and, in the case of
Class B and Class C shares, payments received from CDSCs. The excess will be
carried forward by ABIRM and reimbursed from distribution services fees payable
under the Rule 12b-1 Plan with respect to the class involved and, in the case of
Class B and Class C shares, payments subsequently received through CDSCs, so
long as the Rule 12b-1 Plan is in effect.

          Unreimbursed distribution expenses incurred as of the end of the
Portfolio's most recently completed fiscal year ended September 30, 2004, and
carried over for reimbursement in future years in respect of the Class B, Class
C and Class R shares for the Portfolio, were, respectively, $12,051,057 (4.80%
of net assets of Class B shares), $6,266,189 (4.95% of net assets of Class C
shares).

          The Rule 12b-1 Plan is in compliance with rules of the National
Association of Securities Dealers, Inc. ("NASD") which effectively limit the
annual asset-based sales charges and service fees that a mutual fund may pay on
a class of shares to .75% and .25%, respectively, of the average annual net
assets attributable to that class. The rules also limit the aggregate of all
front-end, deferred and asset-based sales charges imposed with respect to a
class of shares by a mutual fund that also charges a service fee to 6.25% of
cumulative gross sales of shares of that class, plus interest at the prime rate
plus 1% per annum.

          In approving the Rule 12b-1 Plan, the Directors of the Fund determined
that there was a reasonable likelihood that the Rule 12b-1 Plan would benefit
the Fund and its shareholders. The distribution services fee of a particular
class will not be used to subsidize the provision of distribution services with
respect to any other class.

          The Investment 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.

          The Agreement will continue in effect provided 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 this 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. Most recently
the Directors approved the continuance of the Agreement for an additional annual
term at their meeting held on June 15-17, 2004.

          All material amendments to the Agreement will become effective only
upon approval as provided in the preceding paragraph; and the Agreement may not
be amended in order to increase materially the costs that the Fund may bear
pursuant to the Agreement without the approval of a majority of the holders of
the outstanding voting shares of the Fund or the class or classes of the Fund
affected. The Agreement may be terminated (a) by the Fund without penalty at any
time by a majority vote of the holders of the Fund's outstanding voting
securities, voting separately by class, or by a majority vote of the
disinterested Directors 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 is not required to give prior
notice to the Principal Underwriter. The Agreement will terminate automatically
in the event of its assignment.

          In the event that the Rule 12b-1 Plan is terminated by either party or
not continued with respect to the Class A shares, Class B shares, Class C
shares, Class R shares or Class K 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.

Transfer Agency Agreement
- -------------------------

          AGIS, an indirect wholly-owned subsidiary of the Investment Adviser,
located principally at 500 Plaza Drive, Secaucus, NJ 07094 and with operations
at 8000 IH 10 W, 4th Floor, San Antonio, Texas 78230, acts as the Portfolio's
registrar, transfer agent and dividend-disbursing agent for a fee based upon the
number of account holders for each of the Class A, Class B, Class C, Class R,
Class K, Class I and Advisor Class shares of the Portfolio. The transfer agency
fee with respect to the Class B shares and Class C shares is higher than the
transfer agency fee with respect to the Class A shares and Advisor Class shares.
For the fiscal year ended September 30, 2004, the Portfolio paid AGIS $1,081,581
for transfer agency services.

          AGIS acts as the transfer agent for the Fund. AGIS registers the
transfer, issuance and redemption of Portfolio shares and disburses dividends
and other distributions to Portfolio shareholders.

          Many Portfolio shares are owned by selected brokers or selected agents
(as defined below), financial intermediaries or other financial representatives
("financial intermediaries") for the benefit of their customers. In those cases,
the Fund often does not maintain an account for you. Thus, some or all of the
transfer agency functions for these accounts are performed by the financial
intermediaries. The Portfolio, ABIRM and/or Alliance pay to these financial
intermediaries, including those that sell shares of the AllianceBernstein Mutual
Funds, fees for sub-transfer agency and related recordkeeping services in
amounts ranging up to $19 per customer fund account per annum. Retirement plans
may also hold Portfolio shares in the name of the plan, rather than the
participant. Plan recordkeepers, who may have affiliated financial
intermediaries who sell shares of the Portfolio, may be paid for each plan
participant fund account in amounts up to $19 per account per annum and/or up to
0.20% per annum of the average daily assets held in the plan. To the extent any
of these payments for recordkeeping services, transfer agency services or
retirement plan accounts are made by the Portfolio, they are included in your
Prospectus in the Portfolio expense tables under "Fees and Expenses of the
Funds." In addition, financial intermediaries may be affiliates of entities that
receive compensation from Alliance or ABIRM for maintaining retirement plan
"platforms" that facilitate trading by affiliated and non-affiliated financial
intermediaries and recordkeeping for retirement plans.

          Because financial intermediaries and plan recordkeepers may be paid
varying amounts per class for sub-transfer agency and related recordkeeping
services, the service requirements of which may also vary by class, this may
create an additional incentive for financial intermediaries and their financial
advisors to favor one fund complex over another or one class of shares over
another.

Code of Ethics and Proxy Voting Policies and Procedures
- -------------------------------------------------------

          The Fund, the Investment Adviser and the Principal Underwriter have
each adopted codes of ethics pursuant to Rule 17j-1 of the 1940 Act. These codes
of ethics permit personnel subject to the codes to invest in securities,
including securities that may be purchased or held by the Fund.

          The Fund has adopted the Investment Adviser's proxy voting policies
and procedures. The Investment Adviser's proxy voting policies and procedures
are attached as Appendix A.

          Information regarding how the Fund voted proxies related to portfolio
securities during the most recent 12-month period ended June 30 is available (1)
without charge, upon request, by calling (800) 227-4618; or on or through the
Fund's website at www.AllianceBernstein.com; or both; and (2) on the
Commission's website at www.sec.gov.

- ------------------------------------------------------------------------------

                               PURCHASE OF SHARES
- ------------------------------------------------------------------------------

          The following information supplements that set forth in your
Prospectus under the heading "Investing in the Funds."

General
- -------

          Shares of the Portfolio are offered on a continuous basis at a price
equal to their NAV plus an initial sales charge at the time of purchase ("Class
A shares"), with a CDSC ("Class B shares"), without any initial sales charge
and, as long as the shares are held for one year or more, without any CDSC
("Class C shares"), to group retirement plans, as defined below, eligible to
purchase Class R shares, without any initial sales charge or CDSC ("Class R
shares"), to group retirement plans eligible to purchase Class K shares, without
any initial sales charge or CDSC ("Class K shares"), to group retirement plans
and certain investment advisory clients of, and certain other persons associated
with, Alliance and its affiliates eligible to purchase Class I shares, without
any initial sales charge or CDSC ("Class I shares"), or to investors eligible to
purchase Advisor Class shares, without any initial sales charge or CDSC
("Advisor Class shares"), in each case as described below. "Group retirement
plans" are defined as 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans where plan level or omnibus accounts
are held on the books of the Portfolio. All of the classes of shares of the
Portfolio, except the Class I and Advisor Class shares, are subject to Rule
12b-1 asset-based sales charges. Shares of the Portfolio that are offered
subject to a sales charge are offered through (i) investment dealers that are
members of NASD and have entered into selected dealer agreements with the
Principal Underwriter ("selected dealers"), (ii) depository institutions and
other financial intermediaries or their affiliates, that have entered into
selected agent agreements with the Principal Underwriter ("selected agents"), or
(iii) the Principal Underwriter.

          Investors may purchase shares of the Fund either through financial
intermediaries or directly through the Principal Underwriter. A transaction,
service, administrative or other similar fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of shares made
through the financial intermediary. Such financial intermediary may also impose
requirements with respect to the purchase, sale or exchange of shares that are
different from, or in addition to, those imposed by the Fund, including
requirements as to the classes of shares available through that financial
intermediary and the minimum initial and subsequent investment amounts. The
Portfolio is not responsible for, and has no control over, the decision of any
financial intermediary to impose such differing requirements. Sales personnel of
selected dealers and agents distributing the Fund's shares may receive differing
compensation for selling different classes of shares.

          In order to open your account, the Portfolio or your financial
intermediary, is required to obtain certain information from you for
identification purposes. This information may include name, date of birth,
permanent residential address and social security/taxpayer identification
number. It will not be possible to establish your account without this
information. If the Portfolio or your financial intermediary is unable to verify
the information provided, your account may be closed and other appropriate
action may be taken as permitted by law.

          The Fund's Board of Directors has adopted policies and procedures
designed to detect and deter frequent purchases and redemptions of Portfolio
shares or excessive or short-term trading that may disadvantage long-term
Portfolio shareholders. These policies are described below. The Fund reserves
the right to restrict, reject or cancel, without any prior notice, any purchase
or exchange order for any reason, including any purchase or exchange order
accepted by any shareholder's financial intermediary.

          Risks Associated With Excessive Or Short-term Trading Generally. While
the Fund will try to prevent market timing by utilizing the procedures described
below, these procedures may not be successful in identifying or stopping
excessive or short-term trading in all circumstances. By realizing profits
through short-term trading, shareholders that engage in rapid purchases and
sales or exchanges of the Portfolio's shares dilute the value of shares held by
long-term shareholders. Volatility resulting from excessive purchases and sales
or exchanges of Portfolio shares, especially involving large dollar amounts, may
disrupt efficient portfolio management. In particular, the Portfolio may have
difficulty implementing its long-term investment strategies if it is forced to
maintain a higher level of its assets in cash to accommodate significant
short-term trading activity. Excessive purchases and sales or exchanges of the
Portfolio's shares may force the Portfolio to sell portfolio securities at
inopportune times to raise cash to accommodate short-term trading activity. In
addition, the Portfolio may incur increased expenses if one or more shareholders
engage in excessive or short-term trading. For example, the Portfolio may be
forced to liquidate investments as a result of short-term trading and incur
increased brokerage costs and realization of taxable capital gains without
attaining any investment advantage. Similarly, the Portfolio may bear increased
administrative costs due to asset level and investment volatility that
accompanies patterns of short-term trading activity. All of these factors may
adversely affect Portfolio performance.

          Significant investments in foreign securities may be particularly
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time the Portfolio
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a shareholder engaging in a short-term trading strategy
to exploit differences in Portfolio share prices that are based on closing
prices of foreign securities established some time before the Portfolio
calculates its own share price (referred to as "time zone arbitrage"). The Fund
has procedures, referred to as fair value pricing, designed to adjust closing
market prices of foreign securities to reflect what is believed to be the fair
value of those securities at the time the Portfolio calculates its NAV. While
there is no assurance, the Fund expects that the use of fair value pricing, in
addition to the short-term trading policies discussed below, will significantly
reduce a shareholder's ability to engage in time zone arbitrage to the detriment
of other Portfolio shareholders.

          Investments in other types of securities may also be susceptible to
short-term trading strategies. These investments include securities that are,
among other things, thinly traded, traded infrequently, or relatively illiquid,
which have the risk that the current market price for the securities may not
accurately reflect current market values. A shareholder may seek to engage in
short-term trading to take advantage of these pricing differences (referred to
as "price arbitrage"). Investments in certain fixed-income securities, such as
high yield bonds, asset-backed securities, or municipal bonds may be adversely
affected by price arbitrage trading strategies.

          Policy Regarding Short-term Trading. Purchases and exchanges of shares
of the Portfolio should be made for investment purposes only. The Fund seeks to
prevent patterns of excessive purchases and sales or exchanges of Portfolio
shares. The Fund will seek to prevent such practices to the extent they are
detected by the procedures described below. The Fund reserves the right to
modify this policy, including any surveillance or account blocking procedures
established from time to time to effectuate this policy, at any time without
notice.

     o    Transaction Surveillance Procedures. The Fund, through its agents,
          ABIRM and AGIS, maintains surveillance procedures to detect excessive
          or short-term trading in Portfolio shares. This surveillance process
          involves several factors, which include scrutinizing transactions in
          Portfolio shares that exceed certain monetary thresholds or numerical
          limits within a specified period of time. Generally, more than two
          exchanges of Portfolio shares during any 90-day period or purchases of
          shares followed by a sale within 90 days will be identified by these
          surveillance procedures. For purposes of these transaction
          surveillance procedures, the Fund may consider trading activity in
          multiple accounts under common ownership, control, or influence.
          Trading activity identified by either, or a combination, of these
          factors, or as a result of any other information available at the
          time, will be evaluated to determine whether such activity might
          constitute excessive or short-term trading. These surveillance
          procedures may be modified from time to time, as necessary or
          appropriate to improve the detection of excessive or short-term
          trading or to address specific circumstances, such as for certain
          retirement plans, to conform to plan exchange limits or U.S.
          Department of Labor regulations, or for certain automated or
          pre-established exchange, asset allocation or dollar cost averaging
          programs, or omnibus account arrangements.

     o    Account Blocking Procedures. If the Fund determines, in its sole
          discretion, that a particular transaction or pattern of transactions
          identified by the transaction surveillance procedures described above
          is excessive or short-term trading in nature, the relevant Portfolio
          account(s) will be immediately "blocked" and no future purchase or
          exchange activity will be permitted. However, sales of Portfolio
          shares back to the Portfolio or redemptions will continue to be
          permitted in accordance with the terms of the Portfolio's current
          Prospectuses. In the event an account is blocked, certain
          account-related privileges, such as the ability to place purchase,
          sale and exchange orders over the internet or by phone, may also be
          suspended. A blocked account will generally remain blocked unless and
          until the account holder or the associated financial intermediary
          provides evidence or assurance acceptable to the Fund that the account
          holder did not or will not in the future engage in excessive or
          short-term trading.

     o    Applications of Surveillance Procedures and Restrictions to Omnibus
          Accounts. Omnibus account arrangements are common forms of holding
          shares of the Portfolio, particularly among certain financial
          intermediaries, including sponsors of retirement plans and variable
          insurance products. The Fund seeks to apply its surveillance
          procedures to these omnibus account arrangements. If a financial
          intermediary does not have the capabilities, or declines, to provide
          individual account level detail to the Fund, the Fund will monitor
          turnover of assets to purchases and redemptions of the omnibus
          account. If excessive turnover, defined as annualized purchases and
          redemptions exceeding 50% of assets is detected, the Fund will notify
          the financial intermediary and request that the financial intermediary
          review individual account transactions for excessive or short-term
          trading activity and confirm to the Fund that appropriate action has
          been taken to curtail the activity, which may include applying blocks
          to accounts to prohibit future purchases and exchanges of Portfolio
          shares. For certain retirement plan accounts, the Fund may request
          that the retirement plan or other intermediary revoke the relevant
          participant's privilege to effect transactions in Portfolio shares via
          the internet or telephone, in which case the relevant participant must
          submit future transaction orders via the U.S. Postal Service (i.e.,
          regular mail). The Fund will continue to monitor the turnover
          attributable to a financial intermediary's omnibus account arrangement
          and may consider whether to terminate the relationship if the
          intermediary does not demonstrate that appropriate action has been
          taken.

