AllianceBernstein Bond Fund, Inc. - AB Tax-Aware Fixed Income Portfolio



TABLE OF CONTENTS
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                                                               Page
SUMMARY INFORMATION...........................................   4

ADDITIONAL INFORMATION ABOUT THE FUND'S RISKS AND INVESTMENTS.   8

INVESTING IN THE FUND.........................................  15

  How to Buy Shares...........................................  15

  The Different Share Class Expenses..........................  16

  Sales Charge Reduction Programs for Class A Shares..........  17

  CDSC Waivers and Other Programs.............................  18

  Choosing a Share Class......................................  18

  Payments to Financial Advisors and Their Firms..............  19

  How to Exchange Shares......................................  20

  How to Sell or Redeem Shares................................  20

  Frequent Purchases and Redemptions of Fund Shares...........  21

  How the Fund Values Its Shares..............................  22

MANAGEMENT OF THE FUND........................................  24

DIVIDENDS, DISTRIBUTIONS AND TAXES............................  27

GENERAL INFORMATION...........................................  28

GLOSSARY......................................................  29

FINANCIAL HIGHLIGHTS..........................................  30

APPENDIX A--HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION... A-1



SUMMARY INFORMATION
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ALLIANCEBERNSTEIN TAX-AWARE FIXED INCOME PORTFOLIO
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INVESTMENT OBJECTIVE:
The investment objective of the Fund is to seek to maximize after-tax return
and income.

FEES AND EXPENSES OF THE FUND:
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund. You may qualify for sales charge reductions if you and
members of your family invest, or agree to invest in the future, at least
$100,000 in AllianceBernstein Mutual Funds. More information about these and
other discounts is available from your financial intermediary and in "Investing
in the Fund--Sales Charge Reduction Programs for Class A Shares", page 17 of
this Prospectus, and in "Purchase of Shares--Sales Charge Reduction Programs
for Class A Shares", page 80 of the Fund's Statement of Additional Information
("SAI").

SHAREHOLDER FEES (fees paid directly from your investment)

                                                                                CLASS A  CLASS C   ADVISOR CLASS
                                                                                SHARES   SHARES       SHARES
----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)                                              3.00%      None       None
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Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)   None(a)  1.00%(b)     None
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Exchange Fee                                                                     None       None       None

ANNUAL FUND OPERATING EXPENSES (expenses that you pay each year as a percentage
of the value of your investment)

                                                                                    CLASS A CLASS C ADVISOR CLASS
-----------------------------------------------------------------------------------------------------------------
Management Fees                                                                       .50%    .50%       .50%
Distribution and/or Service (12b-1) Fees                                              .30%   1.00%       None
Other Expenses:
  Transfer Agent                                                                      .02%    .02%       .02%
  Other Expenses                                                                      .42%    .42%       .42%
                                                                                    ------  ------     ------
Total Other Expenses(c)                                                               .44%    .44%       .44%
                                                                                    ------  ------     ------
Total Annual Fund Operating Expenses                                                 1.24%   1.94%       .94%
                                                                                    ======  ======     ======
Fee Waiver and/or Expense Reimbursement(d)                                          (.39)%  (.39)%     (.39)%
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement    .85%   1.55%       .55%
                                                                                    ======  ======     ======
-----------------------------------------------------------------------------------------------------------------

(a)Purchases of Class A shares in amounts of $1,000,000 or more, or by certain
   group retirement plans, may be subject to a 1%, 1-year contingent deferred
   sales charge, or CDSC, which may be subject to waiver in certain
   circumstances.

(b)For Class C shares, the CDSC is 0% after the first year.

(c)Total Other Expenses are based on the estimated amounts for the current
   fiscal year.

(d)The Adviser has contractually agreed to waive its management fees and/or to
   bear expenses of the Fund through December 11, 2014 to the extent necessary
   to prevent total Fund operating expenses (excluding expenses associated with
   securities sold short, acquired fund fees and expenses other than the
   advisory fees of any AllianceBernstein Mutual Funds in which the Fund may
   invest, interest expense, taxes, extraordinary expenses, and brokerage
   commissions and other transaction costs), on an annualized basis, from
   exceeding .85%, 1.55% and .55% of average daily net assets, respectively,
   for Class A, Class C and Advisor Class shares ("expense limitations"). Any
   fees waived and expenses borne by the Adviser may be reimbursed by the Fund
   until December 11, 2016, provided that no reimbursement payment will be made
   that would cause the Fund's Total Annual Fund Operating Expenses to exceed
   the expense limitations or cause the total of the payments to exceed the
   Fund's total initial offering expenses.