          Risks to Shareholders Resulting From Imposition of Account Blocks in
Response to Excessive Short-term Trading Activity. A shareholder identified as
having engaged in excessive or short-term trading activity whose account is
"blocked" and who may not otherwise wish to redeem his or her shares effectively
may be "locked" into an investment in the Portfolio that the shareholder did not
intend to hold on a long-term basis or that may not be appropriate for the
shareholder's risk profile. To rectify this situation, a shareholder with a
"blocked" account may be forced to redeem Portfolio shares, which could be
costly if, for example, these shares have declined in value, the shareholder
recently paid a front-end sales charge or the shares are subject to a CDSC, or
the sale results in adverse tax consequences to the shareholder. To avoid this
risk, a shareholder should carefully monitor the purchases, sales, and exchanges
of Portfolio shares and avoid frequent trading in Portfolio shares.

          Limitations on Ability to Detect and Curtail Excessive Trading
Practices. Shareholders seeking to engage in excessive short-term trading
activities may deploy a variety of strategies to avoid detection and, despite
the efforts of the Fund and its agents to detect excessive or short duration
trading in Portfolio shares, there is no guarantee that the Fund will be able to
identify these shareholders or curtail their trading practices. In particular,
the Fund may not be able to detect excessive or short-term trading in Portfolio
shares attributable to a particular investor who effects purchase and/or
exchange activity in Portfolio shares through omnibus accounts. Also, multiple
tiers of these entities may exist, each utilizing an omnibus account
arrangement, which may further compound the difficulty of detecting excessive or
short duration trading activity in Portfolio shares.

          The Portfolio 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. If the Portfolio suspends the sale of its shares, shareholders will not
be able to acquire its shares, including through an exchange.

          The public offering price of shares of the Portfolio is their NAV,
plus, in the case of Class A shares, a sales charge. On each Fund business day
on which a purchase or redemption order is received by the Portfolio and trading
in the types of securities in which the Portfolio invests might materially
affect the value of Portfolio shares, the NAV is computed as of the next close
of regular trading on the Exchange (currently 4:00 p.m., Eastern time) by
dividing the value of the Portfolio's total assets, less its liabilities, by the
total number of its shares then outstanding. A Fund business day is any day on
which the Exchange is open for trading.

          The respective NAVs of the various classes of shares of the Portfolio
are expected to be substantially the same. However, the NAVs of the Class B,
Class C and Class R, shares will generally be slightly lower than the NAVs of
the Class A, Class K, Class I and Advisor Class shares as a result of the
differential daily expense accruals of the higher distribution and, in some
cases, transfer agency fees applicable with respect to those classes of shares.

          The Portfolio will accept unconditional orders for shares to be
executed at the public offering price equal to their NAV 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 NAV 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
financial intermediaries, the applicable public offering price will be the NAV
as so determined, but only if the financial intermediary receives the order
prior to the close of regular trading on the Exchange. The financial
intermediary is responsible for transmitting such orders by a prescribed time to
the Portfolio or its transfer agent. If the financial intermediary fails to do
so, the investor will not receive that day's NAV. If the financial intermediary
receives the order after the close of regular trading on the Exchange, the price
received by the investor will be based on the NAV 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 Portfolio 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 "For Literature" telephone number
shown on the cover of this SAI. Except with respect to certain omnibus accounts,
telephone purchase orders with payment by electronic funds transfer may not
exceed $500,000. Payment for shares purchased by telephone can be made only by
electronic funds transfer from a bank account maintained by the shareholder at a
bank that is a member of the National Automated Clearing House Association
("NACHA"). Telephone purchase requests must be received before 4:00 p.m.,
Eastern time, on a Fund business day to receive that day's public offering
price. Telephone purchase requests received after 4:00 p.m., Eastern time, are
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 shareholder's account in
the amount of his or her subscription. As a convenience, and to avoid
unnecessary expense to the Fund, stock certificates representing shares of the
Portfolio are not issued except upon written request to the Portfolio by the
shareholder or his or her authorized financial intermediary. 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 Portfolio.

          Each class of shares of the Portfolio represents an interest in the
same portfolio of investments of the Portfolio, 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 CDSC, when applicable) and Class B and Class C
shares bear the expense of the CDSC, (ii) Class B shares, Class C shares and
Class R shares each bear the expense of a higher distribution services fee than
that borne by Class A shares and Class K shares, and Class I shares and Advisor
Class shares do not bear such a fee, (iii) Class B and Class C shares bear
higher transfer agency costs than that borne by Class A, Class R, Class K, Class
I and Advisor Class shares, (iv) Class B and Advisor Class shares are subject to
a conversion feature and will convert to Class A shares under certain
circumstances, and (v) each of Class A, Class B, Class C, Class R and Class K
shares has exclusive voting rights with respect to provisions of the Rule 12b-1
Plan pursuant to which its distribution services fee is paid and other matters
for which separate class voting is appropriate under applicable law, provided
that, if the Portfolio submits to a vote of the Class A shareholders, an
amendment to the Rule 12b-1 Plan that would materially increase the amount to be
paid thereunder with respect to the Class A shares, then such amendment will
also be submitted to the Class B and Advisor Class shareholders because the
Class B and Advisor Class shares convert to Class A shares under certain
circumstances and the Class A, the Class B and the Advisor Class shareholders
will vote separately by class. Each class has different exchange privileges and
certain different shareholder service options available.

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

Alternative Purchase Arrangements
- ---------------------------------

          Classes A, B and C Shares. Class A, Class B and Class C shares have
the following alternative purchase arrangements: Class A shares are generally
offered with an initial sales charge, Class B shares are generally offered with
a CDSC and Class C shares are sold to investors choosing the asset-based sales
charge alternative. Special purchase arrangements are available for Group
Retirement Plans. See "Alternative Purchase Arrangements-Group Retirement Plans"
below. These alternative purchase arrangements permit an investor to choose the
method of purchasing shares that is most beneficial given the amount of the
purchase, the length of time the investor expects to hold the shares, and other
circumstances. Investors should consider whether, during the anticipated life of
their investment in the Portfolio, the accumulated distribution services fee and
CDSCs on Class B shares prior to conversion, or the accumulated distribution
services fee and CDSCs 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 group retirement
plans) for more than $100,000 for Class B shares (see "Alternative Purchase
Arrangements - Group Retirement Plans"). Class C shares will normally not be
suitable for the investor who qualifies to purchase Class A shares at NAV. For
this reason, the Principal Underwriter will reject any order for more than
$1,000,000 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 being subject to a CDSC for a three-year and one-year
period, respectively. 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 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 NAV 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 Portfolio shares for the three-year period
during which Class B shares are subject to a CDSC may find it more advantageous
to purchase Class C shares.

          During the Fund's fiscal year ended September 30, 2004, the fiscal
period ended September 30, 2003, and fiscal years ended June 30, 2003 and 2002,
the aggregate amount of underwriting commission payable with respect to shares
of the Portfolio in each year was $426,533, $140,094, $579,184 and $3,529,662,
respectively. Of that amount, the Principal Underwriter received amounts of
$21,917, $8,003, $29,192 and $160,090, respectively, representing that portion
of the sales charges paid on shares of the Portfolio sold during the year which
was not reallowed to selected dealers (and was, accordingly, retained by the
Principal Underwriter). During the Fund's fiscal year ended September 30, 2004,
the fiscal period ended September 30, 2003, and fiscal years ended June 30, 2003
and 2002, the Principal Underwriter received CDSCs of $13,383, $3,000, $9,048
and $35,701, respectively, on Class A shares, $26,815, $148,768, $598,146 and
$610,418, respectively, on Class B shares, and $13,910, $5,678, $46,997 and
$49,144, respectively, on Class C shares.

Class A Shares
- --------------

          The public offering price of Class A shares is the NAV plus a sales
charge, as set forth below.

                                  Sales Charge
                                  ------------

                                                               Discount or
                                                               Commission to
                                                               Dealers or
                                 As % of      As % of          Agents of
                                 Net Amount   the Public       up to % of
Amount of Purchase               Invested     Offering Price   Offering Price
- ------------------               ----------   --------------   --------------
Up to $100,000.................   4.44%         4.25%              4.00%
$100,000 up to $250,000........   3.36          3.25               3.00
$250,000 up to $500,000........   2.30          2.25               2.00
$500,000 up to $1,000,000*.....   1.78          1.75               1.50
- -------------------
* There is no initial sales charge on transactions of $1,000,000 or more.

          All or a portion of the initial sales charge may be paid to your
financial representative. With respect to purchases of $1,000,000 or more, Class
A shares redeemed within one year of purchase may be subject to a CDSC of up to
1%. The CDSC on Class A shares will be waived on certain redemptions, as
described below under "-- Contingent Deferred Sales Charge."

          No initial sales charge is imposed on Class A shares issued (i)
pursuant to the automatic reinvestment of income dividends or capital gains
distributions, (ii) in exchange for Class A shares of other AllianceBernstein
Mutual Funds (as that term is defined under "Combined Purchase Privilege"
below), except that an initial sales charge will be imposed on Class A shares
issued in exchange for Class A shares of AllianceBernstein Exchange Reserves
that were purchased for cash without the payment of an initial sales charge and
without being subject to a CDSC, or (iii) upon the automatic conversion of Class
B shares or Advisor Class shares as described below under "--Class B
Shares--Conversion Feature" and "--Conversion of Advisor Class Shares to Class A
Shares." The Portfolio receives the entire NAV of its Class A shares sold to
investors. The Principal Underwriter's commission is the sales charge shown
above less any applicable discount or commission "reallowed" to selected dealers
and agents. The Principal Underwriter will reallow discounts to selected dealers
and agents in the amounts indicated in the table above. In this regard, the
Principal Underwriter may elect to reallow the entire sales charge to selected
dealers and agents for all sales with respect to which orders are placed with
the Principal Underwriter. A selected dealer who receives reallowance in excess
of 90% of such a sales charge may be deemed to be an "underwriter" under the
Securities Act.

          In addition to the circumstances described above, certain types of
investors may be entitled to pay no initial sales charge in certain
circumstances described below.

          Class A Shares - Sales at NAV. The Portfolio may sell its Class A
shares at NAV (i.e., without any initial sales charge) to certain categories of
investors including:

     (i)  investment management clients of the Investment Adviser or its
          affiliates, including clients and prospective clients of the
          Investment Adviser's AllianceBernstein Institutional Management
          division;

     (ii) officers and present or former Directors of the Fund or other
          investment companies managed by the Investment Adviser, officers,
          directors and present or retired full-time employees and former
          employees (for subsequent investment in accounts established during
          the course of their employment) of the Investment Adviser, the
          Principal Underwriter, AGIS and their affiliates; officers, directors
          and present and full-time employees of selected dealers or agents; or
          the spouse, sibling, direct ancestor or direct descendant
          (collectively "relatives") of any such person; or any trust,
          individual retirement account or retirement plan account for the
          benefit of any such person;

     (iii) the Investment Adviser, Principal Underwriter, AGIS and their
          affiliates; certain employee benefit plans for employees of the
          Investment Adviser, the Principal Underwriter, AGIS and their
          affiliates;

     (iv) persons participating in a fee-based program, sponsored and maintained
          by a registered broker-dealer or other financial intermediary and
          approved by the Principal Underwriter, under which such persons pay an
          asset-based fee for service in the nature of investment advisory or
          administrative services; and

     (v)  certain retirement plan accounts as described under "Alternative
          Purchase Arrangements - Group Retirement Plans."

Class B Shares
- --------------

          Investors may purchase Class B shares at the public offering price
equal to the NAV per share of the Class B shares on the date of purchase without
the imposition of a sales charge at the time of purchase. The Class B shares are
sold without an initial sales charge so that the Portfolio will receive the full
amount of the investor's purchase payment.

          Conversion Feature. Six years after the end of the calendar month in
which the shareholder's purchase order was accepted, Class B shares will
automatically convert to Class A shares and will no longer be subject to a
higher distribution services fee. Such conversion will occur on the basis of the
relative NAVs 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 the shares.

          For purposes of conversion to Class A, Class B shares purchased
through the reinvestment of dividends and distributions paid in respect of Class
B shares in a shareholder's account will be considered to be held in a separate
sub-account. Each time any Class B shares in the shareholder's account (other
than those in the sub-account) convert to Class A, an equal pro-rata portion of
the Class B shares in the sub-account will also convert to Class A.

          The conversion of Class B shares to Class A shares is subject to the
continuing availability of an opinion of counsel to the effect that the
conversion of Class B shares to Class A shares does not constitute a taxable
event under federal income tax law. The conversion of Class B shares to Class A
shares may be suspended if such an opinion is no longer available at the time
such conversion is to occur. In that event, no further conversions of Class B
shares would occur, and shares might continue to be subject to the higher
distribution services fee for an indefinite period which may extend beyond the
period ending six years after the end of the calendar month in which the
shareholder's purchase order was accepted.

Class C Shares
- --------------

          Investors may purchase Class C shares at the public offering price
equal to the NAV per share of the Class C shares on the date of purchase without
the imposition of a sales charge either at the time of purchase or, as long as
the shares are held for one year or more, upon redemption. Class C shares are
sold without an initial sales charge so that the Portfolio will receive the full
amount of the investor's purchase payment and, as long as the shares are held
for one year or more, without a CDSC so that the investor will receive as
proceeds upon redemption the entire NAV of his or her Class C shares. The Class
C distribution services fee enables the Portfolio to sell Class C shares without
either an initial sales charge or CDSC, as long as the shares are held for one
year or more. Class C shares do not convert to any other class of shares of the
Portfolio 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.

          Contingent Deferred Sales Charge. Class B shares that are redeemed
within three years of purchase will be subject to a CDSC at the rates set forth
below charged as a percentage of the dollar amount subject thereto. Class A
share purchases of $1,000,000 or more and Class C shares that are redeemed
within one year of purchase will be subject to a CDSC of 1%. The charge will be
assessed on an amount equal to the lesser of the cost of the shares being
redeemed or their NAV at the time of redemption. Accordingly, no sales charge
will be imposed on increases in NAV 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
NAV 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
NAV of $2 per share. Therefore, $400 of the $600 redemption proceeds will be
charged at a rate of 2.0% (the applicable rate in the second year after purchase
as set forth below).

          For Class B shares, the amount of the CDSC, 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.

                                       Contingent Deferred Sales Charge
                                      for the Portfolio as a % of Dollar
              Year Since Purchase          Amount Subject to Charge
              -------------------          ------------------------
              First                             3.0%
              Second                            2.0%
              Third                             1.0%
              Thereafter                        None

          In determining the CDSC applicable to a redemption of Class B and
Class C shares, it will be assumed that the redemption is, first, of any shares
that are not subject to a CDSC (for example, because the shares were acquired
upon the reinvestment of dividends or distributions) and, second, of shares held
longest during the time they are subject to the sales charge. When shares
acquired in an exchange are redeemed, the applicable CDSC and conversion
schedules will be the schedules that applied at the time of the purchase of
shares of the corresponding class of the AllianceBernstein Mutual Fund
originally purchased by the shareholder.

          Proceeds from the CDSC 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 Portfolio
in connection with the sale of shares, such as the payment of compensation to
selected dealers and agents for selling Portfolio shares. The combination of the
CDSC and the distribution services fee enables the Portfolio to sell the shares
without a sales charge being deducted at the time of purchase.

          The CDSC is waived on redemptions of shares (i) following the death or
disability, as defined in 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 that has attained
the age of 70-1/2, (iii) that had been purchased by present or former Directors
of the Fund, by the relative of any such person, by any trust, individual
retirement account or retirement plan account for the benefit of any such person
or relative, or by the estate of any such person or relative, (iv) pursuant to,
and in accordance with, a systematic withdrawal plan (see "Sales Charge
Reduction Programs -- Systematic Withdrawal Plan" below), (v) to the extent that
the redemption is necessary to meet a plan participant's or beneficiary's
request for a distribution or loan from a group retirement plan or to
accommodate a plan participant's or beneficiary's direction to reallocate his or
her plan account among other investment alternatives available under a group
retirement plan, (vi) for Class C shares, sold through programs offered by
financial intermediaries and approved by ABIRM where such programs offer only
shares which are not subject to a CDSC, where the financial intermediary
establishes a single omnibus account for the Portfolio, and where no advance
commission is paid to any financial intermediary in connection with the purchase
of such shares or (vii) for permitted exchanges of shares.

Class R Shares
- --------------

          Class R shares are offered only to group retirement plans that have
plan assets of up to $10 million. Class R shares are not available to retail
non-retirement accounts, traditional or Roth IRAs, Coverdell Education Savings
Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b) plans and to
AllianceBernstein sponsored retirement products. Class R shares incur a .50%
distribution services fee and thus have a higher expense ratio than Class A
shares, Class K shares and Class I shares and pay correspondingly lower
dividends than Class A shares, Class K shares and Class I shares.

Class K Shares
- --------------

          Class K shares are available at NAV to group retirement plans that
have plan assets of at least $1 million. Class K shares generally are not
available to retail non-retirement accounts, traditional and ROTH IRAs,
Coverdell Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual
403(b) plans and AllianceBernstein sponsored retirement products. Class K shares
do not have an initial sales charge or CDSC but incur a .25% distribution
services fee and thus (i) have a lower expense ratio than Class R shares and pay
correspondingly higher dividends than Class R shares and (ii) have a higher
expense ratio than Class I shares and pay correspondingly lower dividends than
Class I shares.

Class I Shares
- --------------

          Class I shares are available at NAV to all group retirement plans that
have plan assets in excess of $10 million and to certain investment advisory
clients of, and certain other persons associated with, Alliance and its
affiliates. Class I shares generally are not available to retail non-retirement
accounts, traditional and ROTH IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, individual 403(b) plans and AllianceBernstein sponsored
retirement products. Class I shares do not incur any distribution services fees
and will thus have a lower expense ratio and pay correspondingly higher
dividends than Class R and Class K shares.

Advisor Class Shares
- --------------------

          Advisor Class shares of the Portfolio may be purchased and held solely
(i) through accounts established under fee-based programs, sponsored and
maintained by registered broker-dealers or other financial intermediaries and
approved by the Principal Underwriter, (ii) through self-directed defined
contribution employee benefit plans (e.g., 401(k) plans) that have at least $10
million in assets and are purchased directly by the plan without the involvement
of a financial intermediary, (iii) by the categories of investors described in
clauses (i) through (iv) under "Class A shares -- Sales at NAV" (other than
officers, directors and present and full-time employees of selected dealers or
agents, or relatives of such person, or any trust, individual retirement account
or retirement plan account for the benefit of such relative, none of whom is
eligible on the basis solely of such status to purchase and hold Advisor Class
shares), or (iv) by directors and present or retired full-time employees of CB
Richard Ellis, Inc. Generally, a fee-based program must charge an asset-based or
other similar fee and must invest at least $250,000 in Advisor Class shares of
the Portfolio in order to be approved by the Principal Underwriter for
investment in Advisor Class shares. A transaction fee may be charged by your
financial intermediary with respect to the purchase, sale or exchange of Advisor
Class shares made through such financial intermediary. Advisor Class shares do
not incur any distribution services fees and will thus have a lower expense
ratio and pay correspondingly higher dividends than Class A, Class B, Class C,
Class R, or Class K shares.

Conversion of Advisor Class Shares to Class A Shares
- ----------------------------------------------------

          Advisor Class shares may be held solely through the fee-based program
accounts, employee benefit plans, qualified state tuition programs and
registered investment advisory or other financial intermediary relationships
described above under "Purchase of Shares--Advisor Class Shares," and by
investment advisory clients of, and certain other persons associated with, the
Investment Adviser and its affiliates or the Fund. If (i) a holder of Advisor
Class shares ceases to participate in the fee-based program or plan, that
satisfies the requirements to purchase shares set forth under "Purchase of
Shares -- Advisor Class Shares" or (ii) the holder is otherwise no longer
eligible to purchase Advisor Class shares as described in your Prospectus and
this SAI (each, a "Conversion Event"), then all Advisor Class shares held by the
shareholder will convert automatically to Class A shares of the Portfolio during
the calendar month following the month in which the Portfolio is informed of the
occurrence of the Conversion Event. The Portfolio will provide the shareholder
with at least 30 days' notice of the conversion. The failure of a shareholder or
a fee-based program to satisfy the minimum investment requirements to purchase
Advisor Class shares will not constitute a Conversion Event. The conversion
would occur on the basis of the relative NAVs of the two classes and without the
imposition of any sales load, fee or other charge. Class A shares currently bear
a .30% distribution services fee. Advisor Class shares do not have any
distribution services fee. As a result, Class A shares have a higher expense
ratio and may pay correspondingly lower dividends and have a lower NAV than
Advisor Class shares.

          The conversion of Advisor Class shares to Class A shares is subject to
the continuing availability of an opinion of counsel to the effect that the
conversion of Advisor Class shares to Class A shares does not constitute a
taxable event under federal income tax law. The conversion of Advisor Class
shares to Class A shares may be suspended if such an opinion is no longer
available at the time such conversion is to occur. In that event, the Advisor
Class shareholder would be required to redeem his or her Advisor Class shares,
which would constitute a taxable event under federal income tax law.

Alternative Purchase Arrangements - Group Retirement Plans
- ----------------------------------------------------------

          The Portfolio offers special distribution arrangements for group
retirement plans. However, plan sponsors, plan fiduciaries and other financial
intermediaries may establish requirements as to the purchase, sale or exchange
of shares of the Portfolio, including maximum and minimum initial investment
requirements, that are different from those described in this SAI. Group
retirement plans also may not offer all classes of shares of the Portfolio. In
order to enable participants investing through group retirement plans to
purchase shares of the Portfolio, the maximum and minimum investment amounts may
be different for shares purchased through group retirement plans from those
described herein. In addition, the Class A, Class B and Class C CDSCs may be
waived for investments made through certain group retirement plans. Therefore,
plan sponsors or fiduciaries may not adhere to these share class eligibility
standards as set forth in the Prospectuses and this SAI. The Portfolio is not
responsible for, and has no control over, the decision of any plan sponsor or
fiduciary to impose such differing requirements.

Class A Shares
- --------------

          Class A shares are available at NAV to all AllianceBernstein sponsored
group retirement plans, regardless of size, and to the AllianceBernstein Link,
AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans with
at least $250,000 in plan assets or 100 or more employees. ABIRM measures the
asset levels and number of employees in these plans once monthly. Therefore, if
a plan that is not initially eligible for Class A shares meets the asset level
or number of employees required for Class A eligibility, ABIRM may not initially
fill orders with Class A shares if an order is received prior to its monthly
measurement of assets and employees. If the plan terminates the Portfolio as an
investment option within one year, then all plan purchases of Class A shares
will be subject to a 1%, 1-year CDSC on redemption.

          Class A shares are also available at NAV to group retirement plans
with plan assets in excess of $10 million. The 1%, 1-year CDSC also generally
applies. However, the 1%, 1-year CDSC may be waived if the financial
intermediary agrees to waive all commissions or other compensation paid in
connection with the sale of such shares (typically up to a 1% advance payment
for sales of Class A sales at NAV) other than the service fee paid pursuant to
the Portfolio's distribution service plan.

Class B Shares
- --------------

          Class B shares are generally not available for purchase by group
retirement plans. However, Class B shares may continue to be purchased by group
retirement plans that have already selected Class B shares as an investment
alternative under their plan prior to September 2, 2003.

Class C Shares
- --------------

          Class C shares are available to AllianceBernstein Link,
AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans with
less than $250,000 in plan assets and less than 100 employees. Class C shares
are also available to group retirement plans with plan assets of less than $1
million. If an AllianceBernstein Link, AllianceBernstein Individual 401(k) or
AllianceBernstein SIMPLE IRA plan holding Class C shares becomes eligible to
purchase Class A shares at NAV, the plan sponsor or other appropriate fiduciary
of such plan may request ABIRM in writing to liquidate the Class C shares and
purchase Class A shares with the liquidation proceeds. Any such liquidation and
repurchase may not occur before the expiration of the 1-year period that begins
on the date of the plan's last purchase of Class C shares.

Class R Shares
- --------------

          Class R shares are available to certain group retirement plans with
plan assets of up to $10 million. Class R shares are not subject to a front-end
sales charge or CDSC, but are subject to a .50% distribution fee.

Class K Shares
- --------------

          Class K shares are available to certain group retirement plans with
plan assets of at least $1 million. Class K shares are not subject to a
front-end sales charge or CDSC, but are subject to a .25% distribution fee.

Class I Shares
- --------------

          Class I shares are available to certain group retirement plans with
plan assets of at least $10 million. Class I shares are not subject to a
front-end sales charge, CDSC or a distribution fee.

Choosing a Class of Shares for Group Retirement Plans
- -----------------------------------------------------

          Plan sponsors, plan fiduciaries and other financial intermediaries may
establish requirements as to the purchase, sale or exchange of shares of the
Portfolio, including maximum and minimum initial investment requirements, that
are different from those described in this SAI. Plan fiduciaries should consider
how these requirements differ from the Portfolio's share class eligibility
criteria before determining whether to invest.

          It is expected that the Portfolio will eventually offer only Class R,
Class K and Class I shares to group retirement plans. Currently, the Portfolio
also makes its Class A shares available at NAV to group retirement plans with
plan assets in excess of $10 million. Unless waived under the circumstances
described above, a 1%, 1-year CDSC applies to the sale of Class A shares by a
plan. Because Class K shares have no CDSC and lower 12b-1 distribution fees and
Class I shares have no CDSC and Rule 12b-1 distribution fees, plans should
consider purchasing Class K or Class I shares, if eligible, rather than Class A
shares.

          In selecting among the Class A, Class K and Class R shares, plans
purchasing shares through a financial intermediary that is not willing to waive
advance commission payments (and therefore are not eligible for the waiver of
the 1%, 1-year CDSC applicable to Class A shares) should weigh the following:

     o    the lower Rule 12b-1 distribution fees (0.30%) and the 1%, 1-year CDSC
          with respect to Class A shares;

     o    the higher Rule 12b-1 distribution fees (0.50%) and the absence of a
          CDSC with respect to Class R shares; and

     o    the lower Rule 12b-1 distribution fees (0.25%) and the absence of a
          CDSC with respect to Class K shares.

          Because Class A and Class K shares have lower Rule 12b-1 distribution
fees than Class R shares, plans should consider purchasing Class A or Class K
shares, if eligible, rather than Class R shares.

          As described above, while Class B shares are generally not available
to group retirement plans, Class B shares are available for continuing
contributions from plans that have already selected Class B shares as an
investment option under their plans prior to September 2, 2003. Plans should
weigh the fact that Class B shares will convert to Class A shares after a period
of time against the fact that Class A, Class R, Class K and Class I shares have
lower expenses, and therefore higher returns, than Class B shares, before
determining which class to make available to its plan participants.

Sales Charge Reduction Programs
- -------------------------------

          The AllianceBernstein Mutual Funds offer shareholders various programs
through which shareholders may obtain reduced sales charges or reductions in
CDSC through participation in such programs. In order for shareholders to take
advantage of the reductions available through the combined purchase privilege,
rights of accumulation and letters of intent, the Portfolio must be notified by
the shareholder or his or her financial intermediary that they qualify for such
a reduction. If the Portfolio is not notified that a shareholder is eligible for
these reductions, the Portfolio will be unable to ensure that the reduction is
applied to the shareholder's account.

          Combined Purchase Privilege. Shareholders may qualify for the sales
charge reductions by combining purchases of shares of the Portfolio into a
single "purchase." By combining such purchases, shareholders may be able to take
advantage of the quantity discounts described under "Alternative Purchase
Arrangements - Class A Shares." A "purchase" means a single purchase or
concurrent purchases of shares of the Portfolio or any other AllianceBernstein
Mutual Fund, including AllianceBernstein Institutional Funds, by (i) an
individual, his or her spouse, or the individual's children under the age of 21
years purchasing shares for his, her or their own account(s), including certain
CollegeBoundfund accounts; (ii) a trustee or other fiduciary purchasing shares
for a single trust, estate or single fiduciary account with one or more
beneficiaries involved; or (iii) 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 Portfolio 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.

          Currently, the AllianceBernstein Mutual Funds include:

AllianceBernstein All-Asia Investment Fund, Inc.
AllianceBernstein Americas Government Income Trust, Inc.
AllianceBernstein Balanced Shares, Inc.
AllianceBernstein Blended Style Series, Inc.
  -U.S. Large Cap Portfolio
AllianceBernstein Bond Fund, Inc.
  -AllianceBernstein Corporate Bond Portfolio
  -AllianceBernstein Quality Bond Portfolio
  -AllianceBernstein U.S. Government Portfolio
AllianceBernstein Cap Fund, Inc.
  -AllianceBernstein Small Cap Growth Portfolio
AllianceBernstein Emerging Market Debt Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Focused Growth & Income Fund, Inc.
AllianceBernstein Global Health Care Fund, Inc.
AllianceBernstein Global Research Growth Fund, Inc.
AllianceBernstein Global Strategic Income Trust, Inc.
AllianceBernstein Global Technology Fund, Inc.
AllianceBernstein Greater China `97 Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein High Yield Fund, Inc.
AllianceBernstein International Premier Growth Fund, Inc.
AllianceBernstein Large Cap Growth Fund, Inc.
AllianceBernstein Mid-Cap Growth Fund, Inc.
AllianceBernstein Multi-Market Strategy Trust, Inc.
AllianceBernstein Municipal Income Fund, Inc.
  -California Portfolio
  -Insured California Portfolio
  -Insured National Portfolio
  -National Portfolio
  -New York Portfolio
AllianceBernstein Municipal Income Fund II
  -Arizona Portfolio
  -Florida Portfolio
  -Massachusetts Portfolio
  -Michigan Portfolio
  -Minnesota Portfolio
  -New Jersey Portfolio
  -Ohio Portfolio
  -Pennsylvania Portfolio
  -Virginia Portfolio
AllianceBernstein New Europe Fund, Inc.
AllianceBernstein Real Estate Investment Fund, Inc.
AllianceBernstein Trust
  -AllianceBernstein Global Value Fund
  -AllianceBernstein International Value Fund
  -AllianceBernstein Small/Mid Cap Value Fund
  -AllianceBernstein Value Fund
AllianceBernstein Utility Income Fund, Inc.
AllianceBernstein Worldwide Privatization Fund, Inc.
The AllianceBernstein Portfolios
  -AllianceBernstein Balanced Wealth Strategy
  -AllianceBernstein Growth Fund
  -AllianceBernstein Tax-Managed Balanced Wealth Strategy
  -AllianceBernstein Tax-Managed Wealth Appreciation Strategy
  -AllianceBernstein Tax-Managed Wealth Preservation Strategy
  -AllianceBernstein Wealth Appreciation Strategy
  -AllianceBernstein Wealth Preservation Strategy
Sanford C. Bernstein Fund, Inc.
  -AllianceBernstein Intermediate Diversified Municipal       Portfolio
  -AllianceBernstein Intermediate California Municipal Portfolio
  -AllianceBernstein Intermediate New York Municipal Portfolio
  -AllianceBernstein International Portfolio
  -AllianceBernstein Short Duration Portfolio
  -AllianceBernstein Tax-Managed International Portfolio

          Prospectuses for the AllianceBernstein Mutual Funds may be obtained
without charge by contacting AGIS at the address or the "For Literature"
telephone number shown on the front cover of this SAI.