EXAMPLES
The Examples are intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Examples assume that you
invest $10,000 in the Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The Examples also assume that your
investment has a 5% return each year, that the Fund's operating expenses stay
the same and that the fee waiver remains in effect as agreed upon. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:

               CLASS A CLASS C ADVISOR CLASS
--------------------------------------------
After 1 Year    $384    $158*      $ 56
After 3 Years   $644    $571       $261
--------------------------------------------

*Assuming redemption at the end of the period, a 1% CDSC would increase the
 expenses by approximately $100.

4




PORTFOLIO TURNOVER
The Fund pays transaction costs, such as commissions, when it buys or sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These transaction costs, which are not
reflected in the Annual Fund Operating Expenses or in the Examples, affect the
Fund's performance.

PRINCIPAL STRATEGIES:
The Fund pursues its objective by investing principally in a national portfolio
of both municipal and taxable fixed-income securities. The Fund invests, under
normal circumstances, at least 80% of its net assets in fixed-income
securities. The Fund also invests, under normal circumstances, at least 65% of
its total assets in municipal securities that pay interest that is exempt from
Federal income tax. These securities may pay interest that is subject to the
Federal alternative minimum tax ("AMT") for certain taxpayers. The income
earned and distributed to shareholders on non-municipal securities would not be
exempt from Federal income tax. The Fund may invest in fixed-income securities
rated below investment grade (commonly known as "junk bonds"), although such
securities are not expected to be the Fund's primary focus.

The Adviser selects securities for the Fund based on a variety of factors,
including credit quality, maturity, diversification benefits, and the relative
expected after-tax returns of taxable and municipal securities (considering
Federal tax rates and without regard to state and local income taxes). As the
objective is to increase the after-tax return of the portfolio, an investor in
the Fund may incur a tax liability that will generally be greater than the same
investor would have in a fund investing exclusively in municipal securities,
and that will be higher if the investor is in a higher tax bracket. In
addition, the tax implications of the Fund's trading activity, such as
realizing taxable gains, are considered in making purchase and sale decisions
for the Fund. The Fund may invest in fixed-income securities of any maturity
from short- to long-term.

The Fund may also invest in forward commitments, zero-coupon municipal
securities and variable, floating and inverse floating-rate municipal
securities.

The Fund may use derivatives, such as swaps, options, futures, and forwards, to
achieve its investment strategies. For example, the Fund may enter into tender
option bonds ("TOBs") and credit default and interest rate swaps relating to
municipal and taxable fixed-income securities or securities indices.
Derivatives may provide more efficient and economical exposure to fixed-income
securities markets than direct investments.

PRINCIPAL RISKS:
.  MARKET RISK: The value of the Fund's assets will fluctuate as the bond
   market fluctuates. The value of the Fund's investments may decline,
   sometimes rapidly and unpredictably, simply because of economic changes or
   other events that affect large portions of the market.

.  CREDIT RISK: An issuer or guarantor of a fixed-income security, or the
   counterparty to a derivatives or other contract, may be unable or unwilling
   to make timely payments of interest or principal, or to otherwise honor its
   obligations. The issuer or guarantor may default, causing a loss of the full
   principal amount of a security. The degree of risk for a particular security
   may be reflected in its credit rating. There is the possibility that the
   credit rating of a fixed-income security may be downgraded after purchase,
   which may adversely affect the value of the security.

.  BELOW INVESTMENT GRADE SECURITIES RISK: Investments in fixed-income
   securities with lower ratings are subject to higher probability that an
   issuer will default or fail to meet its payment obligations. These
   securities may be subject to greater price volatility due to such factors as
   specific municipal or corporate developments, negative performance of the
   junk bond market generally and less secondary market liquidity.

.  MUNICIPAL MARKET RISK: This is the risk that special factors may adversely
   affect the value of municipal securities and have a significant effect on
   the yield or value of the Fund's investments in municipal securities. These
   factors include economic conditions, political or legislative changes,
   uncertainties related to the tax status of municipal securities, or the
   rights of investors in these securities. To the extent that the Fund invests
   more of its assets in a particular state's municipal securities, the Fund
   may be vulnerable to events adversely affecting that state, including
   economic, political and regulatory occurrences, court decisions, terrorism
   and catastrophic natural disasters, such as hurricanes or earthquakes. The
   Fund's investments in certain municipal securities with principal and
   interest payments that are made from the revenues of a specific project or
   facility, and not general tax revenues, may have increased risks. Factors
   affecting the project or facility, such as local business or economic
   conditions, could have a significant effect on the project's ability to make
   payments of principal and interest on these securities.