          Cumulative Quantity Discount (Right of Accumulation). An investor's
purchase of additional Class A shares of the Portfolio may be combined with the
value of the shareholder's existing accounts, thereby enabling the shareholder
to take advantage of the quantity discounts described under "Alternative
Purchase Arrangements - Class A Shares." In such cases, the applicable sales
charge on the newly purchased shares will be based on the total of:

                    (i)  the investor's current purchase;

                    (ii) the NAV (at the close of business on the previous day)
                         of (a) all shares of the Portfolio held by the investor
                         and (b) all shares held by the investor of any other
                         AllianceBernstein Mutual Fund, including
                         AllianceBernstein Institutional Funds and certain
                         CollegeBoundfund accounts for which the investor, his
                         or her spouse, or child under the age of 21 is the
                         participant; and

                    (iii) the NAV 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 AllianceBernstein
Mutual Fund worth $200,000 at their then current NAV and, subsequently,
purchased Class A shares of the Portfolio 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 Portfolio, rather than the 3.25%
rate.

          Letter of Intent. Class A investors may also obtain the quantity
discounts described under "Alternative Purchase Arrangements - Class A Shares"
by means of a written Letter of Intent, which expresses the investor's intention
to invest at least $100,000 in Class A shares of the Portfolio or any
AllianceBernstein Mutual Fund within 13 months. Each purchase of shares under a
Letter of Intent 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 Letter of Intent. At the investor's option, a Letter of Intent
may include purchases of shares of the Portfolio or any other AllianceBernstein
Mutual Fund made not more than 90 days prior to the date that the investor signs
a Letter of Intent, in which case the 13-month period during which the Letter of
Intent is in effect will begin on the date of that earliest purchase. However,
sales charges will not be reduced for purchases made prior to the date the
Letter of Intent is signed.

          Investors qualifying for the Combined Purchase Privilege described
above may purchase shares of the AllianceBernstein Mutual Funds under a single
Letter of Intent. For example, if at the time an investor signs a Letter of
Intent to invest at least $100,000 in Class A shares of the Portfolio, the
investor and the investor's spouse each purchase shares of the Portfolio 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 Portfolio or any other
AllianceBernstein 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 Letter of Intent is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intent 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 at their then NAV to pay the
additional sales charge, if necessary. Dividends on escrowed shares, whether
paid in cash or reinvested in additional Portfolio shares, are not subject to
escrow. When the full amount indicated has been purchased, the escrow will be
released.

          Investors wishing to enter into a Letter of Intent in conjunction with
their initial investment in Class A shares of the Portfolio can obtain a form of
Letter of Intent by contacting AGIS at the address or telephone numbers shown on
the cover of this SAI.

          Reinstatement Privilege. A shareholder who has redeemed any or all of
his or her Class A or Class B shares may reinvest all or any portion of the
proceeds from that redemption in Class A shares of the Portfolio at NAV without
any sales charge, provided that (i) such reinvestment is made within 120
calendar days after the redemption or repurchase date, and (ii) for Class B
shares, a CDSC has been paid and the Principal Underwriter has approved, at its
discretion, the reinstatement of such shares. Shares are sold to a reinvesting
shareholder at the NAV next determined as described above. A reinstatement
pursuant to this privilege will not cancel the redemption or repurchase
transaction; therefore, any gain or loss so realized will be recognized for
federal income tax purposes except that no loss will be recognized to the extent
that the proceeds are reinvested in shares of the Portfolio within 30 calendar
days after the redemption or repurchase transaction. Investors may exercise the
reinstatement privilege by written request sent to the Portfolio at the address
shown on the cover of this SAI.

          Dividend Reinvestment Program. Shareholders may elect to have all
income and capital gains distributions from their account paid to them in the
form of additional shares of the same class of the Portfolio pursuant to the
Portfolio's Dividend Reinvestment Program. No initial sales charge or CDSC will
be imposed on shares issued pursuant to the Dividend Reinvestment Program.
Shares issued under this program will have an aggregate NAV as of the close of
business on the declaration date of the dividend or distribution equal to the
cash amount of the distribution. Investors wishing to participate in the
Dividend Reinvestment Program should complete the appropriate section of the
Subscription Application. Current shareholders should contact AGIS to
participate in the Dividend Reinvestment Program.

          In certain circumstances where a shareholder has elected to receive
dividends and/or capital gain distributions in cash but the account has been
determined to be lost due to mail being returned to us by the Postal Service as
undeliverable, such shareholder's distributions option will automatically be
placed within the Dividend Reinvestment Program for future distributions. No
interest will accrue on amounts represented by uncashed distribution checks.

Dividend Direction Plan
- -----------------------

          A shareholder who already maintains accounts in more than one
AllianceBernstein Mutual Fund may direct that income dividends and/or capital
gains paid by one AllianceBernstein Mutual Fund be automatically reinvested, in
any amount, without the payment of any sales or service charges, in shares of
the same class of the other AllianceBernstein Mutual Fund(s). Further
information can be obtained by contacting AGIS at the address or the "For
Literature" telephone number shown on the cover of this SAI. Investors wishing
to establish a dividend direction plan in connection with their initial
investment should complete the appropriate section of the Subscription
Application. Current shareholders should contact AGIS to establish a dividend
direction plan.

Systematic Withdrawal Plan
- --------------------------

          General. Any shareholder who owns or purchases shares of the Portfolio
having a current NAV of at least $5,000 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. The $5,000 account minimum does
not apply to a shareholder owning shares through an individual retirement
account or other retirement plan who has attained the age of 70-1/2 who wishes
to establish a systematic withdrawal plan to help satisfy a required minimum
distribution. Systematic withdrawal plan participants must elect to have their
dividends and distributions from the Portfolio automatically reinvested in
additional shares of the Portfolio.

          Shares of the Portfolio owned by a participant in the Portfolio's
systematic withdrawal plan will be redeemed as necessary to meet withdrawal
payments and such payments will be subject to any taxes applicable to
redemptions and, except as discussed below with respect to Class B and Class C
shares, any applicable CDSC. 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 Portfolio.

          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 Portfolio's involuntary redemption provisions. See
"Redemption and Repurchase of Shares -- General." Purchases of additional shares
concurrently with withdrawals are undesirable because of sales charges
applicable when purchases are made. While an occasional lump-sum investment may
be made by a holder of Class A shares who is maintaining a systematic withdrawal
plan, such investment should normally be an amount equivalent to three times the
annual withdrawal or $5,000, whichever is less.

          Payments under a systematic withdrawal plan may be made by check or
electronically via the Automated Clearing House ("ACH") network. Investors
wishing to establish a systematic withdrawal plan in conjunction with their
initial investment in shares of the Portfolio should complete the appropriate
portion of the Subscription Application, while current Portfolio shareholders
desiring to do so can obtain an application form by contacting AGIS at the
address or the "For Literature" telephone number shown on the cover of this SAI.

          CDSC Waiver for Class B Shares and Class C Shares. Under the
systematic withdrawal plan, up to 1% monthly, 2% bi-monthly or 3% quarterly of
the value at the time of redemption of the Class B or Class C shares in a
shareholder's account may be redeemed free of any CDSC.

          Class B shares that are not subject to a CDSC (such as shares acquired
with reinvested dividends or distributions) will be redeemed first and will
count toward the foregoing limitations. Remaining Class B shares that are held
the longest will be redeemed next. Redemptions of Class B shares in excess of
the foregoing limitations will be subject to any otherwise applicable CDSC.

          With respect to Class C shares, shares held the longest will be
redeemed first and will count toward the foregoing limitations. Redemptions in
excess of those limitations will be subject to any otherwise applicable CDSC.

Payments to Financial Advisors and Their Firms
- ----------------------------------------------

          Financial intermediaries market and sell shares of the Portfolio.
These financial intermediaries employ financial advisors and receive
compensation for selling shares of the Portfolio. This compensation is paid from
various sources, including any sales charge, CDSC and/or Rule 12b-1 fee that you
or the Portfolio may pay. Your individual financial advisor may receive some or
all of the amounts paid to the financial intermediary that employs him or her.

          In the case of Class A shares, all or a portion of the initial sales
charge that you pay may be paid by ABIRM to financial intermediaries selling
Class A shares. ABIRM may also pay these financial intermediaries a fee of up to
1% on purchases of $1 million or more. Additionally, up to 100% of the Rule
12b-1 fees applicable to Class A shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class A shares.

          In the case of Class B shares, ABIRM will pay, at the time of your
purchase, a commission to financial intermediaries selling Class B shares in an
amount equal to 4% of your investment. Additionally, up to 30% of the Rule 12b-1
fees applicable to Class B shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class B shares.

          In the case of Class C shares, ABIRM will pay, at the time of your
purchase, a commission to firms selling Class C Shares in an amount equal to 1%
of your investment. Additionally, up to 100% of the Rule 12b-1 fee applicable to
Class C shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class C shares.

          In the case of Class R shares up to 100% of the Rule 12b-1 fee
applicable to Class R shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class R shares.

          In the case of Class K shares, up to 100% of the Rule 12b-1 fee
applicable to Class K shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class K shares.

          In the case of Advisor Class shares, your financial advisor may charge
ongoing fees or transactional fees. ABIRM may pay a portion of "ticket" or other
transactional charges.

          Your financial advisor's firm receives compensation from the
Portfolio, ABIRM and/or Alliance in several ways from various sources, which
include some or all of the following:

     o    upfront sales commissions

     o    12b-1 fees

     o    additional distribution support

     o    defrayal of costs for educational seminars and training

     o    payments related to providing shareholder record-keeping and/or
          transfer agency services

          Please read your Prospectus carefully for information on this
compensation.

Other Payments for Distribution Services and Educational Support
- ----------------------------------------------------------------

          In addition to the commissions paid to financial intermediaries at the
time of sale and the fees described under "Asset-Based Sales Charges or
Distribution and/or Service (Rule 12b-1) Fees," in your Prospectus, some or all
of which may be paid to financial intermediaries (and, in turn, to your
financial advisor), ABIRM, at its expense, currently provides additional
payments to firms that sell shares of the AllianceBernstein Mutual Funds.
Although the individual components may be higher and the total amount of
payments made to each qualifying firm in any given year may vary, the total
amount paid to a financial intermediary in connection with the sale of shares of
the AllianceBernstein Mutual Funds will generally not exceed the sum of (a)
0.25% of the current year's fund sales by that firm and (b) 0.10% of average
daily net assets attributable to that firm over the year. These sums include
payments to reimburse directly or indirectly the costs incurred by these firms
and their employees in connection with educational seminars and training efforts
about the AllianceBernstein Mutual Funds for the firms' employees and/or their
clients and potential clients. The costs and expenses associated with these
efforts may include travel, lodging entertainment and meals.

          For 2005, ABIRM's additional payments to these firms for distribution
services and educational support related to the AllianceBernstein Mutual Funds
is expected to be approximately 0.04% of the average monthly assets of the
AllianceBernstein Mutual Funds, or approximately $17.5 million. In 2004, ABIRM
paid approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $16 million for distribution services and
educational support related to the AllianceBernstein Mutual Funds.

          A number of factors are considered in determining the additional
payments, including each firm's AllianceBernstein Mutual Fund sales, assets and
redemption rates, and the willingness and ability of the firm to give ABIRM
access to its financial advisors for educational and marketing purposes. In some
cases, firms will include the AllianceBernstein Mutual Funds on a "preferred
list." ABIRM's goal is to make the financial advisors who interact with current
and prospective investors and shareholders more knowledgeable about the
AllianceBernstein Mutual Funds so that they can provide suitable information and
advice about the funds and related investor services.

          The Portfolio and ABIRM also make payments for recordkeeping and other
transfer agency services to financial intermediaries that sell AllianceBernstein
Mutual Fund shares. Please see "Expenses of the Fund - Transfer Agency
Agreement" above. These expenses paid by the Portfolio are included in "Other
Expenses" under "Fees and Expenses of the Fund - Annual Fund Operating Expenses"
in your Prospectus.

          If one mutual fund sponsor makes greater distribution assistance
payments than another, your financial advisor and his or her firm may have an
incentive to recommend one fund complex over another. Similarly, if your
financial advisor or his or her firm receives more distribution assistance for
one share class versus another, then they may have an incentive to recommend
that class.

          Please speak with your financial advisor to learn more about the total
amounts paid to your financial advisor and his or her firm by the Portfolio,
Alliance, ABIRM and by sponsors of other mutual funds he or she may recommend to
you. You should also consult disclosures made by your financial advisor at the
time of purchase.

          ABIRM anticipates that the firms that will receive additional payments
for distribution services and/or educational support include:

      A.G. Edwards
      AIG Advisor Group
      American Express Financial Advisors
      AXA Advisors
      Bank One Securities Corp.
      BNY Investment Center
      Charles Schwab
      Chase Investment Services
      Citigroup Global Markets
      Commonwealth Financial
      IFMG Securities
      ING Advisors Network
      Legg Mason
      Lincoln Financial Advisors
      Linsco Private Ledger
      Merrill Lynch
      Morgan Stanley
      Mutual Service Corporation
      National Financial
      NPH Holdings
      PFS Investments
      Piper Jaffray
      Raymond James
      RBC Dain Rauscher
      Securities America
      SunTrust Bank
      UBS Financial
      Uvest Financial Services
      Wachovia Securities
      Wells Fargo


          Although the Fund may use brokers and dealers who sell shares of the
Portfolio to effect portfolio transactions, the Fund does not consider the sale
of AllianceBernstein Mutual Fund shares as a factor when selecting brokers or
dealers to effect portfolio transactions.

- ------------------------------------------------------------------------------

                       REDEMPTION AND REPURCHASE OF SHARES
- ------------------------------------------------------------------------------


          The following information supplements that set forth in your
Prospectus under "Investing in the Funds." If you are an Advisor Class
shareholder through an account established under a fee-based program your
fee-based program may impose requirements with respect to the purchase, sale or
exchange of Advisor Class shares of the Portfolio that are different from those
described herein. A transaction fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial intermediary. The Portfolio has authorized
one or more brokers to receive on its behalf purchase and redemption orders.
Such brokers are authorized to designate other intermediaries to receive
purchase and redemption orders on the Portfolio's behalf. In such cases, orders
will receive the NAV next computed after such order is properly received by the
authorized broker or designee and accepted by the Portfolio.

Redemption
- ----------

          Subject only to the limitations described below, the Fund's Charter
requires that the Fund redeem the shares of the Portfolio tendered to it, as
described below, at a redemption price equal to their NAV as next computed
following the receipt of shares tendered for redemption in proper form. Except
for any CDSC which may be applicable to Class A shares, Class B shares and Class
C shares, there is no redemption charge. Payment of the redemption price
normally will be made within seven days after the Fund's receipt of such tender
for redemption. If a shareholder is in doubt about what documents are required
by his or her fee-based program or employee benefit plan, the shareholder should
contact his or her financial intermediary.

          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 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 Portfolio of securities owned by it is not reasonably practicable or as a
result of which it is not reasonably practicable for the Portfolio fairly to
determine the value of its net assets, or for such other periods as the
Commission may by order permit for the protection of security holders of the
Portfolio.

          Payment of the redemption price normally will be made in cash. No
interest will accrue on uncashed redemption checks. 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 Portfolio's
portfolio securities at the time of such redemption or repurchase. Redemption
proceeds on Class A, Class B and Class C shares will reflect the deduction of
the CDSC, 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 or her hands, will result in
long-term or short-term capital gains (or loss) depending upon the shareholder's
holding period and basis in respect of the shares redeemed.

          To redeem shares of the Portfolio for which no share certificates have
been issued, the registered owner or owners should forward a letter to the
Portfolio containing a request for redemption. The Fund may require the
signature or signatures on the letter to be Medallion Signature Guaranteed.
Please contact AGIS to confirm whether a Medallion Signature Guarantee is
needed.

          To redeem shares of the Portfolio 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 Portfolio 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 Portfolio for redemption must be signed by the
registered owner or owners exactly as the registered name appears on the face of
the certificate or, alternatively, a stock power signed in the same manner may
be attached to the stock certificate or certificates or, where tender is made by
mail, separately mailed to the Fund. The signature or signatures on the
assignment form must be guaranteed in the manner described above.

          Telephone Redemption by Electronic Funds Transfer. Each Portfolio
shareholder is entitled to request redemption by electronic funds transfer (of
shares for which no share certificates have been issued) by telephone at (800)
221-5672 if the shareholder has completed the appropriate portion of the
Subscription Application or, if an existing shareholder has not completed this
portion, by an "Autosell" application obtained from AGIS (except for certain
omnibus accounts). A telephone redemption by electronic funds transfer may not
exceed $100,000, and must be made by 4:00 p.m., Eastern time, on a Fund business
day as defined above. Proceeds of telephone redemptions will be sent by
electronic funds transfer to a shareholder's designated bank account at a bank
selected by the shareholder that is a member of the NACHA.

          Telephone Redemption by Check. Each Portfolio shareholder is eligible
to request redemption by check of Portfolio shares for which no stock
certificate have been issued by telephone at (800) 221-5672 before 4:00 p.m.,
Eastern time, on a Fund business day in an amount not exceeding $50,000.
Proceeds of such redemptions are remitted by check to the shareholder's address
of record. A shareholder otherwise eligible for telephone redemption by check
may cancel the privilege by written instruction to AGIS, or by checking the
appropriate box on the Subscription Application.

          Telephone Redemptions - General. During periods of drastic economic,
market, or other developments, such as the terrorist attacks on September 11,
2001, it is possible that shareholders would have difficulty in reaching AGIS by
telephone (although no such difficulty was apparent at any time in connection
with the attacks). If a shareholder were to experience such difficulty, the
shareholder should issue written instructions to AGIS at the address shown on
the cover of this SAI. The Fund reserves the right to suspend or terminate its
telephone redemption service at any time without notice. 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) held by a
shareholder who has changed his or her address of record within the preceding 30
calendar days or (iv) held in any retirement plan account. Neither the Fund, the
Investment Adviser, the Principal Underwriter nor AGIS 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. Financial intermediaries may charge a
commission for handling telephone requests for redemptions.

Repurchase
- ----------

          The Portfolio may repurchase shares through the Principal Underwriter
or selected financial intermediaries. The repurchase price will be the NAV next
determined after the Principal Underwriter receives the request (less the CDSC,
if any, with respect to the Class A, Class B and Class C shares), except that
requests placed through selected financial intermediaries before the close of
regular trading on the Exchange on any day will be executed at the NAV
determined as of such close of regular trading on that day if received by the
Principal Underwriter prior to its close of business on that day (normally 5:00
p.m., Eastern time). The financial intermediary is responsible for transmitting
the request to the Principal Underwriter by 5:00 p.m., Eastern time, (certain
financial intermediaries may enter into operating agreements permitting them to
transmit purchase information that was received prior to the close of business
to the Principal Underwriter after 5:00 p.m., Eastern time, and receive that
day's NAV). If the financial intermediary fails to do so, the shareholder's
right to receive that day's closing price must be settled between the
shareholder and that financial intermediary. A shareholder may offer shares of
the Portfolio to the Principal Underwriter either directly or through a
financial intermediary. Neither the Portfolio nor the Principal Underwriter
charges a fee or commission in connection with the repurchase of shares (except
for the CDSC, if any, with respect to Class A, Class B and Class C shares).
Normally, if shares of the Portfolio are offered through a financial
intermediary, the repurchase is settled by the shareholder as an ordinary
transaction with or through that financial intermediary, who may charge the
shareholder for this service. The repurchase of shares of the Portfolio 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 90 days. Shareholders will
receive 60 days' written notice to increase the account value before the account
is closed. No CDSC will be deducted from the proceeds of this redemption. In the
case of a redemption or repurchase of shares of the Portfolio 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 your
Prospectus under "Investing in the Funds." The shareholder services set forth
below are applicable to all classes of shares unless otherwise indicated. If you
are an Advisor Class shareholder through an account established under a
fee-based program or a shareholder in a group retirement plan, your fee-based
program or retirement plan may impose requirements with respect to the purchase,
sale or exchange of shares of the Portfolio that are different from those
described herein.

Automatic Investment Program
- ----------------------------

          Investors may purchase shares of the Portfolio through an automatic
investment program utilizing electronic fund transfer drawn on the investor's
own bank account. Under such a program, pre-authorized monthly drafts for a
fixed amount 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.
The monthly drafts must be in minimum amounts of either $50 or $200, depending
on the investor's initial purchase. If an investor makes an initial purchase of
at least $2,500, the minimum monthly amount for pre-authorized drafts is $50. If
an investor makes an initial purchase of less than $2,500, the minimum monthly
amount for pre-authorized drafts is $200 and the investor must commit to a
monthly investment of at least $200 until the investor's account balance is
$2,500 or more. 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. Current shareholders
should contact AGIS at the address or telephone numbers shown on the cover of
this SAI to establish an automatic investment program.

          Shareholders committed to monthly investments of $25 or more through
the Automatic Investment Program by October 15, 2004 are able to continue their
program despite the $200 monthly minimum.

Exchange Privilege
- ------------------

          You may exchange your investment in the Portfolio for shares of the
same class of other AllianceBernstein Mutual Funds (including AllianceBernstein
Exchange Reserves, a money market fund managed by the Investment Adviser) if the
other AllianceBernstein Mutual Fund in which you wish to invest offers shares of
the same class. In addition, (i) present officers and full-time employees of the
Investment Adviser, (ii) present Directors or Trustees of any AllianceBernstein
Mutual Fund and (iii) certain employee benefit plans for employees of the
Investment Adviser, the Principal Underwriter, AGIS and their affiliates may, on
a tax-free basis, exchange Class A shares of the Portfolio for Advisor Class
shares of the Portfolio. Exchanges of shares are made at the NAV next determined
and without sales or service charges. Exchanges may be made by telephone or
written request. In order to receive a day's NAV, AGIS must receive and confirm
a telephone exchange request by 4:00 p.m., Eastern time, on that day. Shares
will continue to age without regard to exchanges for purposes of determining the
CDSC, if any, upon redemption and, in the case of Class B shares, for the
purpose of conversion to Class A shares. After an exchange, your Class B shares
will automatically convert to Class A shares in accordance with the conversion
schedule applicable to the Class B shares of the AllianceBernstein Mutual Fund
you originally purchased for cash ("original shares"). When redemption occurs,
the CDSC applicable to the original shares is applied.

          Please read carefully the prospectus of the AllianceBernstein Mutual
Fund into which you are exchanging before submitting the request. Call AGIS at
(800) 221-5672 to exchange uncertificated shares. Except with respect to
exchanges of Class A shares of the Portfolio for Advisor Class shares of the
Portfolio, exchanges of shares as described above in this section are taxable
transactions for federal tax purposes. The exchange service may be modified,
restricted or terminated on 60 days' written notice.

          All exchanges are subject to the minimum investment requirements and
any other applicable terms set forth in the prospectus for the AllianceBernstein
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 NAVs as next determined following receipt by the
AllianceBernstein 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 AllianceBernstein 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 AllianceBernstein
Mutual Funds will generally result in the realization of a capital gain or loss
for federal income tax purposes.

          Each Portfolio shareholder and the shareholder's financial
intermediary are authorized to make telephone requests for exchanges unless AGIS
receives written instruction to the contrary from the shareholder, or the
shareholder declines the privilege by checking the appropriate box on the
Subscription Application. 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
AGIS with their account number and other details of the exchange at (800)
221-5672 before 4:00 p.m., Eastern time, on a Fund business day as defined
above. Telephone requests for exchange received before 4:00 p.m., Eastern time,
on a Fund business day will be processed as of the close of business on that
day. During periods of drastic economic, market, or other developments, such as
the terrorist attacks on September 11, 2001, it is possible that shareholders
would have difficulty in reaching AGIS by telephone (although no such difficulty
was apparent at any time in connection with the attacks). If a shareholder were
to experience such difficulty, the shareholder should issue written instructions
to AGIS at the address shown on the cover of this SAI.

          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 AllianceBernstein Mutual Fund.
Auto Exchange transactions normally occur on the 12th day of each month, or the
Fund business day prior thereto.

          None of the AllianceBernstein Mutual Funds, the Investment Adviser,
the Principal Underwriter or AGIS 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. Financial intermediaries may charge a
commission for handling telephone requests for exchanges.

          The exchange privilege is available only in states where shares of the
AllianceBernstein Mutual Fund being acquired may be legally sold. Each
AllianceBernstein Mutual Fund reserves the right, at any time on 60 days' notice
to its shareholders, to modify, restrict or terminate the exchange privilege.

Statements and Reports
- ----------------------

          Each shareholder of the Portfolio 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 registered
public accounting firm, Ernst & Young LLP, as well as a confirmation of each
purchase and redemption. By contacting his or her financial intermediary or
AGIS, a shareholder can arrange for copies of his or her account statements to
be sent to another person.

- ------------------------------------------------------------------------------

                                 NET ASSET VALUE
- ------------------------------------------------------------------------------

          The NAV is computed at the next close of regular trading on the
Exchange (ordinarily 4:00 p.m. Eastern time) following receipt of a purchase or
redemption order by the Portfolio on each Fund business day on which such an
order is received and on such other days as the Board of Directors deems
appropriate or necessary in order to comply with Rule 22c-1 under the 1940 Act.
The Portfolio's NAV is calculated by dividing the value of the Portfolio's total
assets, less its liabilities, by the total number of its shares then
outstanding. As noted above, a Fund business day is any weekday on which the
Exchange is open for trading.

          In accordance with applicable rules under the 1940 Act and the
Portfolio's pricing policies and procedures adopted by the Board of Directors
(the "Pricing Policies"), portfolio securities are valued at current market
value or at fair value. The Board of Directors has delegated to the Investment
Adviser, subject to the Board's continuing oversight, certain of its duties with
respect to the Pricing Policies.

          With respect to securities for which market quotations are readily
available, the market value of a security will be determined as follows:

          (a) securities listed on the Exchange or on a foreign securities
exchange are valued at the last sale price reflected on the consolidated tape at
the close of the Exchange or foreign securities 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 in good faith at fair value by, or in accordance with procedures
established by, the Board of Directors;

          (b) securities not listed on the Exchange or on a foreign securities
exchange but listed on other national securities exchanges are valued in
accordance with paragraph (a) above, and securities traded on The Nasdaq Stock
Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official
Closing Price;

          (c) securities traded on the Exchange or on a foreign securities
exchange and on one or more other national or foreign securities exchanges, and
securities not traded on the Exchange but traded on one or more other national
or foreign securities exchanges, are valued in accordance with paragraph (a)
above by reference to the principal exchange on which the securities are traded;

          (d) listed put or call options purchased by the Portfolio are valued
at the last sale price. If there has been no sale on that day, such securities
will be valued at the closing bid prices on that day;

          (e) open futures contracts and options thereon will be valued using
the closing settlement price or, in the absence of such a price, the most recent
quoted bid price. If there are no quotations available for the day of
valuations, the last available closing settlement price will be used;

          (f) securities traded in the over-the-counter market, including
securities listed on a national securities exchange whose primary market is
believed to be over-the-counter (but excluding securities traded on NASDAQ) are
valued at the mean of the current bid and asked prices as reported by the
National Quotation Bureau or other comparable sources;

          (g) U.S. Government securities and other debt instruments having 60
days or less remaining until maturity are valued at amortized cost if their
original maturity was 60 days or less, or by amortizing their fair value as of
the 61st day prior to maturity if their original term to maturity exceeded 60
days (unless in either case it is determined, in accordance with procedures
established by the Board of Directors, that this method does not represent fair
value);

          (h) fixed-income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities. The prices provided by a pricing service take
into account many factors, including institutional size, trading in similar
groups of securities and any developments related to specific securities. For
securities where the Investment Adviser has determined that an appropriate
pricing service does not exist, such securities may be valued on the basis of a
quoted bid price or spread from a major broker-dealer in such security;

          (i) mortgage-backed and asset-backed securities may be valued at
prices obtained from a bond pricing service or at a price obtained from one or
more of the major broker-dealers in such securities when such prices are
believed to reflect the fair market value of such securities. In cases where
broker-dealer quotes are obtained, the Investment Adviser may establish
procedures whereby changes in market yields or spreads are used to adjust, on a
daily basis, a recently obtained quoted bid price on a security;

          (j) OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker-dealer in such security; and

          (k) all other securities will be valued in accordance with readily
available market quotations as determined in accordance with procedures
established by the Board of Directors.

          The Portfolio values its securities at their current market value
determined on the basis of market quotations or, if market quotations are not
readily available or are unreliable, at "fair value" as determined in accordance
with procedures established by and under the general supervision of the Fund's
Board of Directors. When the Portfolio uses fair value pricing, it may take into
account any factors it deems appropriate. The Portfolio may determine fair value
based upon developments related to a specific security, current valuations of
foreign stock indices (as reflected in U.S. futures markets) and/or U.S. sector
or broader stock market indices. The prices of securities used by the Portfolio
to calculate its NAV may differ from quoted or published prices for the same
securities. Fair value pricing involves subjective judgments and it is possible
that the fair value determined for a security is materially different than the
value that could be realized upon the sale of that security.