.  TAX RISK: From time to time, the U.S. Government and the U.S. Congress
   consider changes in federal tax law that could limit or eliminate the
   federal tax exemption for municipal bond income, which would in effect
   reduce the income received by shareholders from the Fund by increasing taxes
   on that income. In such event, the Fund's net asset value, or NAV could also
   decline as yields on municipal bonds, which are typically lower than those
   on taxable bonds, would be expected to increase to approximately the yield
   of comparable taxable bonds. Actions or anticipated actions affecting the
   tax exempt status of municipal bonds could also result in significant
   shareholder redemptions of Fund shares as investors anticipate adverse
   effects on the Fund or seek higher yields to offset the potential loss of
   the tax deduction. As a result, the Fund would be required to maintain
   higher levels of cash to meet the redemptions, which would negatively affect
   the Fund's yield.

                                                                             5




.  INTEREST RATE RISK: Changes in interest rates will affect the value of
   investments in fixed-income securities. When interest rates rise, the value
   of investments in fixed-income securities tends to fall and this decrease in
   value may not be offset by higher income from new investments. Interest rate
   risk is generally greater for fixed-income securities with longer maturities
   or durations.

.  DURATION RISK: Duration is a measure that relates the expected price
   volatility of a fixed-income security to changes in interest rates. The
   duration of a fixed-income security may be shorter than or equal to full
   maturity of a fixed-income security. Fixed-income securities with longer
   durations have more risk and will decrease in price as interest rates rise.
   For example, a fixed-income security with a duration of three years will
   decrease in value by approximately 3% if interest rates increase by 1%.

.  INFLATION RISK: This is the risk that the value of assets or income from
   investments will be less in the future as inflation decreases the value of
   money. As inflation increases, the value of the Fund's assets can decline as
   can the value of the Fund's distributions. This risk is significantly
   greater for fixed-income securities with longer maturities.

.  LIQUIDITY RISK: Liquidity risk exists when particular investments are
   difficult to purchase or sell, possibly preventing the Fund from selling out
   of these illiquid securities at an advantageous price. Derivatives and
   securities involving substantial market and credit risk tend to involve
   greater liquidity risk. The Fund is subject to liquidity risk because the
   market for municipal securities is generally smaller than many other markets.

.  DERIVATIVES RISK: Derivatives may be illiquid, difficult to price, and
   leveraged so that small changes may produce disproportionate losses for the
   Fund, and may be subject to counterparty risk to a greater degree than more
   traditional investments.

.  MANAGEMENT RISK: The Fund is subject to management risk because it is an
   actively-managed investment fund. The Adviser will apply its investment
   techniques and risk analyses in making investment decisions, but there is no
   guarantee that its techniques will produce the intended results.

As with all investments, you may lose money by investing in the Fund.

PERFORMANCE INFORMATION:
No performance information is available for the Fund because it has not yet
been in operation for a full calendar year.

INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Fund.

PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of
the Fund's portfolio:

EMPLOYEE                 LENGTH OF SERVICE  TITLE
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R.B. (Guy) Davidson III     Since 2013      Senior Vice President of the Adviser

Jon P. Denfeld              Since 2013      Vice President of the Adviser

Terrance T. Hults           Since 2013      Senior Vice President of the Adviser

Shawn E. Keegan             Since 2013      Vice President of the Adviser

6



PURCHASE AND SALE OF FUND SHARES

PURCHASE MINIMUMS

                                                                      INITIAL               SUBSEQUENT
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Class A/Class C Shares, including traditional IRAs and Roth IRAs       $2,500                  $50
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Automatic Investment Program                                         No minimum                $50
                                                                                 If initial minimum investment is
                                                                                   less than $2,500, then $200
                                                                                  monthly until account balance
                                                                                          reaches $2,500
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Advisor Class Shares (only available to fee-based programs or           None                   None
through other limited arrangements)
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You may sell (redeem) your shares each day the New York Stock Exchange (the
"Exchange") is open. You may sell your shares through your financial
intermediary or by mail (AllianceBernstein Investor Services, Inc., P.O. Box
786003, San Antonio, TX 78278-6003) or telephone (800-221-5672).

     .   TAX INFORMATION

The Fund may pay income dividends or make capital gains distributions, which
may be subject to federal income taxes and taxable as ordinary income or
capital gains, and may also be subject to state and local taxes.

     .   PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES

If you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
financial intermediary and your salesperson to recommend the Fund over another
investment. Ask your salesperson or visit your financial intermediary's website
for more information.

                                                                             7



ADDITIONAL INFORMATION ABOUT THE FUND'S RISKS AND INVESTMENTS
--------------------------------------------------------------------------------

This section of the Prospectus provides additional information about the Fund's
investment practices and related risks. Most of these investment practices are
discretionary, which means that the Adviser may or may not decide to use them.
This Prospectus does not describe all of the Fund's investment practices and
additional descriptions of the Fund's risks and investments can be found in the
Fund's SAI.

MUNICIPAL SECURITIES
The two principal classifications of municipal securities are bonds and notes.
Municipal bonds are intended to meet longer-term capital needs while municipal
notes are intended to fulfill short-term capital needs. Municipal notes
generally have original maturities not exceeding one year. Municipal notes
include tax anticipation notes, revenue anticipation notes, bond anticipation
notes, variable rate demand obligations, and tax-exempt commercial paper.

Municipal bonds are typically classified as "general obligation" or "revenue"
or "special obligation" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith, credit, and taxing power for the payment of
principal and interest. Revenue or special obligation bonds are payable only
from the revenues derived from a particular facility or class of facilities or,
in some cases, from the proceeds of a special excise or other tax, but not from
general tax revenues. The Fund may invest in revenue bonds, which generally do
not have the pledge of the credit of the issuer. The payment of the principal
and interest on revenue bonds is dependent solely on the ability of the user of
the facilities financed by the bonds to meet its financial obligations and the
pledge, if any, of real and personal property financed as security for such
payment. The Fund may invest more than 25% of its total assets in securities or
obligations that are related in such a way that business or political
developments or changes affecting one such security could also affect the
others (for example, securities with interest that is paid from projects of a
similar type).

The Fund may invest in municipal lease obligations. A municipal lease
obligation is not backed by the full faith and credit of the issuing
municipality, but is usually backed by the municipality's pledge to make annual
appropriations for lease payments. Thus, it is possible that a municipality
will not appropriate money for lease payments. Additionally, some municipal
lease obligations may allow for lease cancellation prior to the maturity date
of the security. Municipal lease obligations may be less readily marketable
than other municipal securities and some may be illiquid.

The Fund may invest in municipal securities of issuers in Puerto Rico or other
U.S. territories, which are exempt from federal, state, and, where applicable,
local income taxes. These municipal securities may have more risks than those
of U.S. issuers generally. Like many U.S. states and municipalities, Puerto
Rico, in particular, experienced a significant downturn during the recent
recession. As a result of Puerto Rico's challenging economic and fiscal
environment, many ratings organizations have downgraded a number of municipal
securities issued in Puerto Rico or placed them on a "negative watch". If the
economic situation in Puerto Rico persists or worsens, the volatility and
credit quality of Puerto Rican municipal securities could be adversely affected.

Current federal tax law distinguishes between municipal securities issued to
finance certain private activities ("private activity bonds") and other
municipal securities. Private activity bonds, most of which are AMT-Subject
bonds and are also revenue bonds, include bonds issued to finance such projects
as airports, housing projects, resource recovery programs, solid waste disposal
facilities, and student loan programs. Bonds of certain sectors have special
risks. For example, the health-care industry can be affected by federal or
state legislation, electric utilities are subject to governmental regulation,
and private-activity bonds are not government-backed. Attempts to restructure
the tax system may have adverse effects on the value of municipal securities or
make them less attractive to investors relative to taxable treatments.

UNRATED SECURITIES
Unrated municipal securities may be purchased by the Fund when the Adviser
believes that the financial condition of the issuers of such obligations or the
protections afforded by their terms limit risk to a level comparable to that of
rated securities that are consistent with the Fund's investment policies.

INSURED SECURITIES
The Fund may purchase municipal securities that are insured as to the payment
of principal and interest under policies issued by certain insurance companies.
Historically, insured municipal securities typically received a higher credit
rating, which meant that the issuer of the securities paid a lower interest
rate. As a result of declines in the credit quality and associated downgrades
of most insurers, insurance has less value than it did in the past. The market
now values insured municipal securities primarily based on the credit quality
of the issuer of the security with little value given to the insurance feature.
In purchasing such insured securities, the Adviser evaluates the risk and
return of municipal securities through its own research.