          The Portfolio expects to use fair value pricing for securities
primarily traded on U.S. exchanges only under very limited circumstances, such
as the early closing of the exchange on which a security is traded or suspension
of trading in the security. The Portfolio may use fair value pricing more
frequently for securities primarily traded in non-U.S. markets because, among
other things, most foreign markets close well before the Portfolio values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim. For example, the Portfolio
believes that foreign security values may be affected by events that occur after
the close of foreign securities markets. To account for this, the Portfolio may
frequently value many of its foreign equity securities using fair value prices
based on third party vendor modeling tools to the extent available.

          Subject to the Board's oversight, the Fund's Board has delegated
responsibility for valuing the Portfolio's assets to Alliance. Alliance has
established a Valuation Committee, which operates under the policies and
procedures approved by the Board, to value the Portfolio's assets on behalf of
the Portfolio. The Valuation Committee values Portfolio assets as described
above.

          The Portfolio may suspend the determination of its NAV (and the
offering and sale of shares), subject to the rules of the Commission and other
governmental rules and regulations, at a time when: (1) the Exchange is closed,
other than customary weekend and holiday closings, (2) an emergency exists as a
result of which it is not reasonably practicable for the Portfolio to dispose of
securities owned by it or to determine fairly the value of its net assets, or
(3) for the protection of shareholders, the Commission by order permits a
suspension of the right of redemption or a postponement of the date of payment
on redemption.

          For purposes of determining the Portfolio's NAV per share, all assets
and liabilities initially expressed in a foreign currency will be converted into
U.S. dollars at the mean of the current bid and asked prices of such currency
against the U.S. dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the basis of a pricing
service that takes into account the quotes provided by a number of such major
banks. If such quotations are not available as of the close of the Exchange, the
rate of exchange will be determined in good faith by, or under the direction of,
the Board of Directors.

          The assets attributable to the Class A shares, Class B shares, Class C
shares, Class R shares, Class K shares, Class I shares and Advisor Class shares
will be invested together in a single portfolio. The NAV of each class will be
determined separately by subtracting the liabilities allocated to that class
from the assets belonging to that class in conformance with the provisions of a
plan adopted by the Fund in accordance with Rule 18f-3 under the 1940 Act.

- ------------------------------------------------------------------------------

                             PORTFOLIO TRANSACTIONS
- ------------------------------------------------------------------------------

          Subject to the general oversight of the Board of Directors of the
Fund, the Investment Adviser is responsible for the investment decisions and the
placing of the orders for portfolio transactions for the Portfolio. The
Investment Adviser determines the broker or dealer to be used in each specific
transaction with the objective of negotiating a combination of the most
favorable commission (for transactions on which a commission is payable) and the
best price obtainable on each transaction (generally defined as best execution).
In connection with seeking best price and execution, the Fund does not consider
sales of shares of the Portfolio or other investment companies managed by the
Investment Adviser as a factor in the selection of brokers and dealers to effect
portfolio transactions and has adopted a policy and procedures reasonably
designed to preclude such considerations. The Portfolio's portfolio transactions
occur primarily with issuers, underwriters or major dealers acting as
principals. Such transactions are normally on a net basis which do not involve
payment of brokerage commissions. The cost of securities purchased from an
underwriter usually includes a commission paid by the issuer to the underwriter;
transactions with dealers normally reflect the spread between bid and asked
prices. Premiums are paid with respect to options purchased by the Portfolio and
brokerage commissions are payable with respect to transactions in
exchange-traded interest rate futures contracts.

          Most transactions for the Portfolio, including transactions in listed
securities, are executed in the over-the-counter market by approximately fifteen
(15) principal market maker dealers with whom the Investment Adviser maintains
regular contact. Most transactions made by the Portfolio will be principal
transactions at net prices and the Portfolio will incur little or no brokerage
costs. Where possible, securities will be purchased directly from the issuer or
from an underwriter or market maker for the securities unless the Investment
Adviser believes a better price and execution is available elsewhere. Purchases
from underwriters of newly-issued securities for inclusion in the Portfolio
usually will include a concession paid to the underwriter by the issuer and
purchases from dealers serving as market makers will include the spread between
the bid and asked price.

          The Portfolio has no obligation to enter into transactions in
securities with any broker, dealer, issuer, underwriter or other entity. Where
best price and execution may be obtained from more than one broker or dealer,
the Investment Adviser may, in its discretion, purchase and sell securities
through brokers and dealers who provide research, statistical and other
information to the Investment Adviser. Such services may be used by the
Investment Adviser for all of its investment advisory accounts and, accordingly,
not all such services may be used by the Investment Adviser in connection with
the Portfolio. There may be occasions where the transaction cost charged by a
broker may be greater than that which another broker may charge if the Fund
determines in good faith that the amount of such transaction cost is reasonable
in relationship to the value of the brokerage and research and statistical
services provided by the executing broker. During the fiscal years ended June
30, 2002 and 2003, the fiscal period ended September 30, 2003 and the fiscal
year ended September 30, 2004, the Portfolio incurred no brokerage commissions.

          The Fund may from time to time place orders for the purchase or sale
of securities (including listed call options) with SCB & Co. or Advest Inc.
("Advest"), each an affiliate of the Investment Adviser. 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 SCB & Co. or Advest is an affiliate of the Investment Adviser. With respect
to orders placed with SCB & Co. or Advest for execution on a national securities
exchange, commissions received must conform to Section 17(e)(2)(A) of the 1940
Act and Rule 17e-1 thereunder, which permit an affiliated person of a registered
investment company (such as the Fund), or any affiliated person of such person,
to receive a brokerage commission from such registered investment company
provided that such commission is reasonable and fair compared to the commissions
received by other brokers in connection with comparable transactions involving
similar securities during a comparable period of time.

Disclosure of Portfolio Holdings
- --------------------------------

          The Fund believes that the ideas of Alliance's investment staff should
benefit the Portfolio and its shareholders, and does not want to afford
speculators an opportunity to profit by anticipating Portfolio trading
strategies or using Portfolio information for stock picking. However, the Fund
also believes that knowledge of the Portfolio's portfolio holdings can assist
shareholders in monitoring their investment, making asset allocation decisions,
and evaluating portfolio management techniques.

          Alliance has adopted, on behalf of the Portfolio, policies and
procedures relating to disclosure of the Portfolio's portfolio securities. The
policies and procedures relating to disclosure of the Portfolio's portfolio
securities are designed to allow disclosure of portfolio holdings information
where necessary to the Portfolio's operation or useful to the Portfolio's
shareholders without compromising the integrity or performance of the Portfolio.
Except when there are legitimate business purposes for selective disclosure and
other conditions (designed to protect the Portfolio and its shareholders) are
met, the Fund does not provide or permit others to provide information about the
Portfolio's portfolio holdings on a selective basis.

          The Fund includes portfolio holdings information as required in
regulatory filings and shareholder reports, discloses portfolio holdings
information as required by federal or state securities laws and may disclose
portfolio holdings information in response to requests by governmental
authorities. In addition, Alliance posts portfolio holdings information on
Alliance's website (www.AllianceBernstein.com). Alliance posts on the website a
complete schedule of the Portfolio's portfolio securities, as of the last day of
each fiscal calendar month, approximately 30 days after the end of that month.
This posted information generally remains accessible on the website for three
months. For each portfolio security, the posted information includes its name,
the number of shares held by the Portfolio, the market value of the Portfolio's
holdings, and the percentage of the Portfolio's assets represented by the
portfolio security. In addition to the schedule of portfolio holdings, Alliance
posts information about the number of securities the Portfolio holds, a summary
of the Portfolio's top ten holdings (including name and the percentage of the
Portfolio's assets invested in each holding), and a percentage breakdown of the
Portfolio's investments by credit rating or security type, as applicable,
approximately 20 days after the end of the month. The day after portfolio
holdings information is publicly available on the website, it may be mailed,
e-mailed or otherwise transmitted to any person.

          Alliance may distribute or authorize the distribution of information
about the Portfolio's portfolio holdings that is not publicly available, on the
website or otherwise, to Alliance's employees and affiliates that provide
services to the Fund. In addition, Alliance may distribute or authorize
distribution of information about the Portfolio's portfolio holdings that is not
publicly available, on the website or otherwise, to the Fund's service providers
who require access to the information in order to fulfill their contractual
duties relating to the Portfolio (including, without limitation, pricing
services and proxy voting services), and to facilitate the review of the
Portfolio by rating agencies, for the purpose of due diligence regarding a
merger or acquisition, or for the purpose of effecting in-kind redemption of
securities to facilitate orderly redemption of portfolio assets and minimal
impact on remaining Portfolio shareholders. Alliance does not expect to disclose
information about the Portfolio's portfolio holdings that is not publicly
available to the Portfolio's individual or institutional investors or to
intermediaries that distribute the Fund's shares. Information may be disclosed
with any frequency and any lag, as appropriate.

          Before any non-public disclosure of information about the Portfolio's
portfolio holdings is permitted, however, Alliance's Mutual Fund Compliance
Director must determine that the Portfolio has a legitimate business purpose for
providing the portfolio holdings information, that the disclosure is in the best
interests of the Portfolio's shareholders, and that the recipient agrees or has
a duty to keep the information confidential and agrees not to trade directly or
indirectly based on the information or to use the information to form a specific
recommendation about whether to invest in the Portfolio or any other security.
Under no circumstances may Alliance or its affiliates receive any consideration
or compensation for disclosing the information.

          Alliance has established procedures to ensure that the Portfolio's
portfolio holdings information is only disclosed in accordance with these
policies. Only Alliance's Mutual Fund Compliance Director (or his designee) may
approve the disclosure, and then only if he or she and a designated senior
officer in Alliance's product management group determines that the disclosure
serves a legitimate business purpose of the Portfolio and is in the best
interest of the Portfolio's shareholders. Alliance's Mutual Fund Compliance
Director (or his designee) approves disclosure only after considering the
anticipated benefits and costs to the Portfolio and its shareholders, the
purpose of the disclosure, any conflicts of interest between the interests of
the Portfolio and its shareholders and the interests of Alliance or any of its
affiliates, and whether the disclosure is consistent with the policies and
procedures governing disclosure. Only someone approved by Alliance's Mutual Fund
Compliance Director (or his designee) may make approved disclosures of portfolio
holdings information to authorized recipients. Alliance reserves the right to
request certifications from senior officers of authorized recipients that the
recipient is using the portfolio holdings information only in a manner
consistent with Alliance's policy and any applicable confidentiality agreement.
Alliance's Mutual Fund Compliance Director or another member of the compliance
team reports all arrangements to disclose portfolio holdings information to the
Fund's Board of Directors on a quarterly basis. If the Board determines that
disclosure was inappropriate, Alliance will promptly terminate the disclosure
arrangement.

          In accordance with these procedures, each of the following third
parties have been approved to receive information concerning the Portfolio's
portfolio holdings: (i) the Fund's independent registered public accounting
firm, for use in providing audit opinions; (ii) Data Communique International
and, from time to time, other financial printers, for the purpose of preparing
Fund regulatory filings; (iii) the Fund's custodian in connection with its
custody of the Portfolio's assets; (iv) Institutional Shareholder Services, Inc.
for proxy voting services; and (v) data aggregators, such as Vestek. Information
may be provided to these parties at any time with no time lag. Each of these
parties is contractually and ethically prohibited from sharing the Portfolio's
holdings information unless specifically authorized.

- ------------------------------------------------------------------------------

                       DIVIDENDS, DISTRIBUTIONS AND TAXES
- ------------------------------------------------------------------------------


          General. The Portfolio intends for each taxable year to qualify to be
taxed as a "regulated investment company" under the Code. To so qualify, the
Portfolio 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, securities
or foreign currency, certain other income (including, but not limited to, gains
from options, futures or forward currency exchange contracts) derived with
respect to its business of investing in stock, securities or currency or net
income derived from interests in certain qualified publicly traded partnerships;
and (ii) diversify its holdings so that, at the end of each quarter of its
taxable year, the following two conditions are met: (a) at least 50% of the
value of the Portfolio's assets is represented by cash, cash items, U.S.
Government Securities, securities of other regulated investment companies and
other securities with respect to which the Portfolio's investment is limited, in
respect of any one issuer, to an amount not greater than 5% of the value of the
Portfolio's assets and to not more than 10% of the outstanding voting securities
of such issuer and (b) not more than 25% of the value of the Portfolio's assets
is invested in securities of any one issuer (other than U.S. Government
Securities or securities of other regulated investment companies).

          If the Portfolio qualifies as a regulated investment company for any
taxable year and makes timely distributions to its shareholders of 90% or more
of its investment company taxable 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.

          It is the present policy of the Portfolio to distribute to
shareholders all net investment income quarterly and to distribute net realized
capital gains, if any, annually. The amount of any such distributions must
necessarily depend upon the realization by the Fund of income and capital gains
from investments.

          The Portfolio will also avoid the 4% federal excise tax that would
otherwise apply to certain undistributed income for a given calendar year if it
makes timely distributions to shareholders equal to the sum of (i) 98% of its
ordinary income for such year, (ii) 98% of its capital gain net income and
foreign currency gains for the twelve-month period ending on October 31 of such
year, and (iii) any ordinary income or capital gain net income from the
preceding calendar year that was not distributed during such year. For this
purpose, income or gain retained by the Portfolio that is subject to corporate
income tax will be considered to have been distributed by the Portfolio during
such year. For federal income and excise tax purposes, dividends declared and
payable to shareholders of record as of a date in October, November or December
but actually paid during the following January will be treated as if paid by the
Portfolio on December 31 of such earlier calendar year, and will be taxable to
these shareholders in the year declared, and not in the year in which the
shareholders actually receive the dividend.

          The information set forth in your Prospectus and the following
discussion relate solely to the significant United States federal income taxes
on dividends and distributions by the Portfolio and assumes that the Portfolio
qualifies to be taxed as a regulated investment company. An investor should
consult his or her own tax advisor with respect to the specific tax consequences
of being a shareholder in the Portfolio, including the effect and applicability
of federal, state, local and foreign tax laws to his or her own particular
situation and the possible effects of changes therein.

          Dividends and Distributions. The Portfolio intends to make timely
distributions of the Portfolio's taxable income (including any net capital gain)
so that the Portfolio will not be subject to federal income and excise taxes.
Dividends of the Portfolio's net ordinary income and distributions of any net
realized short-term capital gain are taxable to shareholders as ordinary income.

          Some or all of the distributions from a mutual fund may be treated as
"qualified dividend income," taxable to individuals, trusts and estates at the
reduced maximum rate of 15% if paid on or before December 31, 2008 (5% for
individuals, trusts and estates in lower tax brackets), provided that both the
fund and the shareholder satisfy certain holding period and other requirements.
Based upon the investment policies of the Portfolio, it is expected that only a
small portion, if any, of the Portfolio's distributions would be treated as
"qualified dividend income."

          Distributions of net capital gain are taxable as long-term capital
gain, regardless of how long a shareholder has held shares in the Portfolio. Any
dividend or distribution received by a shareholder on shares of the Portfolio
will have the effect of reducing the NAV 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 or her 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 Portfolio. The investment objective of the Portfolio is such that
only a small portion, if any, of the Portfolio's distributions is expected to
qualify for the dividends-received deduction for corporate shareholders.