If an insurance company's rating is downgraded or the company becomes
insolvent, the prices of municipal securities insured by the insurance company
may decline. The Adviser believes that downgrades in insurance company ratings
or insurance company insolvencies will present limited risk to the Fund. The
underlying credit quality of the issuers of the insured municipal securities
(generally investment grade) reduces the risk of a significant reduction in the
value of the insured municipal security.

DERIVATIVES
The Fund may, but is not required to, use derivatives for hedging or risk
management purposes or as part of its investment strategies. Derivatives are
financial contracts whose value depends on, or is derived from, the value of an
underlying asset, reference rate or index. The Fund may use derivatives to earn

8



income and enhance returns, to hedge or adjust the risk profile of its
investments, to replace more traditional direct investments and to obtain
exposure to otherwise inaccessible markets.

There are four principal types of derivatives--options, futures, forwards and
swaps--each of which is described below. Derivatives include listed and cleared
transactions where the Fund's derivative trade counterparty is an exchange or
clearinghouse and non-cleared bilateral "over-the-counter" transactions, where
the Fund's derivative trade counterparty is a financial institution.
Exchange-traded or cleared derivatives transactions tend to be more liquid and
subject to counterparty less credit risk than those that are privately
negotiated.

The Fund's use of derivatives may involve risks that are different from, or
possibly greater than, the risks associated with investing directly in
securities or other more traditional instruments. These risks include the risk
that the value of a derivative instrument may not correlate perfectly, or at
all, with the value of the assets, reference rates, or indices that they are
designed to track. Other risks include the possible absence of a liquid
secondary market for a particular instrument and possible exchange-imposed
price fluctuation limits, either of which may make it difficult or impossible
to close out a position when desired and the risk that the counterparty will
not perform its obligations. Certain derivatives may have a leverage component
and involve leverage risk. Adverse changes in the value or level of the
underlying asset, note or index can result in a loss substantially greater than
the Fund's investment (in some cases, the potential loss is unlimited).

The Fund's investments in derivatives may include, but are not limited to, the
following:

.  FORWARD CONTRACTS. A forward contract is an agreement that obligates one
   party to buy, and the other party to sell, a specific quantity of an
   underlying commodity or other tangible asset for an agreed-upon price at a
   future date. A forward contract generally is settled by physical delivery of
   the commodity or tangible asset to an agreed-upon location (rather than
   settled by cash) or is rolled forward into a new forward contract, or in the
   case of a non-deliverable forward, by a cash payment at maturity.

.  FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. A futures contract is a
   standardized, exchange-traded agreement that obligates the buyer to buy and
   the seller to sell a specified quantity of an underlying asset (or settle
   for cash the value of a contract based on an underlying asset, rate, or
   index) at a specific price on the contract maturity date. Options on futures
   contracts are options that call for the delivery of futures contracts upon
   exercise. Futures contracts that the Fund may buy and sell may include
   futures contracts on municipal securities, U.S. Government securities and
   contracts based on any index of municipal securities, U.S. Government
   securities, or financial indices or reference rates.

.  OPTIONS. An option is an agreement that, for a premium payment or fee, gives
   the option holder (the buyer) the right but not the obligation to buy (a
   "call option") or sell (a "put option") the underlying asset (or settle for
   cash an amount based on an underlying asset, rate, or index) at a specified
   price (the exercise price) during a period of time or on a specified date.
   Investments in options are considered speculative. The Fund may lose the
   premium paid for them if the price of the underlying security or other asset
   decreased or remained the same (in the case of a call option) or increased
   or remained the same (in the case of a put option). If a put or call option
   purchased by the Fund were permitted to expire without being sold or
   exercised, its premium would represent a loss to the Fund. The Fund's
   investments in options include the following:

 - Options on Securities. In an effort to increase current income and to reduce
   fluctuations in NAV, the Fund may write covered or uncovered put and call
   options and purchase put and call options on fixed-income securities and
   financial indices or reference rates. The Fund may also enter into options
   on the yield "spread" or yield differential between two securities. In
   contrast to other types of options, this option is based on the difference
   between the yields of designated securities, futures or other instruments.
   In addition, the Fund may write covered straddles. A straddle is a
   combination of a call and a put written on the same underlying security. In
   purchasing an option on securities, the Fund would be in a position to
   realize a gain if, during the option period, the price of the underlying
   securities increased (in the case of a call) or decreased (in the case of a
   put) by an amount in excess of the premium paid; otherwise the Fund would
   experience a loss not greater than the premium paid for the option. Thus,
   the Fund would realize a loss if the price of the underlying security
   declined or remained the same (in the case of a call) or increased or
   remained the same (in the case of a put) or otherwise did not increase (in
   the case of a put) or decrease (in the case of a call) by more than the
   amount of the premium. If a put or call option purchased by the Fund were
   permitted to expire without being sold or exercised, its premium would
   represent a loss to the Fund.