          After the end of the calendar year, the Portfolio will notify
shareholders of the federal income tax status of any distributions made by the
Portfolio to shareholders during such year.

          Sales and Redemptions. Any gain or loss arising from a sale or
redemption of Portfolio shares generally will be capital gain or loss if the
Portfolio shares are held as a capital asset, and will be long-term capital gain
or loss if the shareholder has held such shares for more than one year at the
time of the sale or redemption; otherwise it will be short-term capital gain or
loss. If a shareholder has held shares in the Portfolio for six months or less
and during that period has received a distribution of net capital gain, any loss
recognized by the shareholder on the sale of those shares during the six-month
period will be treated as a long-term capital loss to the extent of the
distribution. In determining the holding period of such shares for this purpose,
any period during which a shareholder's risk of loss is offset by means of
options, short sales or similar transactions is not counted.

          Any loss realized by a shareholder on a sale or exchange of shares of
the Portfolio will be disallowed to the extent the shares disposed of are
reacquired 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 reacquisition if
made within the period. If a loss is so disallowed, then such loss will be
reflected in an upward adjustment to the basis of the shares acquired.

          Qualified Plans. A dividend or capital gains distribution with respect
to shares of the Portfolio held by a tax-deferred or qualified plan, such as an
individual retirement account, section 403(b)(7) retirement plan or corporate
pension or profit-sharing plan, generally will not be taxable to the plan.
Distributions from such plans will be taxable to individual participants under
applicable tax rules without regard to the character of the income earned by the
qualified plan.

          Backup Withholding. Any distributions and redemption proceeds payable
to a shareholder may be subject to "backup withholding" tax (currently at a rate
of 28%) if such shareholder fails to provide the Portfolio with his or her
correct taxpayer identification number, fails to make certain required
certifications, or is notified by the Internal Revenue Service (the "IRS") that
he or she is subject to backup withholding. Certain categories of shareholders,
including all corporations, are exempt from such backup withholding. Backup
withholding is not an additional tax; rather, a shareholder generally may obtain
a refund of any amounts withheld under backup withholding rules that exceed such
shareholder's income tax liability by filing a refund claim with the IRS,
provided that the required information is furnished to the IRS.

          Foreign Taxes. Income received by the Portfolio also may be subject to
foreign income taxes, including taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries that entitle the
Portfolio 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 Portfolio's assets to be invested within various
countries is not known. If more than 50% of the value of the Portfolio's assets
at the close of its taxable year consists of stocks or securities of foreign
corporations (which for this purpose should include obligations issued by
foreign governments), the Portfolio will be eligible and intends to file an
election with the IRS to pass through to its shareholders the amount of foreign
taxes paid by the Portfolio. However, there can be no assurance that the
Portfolio will be able to do so. If the Portfolio makes this election, a
shareholder will be required to (i) include in gross income (in addition to
taxable dividends actually received) his or her pro rata share of foreign taxes
paid by the Portfolio, (ii) treat his or her 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 or her 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 Portfolio. No deduction for foreign taxes may be claimed by an individual
shareholder who does not itemize deductions. In addition, certain shareholders
may be subject to rules which limit or reduce their ability to fully deduct, or
claim a credit for, their pro rata share of the foreign taxes paid by the
Portfolio. A shareholder's foreign tax credit with respect to a dividend
received from the Portfolio will be disallowed unless the shareholder holds
shares in the Portfolio on the ex-dividend date and for at least 15 other days
during the 30-day period beginning 15 days prior to the ex-dividend date. Each
shareholder will be notified within 60 days after the close of the Portfolio's
taxable year whether the foreign taxes paid by the Portfolio 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.

          The federal income tax status of each year's distributions by the
Portfolio will be reported to shareholders and to the IRS. The foregoing is only
a general description of the treatment of foreign taxes under the United States
federal income tax laws. Because the availability of a foreign tax credit or
deduction will depend on the particular circumstances of each shareholder,
potential investors are advised to consult their own tax advisers.

United States Federal Income Taxation of the Portfolio
- ------------------------------------------------------

          The following discussion relates to certain significant United States
federal income tax consequences to the Portfolio with respect to the
determination of its "investment company taxable income" each year. This
discussion assumes that the Portfolio will be taxed as a regulated investment
company for each of its taxable years.

          Passive Foreign Investment Companies. If the Portfolio owns shares in
a foreign corporation that constitutes a "passive foreign investment company" (a
"PFIC") for federal income tax purposes and the Portfolio does not elect or is
unable to elect to treat such foreign corporation as a "qualified electing fund"
within the meaning of the Code, the Portfolio 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 Portfolio to its
shareholders. The Portfolio may also be subject to additional interest charges
in respect of deferred taxes arising from such distributions or gains. Any tax
paid by the Portfolio as a result of its ownership of shares in a PFIC will not
give rise to a deduction or credit to the Portfolio or to any shareholder. A
foreign corporation will be treated as a PFIC if, for the taxable year involved,
either (i) such foreign corporation 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." In some cases, the Portfolio may be able to elect to
"mark-to-market" stock in a PFIC. If the Portfolio makes such an election, the
Portfolio would include in its taxable income each year an amount equal to the
excess, if any, of the fair market value of the PFIC stock as of the close of
the taxable year over the Portfolio's adjusted basis in the PFIC stock. The
Portfolio would be allowed a deduction for the excess, if any, of the adjusted
basis of the PFIC stock over the fair market value of the PFIC stock as of the
close of the taxable year, but only to the extent of any net mark-to-market
gains included in the Portfolio's taxable income for prior taxable years. The
Portfolio's adjusted basis in the PFIC stock would be adjusted to reflect the
amounts included in, or deducted from, income under this election. Amounts
included in income pursuant to this election, as well as gain realized on the
sale or other disposition of the PFIC stock, would be treated as ordinary
income. The deductible portion of any mark-to-market loss, as well as loss
realized on the sale or other disposition of the PFIC stock to the extent that
such loss does not exceed the net mark-to-market gains previously included by
the Portfolio, would be treated as ordinary loss. The Portfolio generally would
not be subject to the deferred tax and interest charge provisions discussed
above with respect to PFIC stock for which a mark-to-market election has been
made. If the Portfolio purchases shares in a PFIC and the Portfolio elects to
treat the foreign corporation as a "qualified electing fund" under the Code, the
Portfolio may be required to include in its income each year a portion of the
ordinary income and net capital gains of such foreign corporation, even if this
income is not distributed to the Portfolio. Any such income would be subject to
the 90% and calendar year distribution requirements described above.

          Discount Obligations. Under current federal tax law, the Portfolio
will include in income as interest each year, in addition to stated interest
received on obligations held by the Portfolio, amounts attributable to the
Portfolio from holding (i) Discount Obligations and (ii) securities (including
many Brady Bonds) purchased by the Portfolio at a price less than their stated
face amount or, in the case of Discount Obligations, at a price less than their
issue price plus the portion of "original issue discount" previously accrued
thereon, i.e., purchased at a "market discount." Current federal tax law
requires a holder (such as the Portfolio) of a Discount Obligation to accrue and
include in income each year a portion of the discount at which the obligation
was purchased even though the Portfolio does not receive interest payments in
cash during the year which reflect such accrued discount. The Portfolio will
elect to likewise accrue and include in income each year a portion of the market
discount with respect to a Discount Obligation or other obligation even though
the Portfolio does not receive interest payments in cash which reflect such
accrued discount.

          As a result of the applicable rules, in order to make the
distributions necessary for the Portfolio not to be subject to federal income or
excise taxes, the Portfolio may be required to pay out as an income distribution
each year an amount significantly greater than the total amount of cash which
the Portfolio has actually received as interest during the year. Such
distributions will be made from the cash assets of the Portfolio, from
borrowings or by liquidation of portfolio securities, if necessary. If a
distribution of cash necessitates the liquidation of portfolio securities, the
Investment Adviser will select which securities to sell. The Portfolio may
realize a gain or loss from such sales. In the event the Portfolio realizes net
capital gains from such sales, shareholders may receive a larger capital gain
distribution than they would have in the absence of such sales.

          Options. Certain listed options are considered "section 1256
contracts" for federal income tax purposes. Section 1256 contracts held by the
Portfolio 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 Portfolio on
section 1256 contracts generally will be considered 60% long-term and 40%
short-term capital gain or loss. The Portfolio can elect to exempt its section
1256 contracts which are part of a "mixed straddle" (as described below) from
the application of section 1256.

          With respect to equity options or options traded on certain foreign
exchanges, gain or loss realized by the Portfolio upon the lapse or sale of such
options held by the Portfolio will be either long-term or short-term capital
gain or loss depending upon the Portfolio's holding period with respect to such
option. However, gain or loss realized upon the lapse or closing out of such
options that are written by the Portfolio will be treated as short-term capital
gain or loss. In general, if the Portfolio exercises an option, or an option
that the Portfolio 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.

          Tax Straddles. Any option, futures contract, currency swap, forward
currency exchange contract, or other position entered into or held by the
Portfolio in conjunction with any other position held by the Portfolio 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 Portfolio'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 Portfolio has unrealized gains with respect to the other position in
such straddle; (ii) the Portfolio's holding period in straddle positions be
suspended while the straddle exists (possibly resulting in gain being treated as
short-term capital gain rather than long-term capital gain); (iii) losses
recognized with respect to certain straddle positions which are part of a mixed
straddle and which are non-section 1256 positions be treated as 60% long-term
and 40% short-term capital loss; (iv) losses recognized with respect to certain
straddle positions which would otherwise constitute short-term capital losses be
treated as long-term capital losses; and (v) the deduction of interest and
carrying charges attributable to certain straddle positions may be deferred. The
Treasury Department is authorized to issue regulations providing for the proper
treatment of a mixed straddle where at least one position is ordinary and at
least one position is capital. No such regulations have yet been issued. Various
elections are available to the Portfolio, 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
Portfolio all of the offsetting positions of which consist of section 1256
contracts.

          Currency Fluctuations -- Section 988 Gains and Losses. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time the Portfolio accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time the
Portfolio 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 currency
exchange contract denominated in a foreign currency which are attributable to
fluctuations in the value of the foreign currency between the date of
acquisition of the asset and the date of disposition also are treated as
ordinary income or loss. These gains or losses, referred to under the Code as
"section 988" gains or losses, increase or decrease the amount of the
Portfolio's investment company taxable income available to be distributed to its
shareholders as ordinary income, rather than increasing or decreasing the amount
of the Portfolio's net capital gain. Because section 988 losses reduce the
amount of ordinary dividends the Portfolio 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 or her Portfolio shares. To the extent that such
distributions exceed such shareholder's basis, each will be treated as a gain
from the sale of shares.

Other Taxation
- --------------

          The Portfolio may be subject to other state and local taxes.

Taxation of Foreign Shareholders
- --------------------------------

          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 a
shareholder which is a non-resident alien individual or foreign corporation may
be substantially different. A foreign investor should therefore consult his or
her own tax adviser for further information as to the United States federal
income tax consequences of being a shareholder in the Portfolio.

- ------------------------------------------------------------------------------

                               GENERAL INFORMATION
- ------------------------------------------------------------------------------


          The Fund is a Maryland corporation organized in 1973 under the name
"Alliance Bond Fund, Inc." The Fund's name became "AllianceBernstein Bond Fund,
Inc." on March 31, 2003.

Capitalization
- --------------

          All shares of each portfolio participate equally in dividends and
distributions from that portfolio, including any distributions in the event of a
liquidation and upon redeeming shares will receive the then current NAV of the
Portfolio represented by the redeemed shares less any applicable CDSC. Each
share of the Portfolio is entitled to one vote for all purposes. Shares of the
Portfolios vote for the election of Directors and on any other matter that
affects the Portfolios in substantially the same manner as a single class,
except as otherwise required by law. 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 class.
There are no conversion or preemptive rights in connection with any shares of
the Portfolio. All shares of the Portfolio when duly issued will be fully paid
and non-assessable.

          The authorized capital stock of the Fund consists of 63,000,000,000
shares of Common Stock having a par value of $.001 per share. The authorized
capital stock of the Portfolio 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, 3,000,000,000 shares of Class R
Common Stock, 3,000,000,000 shares of Class K Common Stock, 3,000,000,000 shares
of Class I Common Stock and 3,000,000,000 shares of Advisor Class Common Stock,
each having a par value of $.001 per share. Each class of shares of the
Portfolio represents an interest in the same portfolio of investments, and has
the same rights and is identical in all respects, except that expenses related
to the distribution of each class are borne solely by each class and each class
of shares has exclusive voting rights with respect to provisions of the Rule
12b-1 Plan which pertain to a particular class and other matters for which
separate class voting is appropriate under applicable law, provided that, if the
Portfolio submits to a vote of the Class A shareholders an amendment to the Rule
12b-1 Plan that would materially increase the amount to be paid thereunder with
respect to the Class A shares, then such amendment will also be submitted to the
Class B and Advisor Class shareholders and the Class A shareholders, the Class B
shareholders and the Advisor Class shareholders will vote separately by class.

          The Fund's Board of Directors may, without shareholder approval,
increase or decrease the number of authorized but unissued shares of the
Portfolio's Class A, Class B, Class C, Class R, Class K, Class I and Advisor
Class Common Stock.

          The Board of Directors is authorized to reclassify and issue any
unissued shares to any number of additional portfolios and classes without
shareholder approval. Accordingly, the Directors in the future, for reasons such
as the desire to establish one or more additional portfolios with different
investment objectives, policies or restrictions, may create additional
portfolios of shares. Any issuance of shares of another portfolio would be
governed by the 1940 Act and the laws of the State of Maryland. If shares of
another portfolio 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
portfolio for the election of Directors and on any other matter 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 separate
portfolios.

          It is anticipated that annual shareholder meetings will not be held;
shareholder meetings will be held only when required by federal or state law.

          As of the close of business on January 7, 2005, there were 70,600,157
shares of common stock of the Portfolio outstanding. Of this amount, 41,708,672
shares were Class A shares, 18,779,498 shares were Class B shares, 10,109,908
shares were Class C shares, 1,024 shares were Class R shares and 1,055 shares
were Advisor Class shares. To the knowledge of the Portfolio, the following
persons owned of record or beneficially, 5% or more of the outstanding shares of
the Portfolio as of January 7, 2005:

                                      NO. OF                      % OF
NAME AND ADDRESS                      SHARES                      CLASS
- ----------------                      ------                      -----

Class A Shares
- --------------
MLPF&S
For the Sole Benefit
of its Customers
Attn: Fund Admin.
4800 Deer Lake
Drive East - 2nd Floor
Jacksonville, FL 32246-6484           2,530,436                   6.07%

Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052            4,644,789                  11.14%

Class B Shares
- --------------
MLPF&S
For the Sole Benefit
of its Customers
Attn: Fund Admin.
4800 Deer Lake
Drive East - 2nd Floor
Jacksonville, FL 32246-6484           2,136,191                  11.38%

Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052            2,744,897                  14.62%

First Clearing LLC
Special Custody Acct. for the
Exclusive Benefit of Customer
10750 Wheat First Dr.
Glen Allen, VA  23060-9245            1,933,600                  10.30%

Class C Shares
- --------------
MLPF&S
For the Sole Benefit
of its Customers
Attn: Fund Admin.
4800 Deer Lake
Drive East - 2nd Floor
Jacksonville, FL 32246-6484           2,395,848                  23.71%

First Clearing LLC
Special Custody Acct. for the
Exclusive Benefit of Customer
10750 Wheat First Dr.
Glen Allen, VA  23060-9245              705,333                   6.98%

Citigroup Global Markets
House Account
Attn: Cindy Tempesta
333 W. 34th St. - FL. 3
New York, NY 10001-2483                 830,526                   8.22%

Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052            1,409,038                  13.95%

Class R Shares
- --------------
Alliance Capital Management LP
Attn: Raymond Cardosi
1 N. Lexington Ave
White Plains, NY 10601-1712                 842                  82.19%

MCB Trust Services Cust FBO
Swingvote 401k Ret. Plan
700 17th Street Suite 300
Denver, CO 80202-3531                        76                   7.41%

MCB Trust Services Cust FBO
Apt. Management Associates LL
700 17th St. Ste 300
Denver, CO 60202-3531                       102                   9.98%

Advisor Class Shares
- --------------------
Frontier Trust Company
C/F Regis X Shannahan IRA
03 F Brookwood Drive
Rocky Hill, CT 06067-2741                   560                  53.09%

Frontier Trust Company
FBO Brigitte Gonzalez Roth IRA
P.O. Box 413
Hackensack, NJ 07602-0413                    55                   5.23%

Scott A. Hefler
2 Peter Looper Rd
New York, NY 10010-6723                      93                   8.81%

Frontier Trust Company
Cust FBO Michelle Lynch Roth IRA
3-06 Lambert Rd
Pair Lawn, NY 07410-1126                     80                   7.58%

Frontier Trust Company
C/f Alexander Lager Roth IRA
2214 64th Street Apt C8
Brooklyn, NY 11204-3285                      73                   6.91%

Frontier Trust Company
C/f Vera Lager Roth IRA
2214 64th St. Apt C8
Brooklyn, NY 11204-3285                      76                   7.22%

Custodian
- ---------

          State Street Bank and Trust Company ("State Street"), 225 Franklin
Street, Boston, Massachusetts 02110, acts as the Fund's custodian for the assets
of the Fund but plays no part in deciding on the purchase or sale of portfolio
securities. Subject to the supervision of the Fund's Directors, State Street may
enter into subcustodial agreements for the holding of the Fund's foreign
securities.

Principal Underwriter
- ---------------------

          ABIRM, an indirect wholly-owned subsidiary of the Investment Adviser,
located at 1345 Avenue of the Americas, New York, New York 10105, is the
principal underwriter of shares of the Portfolio, and as such may solicit orders
from the public to purchase shares of the Portfolio. Under the Agreement, the
Fund has agreed to indemnify the Principal Underwriter, in the absence of its
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, against certain civil liabilities, including liabilities
under the Securities Act.

Counsel
- -------

          Legal matters in connection with the issuance of the shares of the
Fund offered hereby are passed upon by Seward & Kissel LLP, New York, New York.

Independent Registered Public Accounting Firm
- ---------------------------------------------

          Ernst & Young LLP, 5 Times Square, New York, New York, 10036, has been
appointed as the independent registered public accounting firm for the Fund.

Additional Information
- ----------------------

          Any shareholder inquiries may be directed to the shareholder's
financial intermediary or to AGIS at the address or telephone numbers shown on
the front cover of this SAI. This SAI does not contain all the information set
forth in the Registration Statement filed by the Fund with the Commission under
the Securities Act. Copies of the Registration Statement may be obtained at a
reasonable charge from the Commission or may be examined, without charge, at the
offices of the Commission in Washington, D.C.




- ------------------------------------------------------------------------------

                            FINANCIAL STATEMENTS AND
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- ------------------------------------------------------------------------------

          The financial statements of AllianceBernstein Bond Fund, Inc. -
AllianceBernstein Corporate Bond Portfolio for the fiscal year ended September
30, 2004 and the report of Ernst & Young LLP, the independent registered public
accounting firm, are incorporated herein by reference to the Fund's annual
report. The annual report was filed on Form N-CSR with the Commission on
December 10, 2004. It is available without charge upon request by calling AGIS
at (800) 227-4618.







- ------------------------------------------------------------------------------

                                   APPENDIX A:
                            STATEMENT OF POLICIES AND
                          PROCEDURES FOR VOTING PROXIES
- ------------------------------------------------------------------------------

Introduction
- ------------

          As a registered investment adviser, Alliance Capital Management L.P.
("Alliance Capital", "we" or "us") has a fiduciary duty to act solely in the
best interests of our clients. We recognize that this duty requires us to vote
client securities in a timely manner and make voting decisions that are in the
best interests of our clients. Consistent with these obligations, we will
disclose our clients' voting records only to them and as required by mutual fund
vote disclosure regulations. In addition, the proxy committees may, after
careful consideration, choose to respond to surveys regarding past votes.

          This statement is intended to comply with Rule 206(4)-6 of the
Investment Advisers Act of 1940. It sets forth our policies and procedures for
voting proxies for our discretionary investment advisory clients, including
investment companies registered under the Investment Company Act of 1940. This
statement applies to Alliance Capital's growth and value investment groups
investing on behalf of clients in both US and non-US securities.

Proxy Policies
- --------------

          This statement is designed to be responsive to the wide range of proxy
voting subjects that can have a significant effect on the investment value of
the securities held in our clients' accounts. These policies are not exhaustive
due to the variety of proxy voting issues that we may be required to consider.
Alliance Capital reserves the right to depart from these guidelines in order to
avoid voting decisions that we believe may be contrary to our clients' best
interests. In reviewing proxy issues, we will apply the following general
policies:

Corporate Governance: Alliance Capital's proxy voting policies recognize the
importance of good corporate governance in ensuring that management and the
board of directors fulfill their obligations to the shareholders. We favor
proposals promoting transparency and accountability within a company. We will
vote for proposals providing for equal access to the proxy materials so that
shareholders can express their views on various proxy issues. We also support
the appointment of a majority of independent directors on key committees and
separating the positions of chairman and chief executive officer.

Elections of Directors: Unless there is a proxy fight for seats on the Board or
we determine that there are other compelling reasons for withholding votes for
directors, we will vote in favor of the management proposed slate of directors.
That said, we believe that directors have a duty to respond to shareholder
actions that have received significant shareholder support. We may withhold
votes for directors that fail to act on key issues such as failure to implement
proposals to declassify boards, failure to implement a majority vote
requirement, failure to submit a rights plan to a shareholder vote or failure to
act on tender offers where a majority of shareholders have tendered their
shares. In addition, we will withhold votes for directors who fail to attend at
least seventy-five percent of board meetings within a given year without a
reasonable excuse. Finally, we may withhold votes for directors of non-U.S.
issuers where there is insufficient information about the nominees disclosed in
the proxy statement.

Appointment of Auditors: Alliance Capital believes that the company remains in
the best position to choose the auditors and will generally support management's
recommendation. However, we recognize that there may be inherent conflicts when
a company's independent auditor performs substantial non-audit related services
for the company. While we will recognize that there may be special circumstances
that could lead to high non-audit fees in some years, we would normally consider
non-audit fees in excess of 70% to be disproportionate. Therefore, we may vote
against the appointment of auditors if the fees for non-audit related services
exceed 70% of the total audit fees paid by the company or there are other
reasons to question the independence of the company's auditors.

Changes in Legal and Capital Structure: Changes in a company's charter, articles
of incorporation or by-laws are often technical and administrative in nature.
Absent a compelling reason to the contrary, Alliance Capital will cast its votes
in accordance with the company's management on such proposals. However, we will
review and analyze on a case-by-case basis any non-routine proposals that are
likely to affect the structure and operation of the company or have a material
economic effect on the company. For example, we will generally support proposals
to increase authorized common stock when it is necessary to implement a stock
split, aid in a restructuring or acquisition or provide a sufficient number of
shares for an employee savings plan, stock option or executive compensation
plan. However, a satisfactory explanation of a company's intentions must be
disclosed in the proxy statement for proposals requesting an increase of greater
than one hundred percent of the shares outstanding. We will oppose increases in
authorized common stock where there is evidence that the shares will be used to
implement a poison pill or another form of anti-takeover device, or if the
issuance of new shares could excessively dilute the value of the outstanding
shares upon issuance.

Corporate Restructurings, Mergers and Acquisitions: Alliance Capital believes
proxy votes dealing with corporate reorganizations are an extension of the
investment decision. Accordingly, we will analyze such proposals on a
case-by-case basis, weighing heavily the views of the research analysts that
cover the company and the investment professionals managing the portfolios in
which the stock is held.

Proposals Affecting Shareholder Rights: Alliance Capital believes that certain
fundamental rights of shareholders must be protected. We will generally vote in
favor of proposals that give shareholders a greater voice in the affairs of the
company and oppose any measure that seeks to limit those rights. However, when
analyzing such proposals we will weigh the financial impact of the proposal
against the impairment of shareholder rights.

Anti-Takeover Measures: Alliance Capital believes that measures that impede
takeovers or entrench management not only infringe on the rights of shareholders
but may also have a detrimental effect on the value of the company. We will
generally oppose proposals, regardless of whether they are advanced by
management or shareholders, the purpose or effect of which is to entrench
management or dilute shareholder ownership. Conversely, we support proposals
that would restrict or otherwise eliminate anti-takeover measures that have
already been adopted by corporate issuers. For example, we will support
shareholder proposals that seek to require the company to submit a shareholder
rights plan to a shareholder vote. We will evaluate, on a case-by-case basis,
proposals to completely redeem or eliminate such plans. Furthermore, we will
generally oppose proposals put forward by management (including blank check
preferred stock, classified boards and supermajority vote requirements) that
appear to be intended as management entrenchment mechanisms.

Executive Compensation: Alliance Capital believes that company management and
the compensation committee of the board of directors should, within reason, be
given latitude to determine the types and mix of compensation and benefit awards
offered. Whether proposed by a shareholder or management, we will review
proposals relating to executive compensation plans on a case-by-case basis to
ensure that the long-term interests of management and shareholders are properly
aligned. We will analyze the proposed plans to ensure that shareholder equity
will not be excessively diluted, the option exercise price is not below market
price on the date of grant and an acceptable number of employees are eligible to
participate in such programs. We will generally oppose plans that permit
repricing of underwater stock options without shareholder approval. Other
factors such as the company's performance and industry practice will generally
be factored into our analysis. We will support proposals to submit severance
packages that do not exceed 2.99 times the sum of an executive officer's base
salary plus bonus that are triggered by a change in control to a shareholder
vote. Finally, we will support shareholder proposals requiring companies to
expense stock options because we view them as a large corporate expense.

Social and Corporate Responsibility: Alliance Capital will review and analyze on
a case-by-case basis proposals relating to social, political and environmental
issues to determine whether they will have a financial impact on shareholder
value. We will vote against proposals that are unduly burdensome or result in
unnecessary and excessive costs to the company. We may abstain from voting on
social proposals that do not have a readily determinable financial impact on
shareholder value.

Proxy Voting Procedures
Proxy Voting Committees

          Our growth and value investment groups have formed separate proxy
voting committees to establish general proxy policies for Alliance Capital and
consider specific proxy voting matters as necessary. These committees
periodically review these policies and new types of corporate governance issues,
and decide how we should vote on proposals not covered by these policies. When a
proxy vote cannot be clearly decided by an application of our stated policy, the
proxy committee will evaluate the proposal. In addition, the committees, in
conjunction with the analyst that covers the company, may contact corporate
management and interested shareholder groups and others as necessary to discuss
proxy issues. Members of the committee include senior investment personnel and
representatives of the Legal and Compliance Department. The committees may also
evaluate proxies where we face a potential conflict of interest (as discussed
below). Finally, the committees monitor adherence to these policies.

Conflicts of Interest
- ---------------------

          Alliance Capital recognizes that there may be a potential conflict of
interest when we vote a proxy solicited by an issuer whose retirement plan we
manage, or we administer, who distributes Alliance Capital sponsored mutual
funds, or with whom we or an employee has another business or personal
relationship that may affect how we vote on the issuer's proxy. Similarly,
Alliance may have a potential material conflict of interest when deciding how to
vote on a proposal sponsored or supported by a shareholder group that is a
client. We believe that centralized management of proxy voting, oversight by the
proxy voting committees and adherence to these policies ensures that proxies are
voted with only our clients' best interests in mind. That said, we have
implemented additional procedures to ensure that our votes are not the product
of a material conflict of interests, including: (i) on an annual basis, the
proxy committees will take reasonable steps to evaluate the nature of Alliance
Capital's and our employees' material business and personal relationships (and
those of our affiliates) with any company whose equity securities are held in
client accounts and any client that has sponsored or has material interest in a
proposal upon which we will be eligible to vote; (ii) requiring anyone involved
in the decision making process to disclose to the chairman of the appropriate
proxy committee any potential conflict that they are aware of (including
personal relationships) and any contact that they have had with any interested
party regarding a proxy vote; (iii) prohibiting employees involved in the
decision making process or vote administration from revealing how we intend to
vote on a proposal in order to reduce any attempted influence from interested
parties; and (iv) where a material conflict of interests exists, reviewing our
proposed vote by applying a series of objective tests and, where necessary,
considering the views of a third party research service to ensure that our
voting decision is consistent with our clients' best interests.

          Because under certain circumstances Alliance Capital considers the
recommendation of third party research services, the proxy committees will take
reasonable steps to verify that any third party research service is in fact
independent based on all of the relevant facts and circumstances. This includes
reviewing the third party research service's conflict management procedures and
ascertaining, among other things, whether the third party research service (i)
has the capacity and competency to adequately analyze proxy issues; and (ii) can
make such recommendations in an impartial manner and in the best interests of
our clients.

Proxies of Certain Non-US Issuers
- ---------------------------------

          Proxy voting in certain countries requires "share blocking."
Shareholders wishing to vote their proxies must deposit their shares shortly
before the date of the meeting (usually one-week) with a designated depositary.
During this blocking period, shares that will be voted at the meeting cannot be
sold until the meeting has taken place and the shares are returned to the
clients' custodian banks. Alliance Capital may determine that the benefit to the
client of exercising the vote does not outweigh the cost of voting, which is not
being able to transact in the shares during this period. Accordingly, if share
blocking is required we may abstain from voting those shares.

          In addition, voting proxies of issuers in non-US markets may give rise
to a number of administrative issues that may prevent Alliance Capital from
voting such proxies. For example, Alliance Capital may receive meeting notices
without enough time to fully consider the proxy or after the cut-off date for
voting. Other markets require Alliance Capital to provide local agents with
power of attorney prior to implementing Alliance Capital's voting instructions.
Although it is Alliance Capital's policy to seek to vote all proxies for
securities held in client accounts for which we have proxy voting authority, in
the case of non-US issuers, we vote proxies on a best efforts basis.

Proxy Voting Records
- --------------------

          You may obtain information regarding how the Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30, without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's web
site at www.sec.gov, or call AllianceBernstein at (800) 227-4618.


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