   If the Fund purchases or writes privately-negotiated options on securities,
   it will effect such transactions only with investment dealers and other
   financial institutions (such as commercial banks or savings and loan
   institutions) deemed creditworthy by the Adviser. The Adviser has adopted
   procedures for monitoring the creditworthiness of such counterparties.

 - Options on Securities Indices. An option on a securities index is similar to
   an option on a security except that, rather than taking or making delivery
   of a security at a specified price, an option on a securities index gives
   the holder the right to receive, upon exercise of the option, an amount of
   cash if the closing level of the chosen index is greater than (in the case
   of a call) or less than (in the case of a put) the exercise price of the
   option.

.  SWAP TRANSACTIONS. A swap is an agreement that obligates two parties to
   exchange a series of cash flows at specified intervals (payment dates) based
   upon or calculated by reference to changes in specified prices or rates
   (e.g., interest rates

                                                                             9



  in the case of interest rate swaps) for a specified amount of an underlying
  asset (the "notional" principal amount). Generally, the notional principal
  amount is used solely to calculate the payment stream, but is not exchanged.
  Most swaps are entered into on a net basis (i.e., the two payment streams are
  netted out, with the Fund receiving or paying, as the case may be, only the
  net amount of the two payments). Payments received by the Fund from swap
  agreements will result in taxable income, either as ordinary income or
  capital gains, rather than tax-exempt income, which will increase the amount
  of taxable distributions received by shareholders. Certain standardized
  swaps, including certain interest rate swaps and credit default swaps, are
  (or soon will be) subject to mandatory central clearing. Cleared swaps are
  transacted through futures commission merchants ("FCMs") that are members of
  central clearinghouses with the clearinghouse serving as central
  counterparty, similar to transactions in futures contracts. Funds post
  initial and variation margin to support their obligations under cleared swaps
  by making payments to their clearing member FCMs. Central clearing is
  expected to reduce counterparty credit risks and increase liquidity, but
  central clearing does not make swap transactions risk free. Centralized
  clearing will be required for additional categories of swaps on a phased-in
  basis based on Commodity Futures Trading Commission ("CFTC") approval of
  contracts for central clearing. Bilateral swap agreements are two-party
  contracts entered into primarily by institutional investors and are not
  cleared through a third party. The Fund's investments in swap transactions
  include the following:


 - Interest Rate Swaps, Swaptions, Caps and Floors. Interest rate swaps involve
   the exchange by the Fund with another party of payments calculated by
   reference to specified interest rates (e.g., an exchange of floating-rate
   payments for fixed-rate payments). Unless there is a counterparty default,
   the risk of loss to the Fund from interest rate swap transactions is limited
   to the net amount of interest payments that the Fund is contractually
   obligated to make. If the counterparty to an interest rate swap transaction
   defaults, the Fund's risk of loss consists of the net amount of interest
   payments that the Fund contractually is entitled to receive.

   An option on a swap agreement, also called a "swaption", is an option that
   gives the buyer the right, but not the obligation, to enter into a swap on a
   future date in exchange for paying a market-based "premium". A receiver
   swaption gives the owner the right to receive the total return of a
   specified asset, reference rate, or index. A payer swaption gives the owner
   the right to pay the total return of a specified asset, reference rate, or
   index. Swaptions also include options that allow an existing swap to be
   terminated or extended by one of the counterparties.

   The purchase of an interest rate cap entitles the purchaser, to the extent
   that a specified index exceeds a predetermined interest rate, to receive
   payments of interest on a contractually-based principal amount from the
   party selling the interest rate cap. The purchase of an interest rate floor
   entitles the purchaser, to the extent that a specified index falls below a
   predetermined interest rate, to receive payments of interest on an agreed
   principal amount from the party selling the interest rate floor. Caps and
   floors may be less liquid than swaps.

   There is no limit on the amount of interest rate transactions that may be
   entered into by the Fund. The value of these transactions will fluctuate
   based on changes in interest rates.

   Interest rate swap, swaption, cap or floor transactions may be used to
   preserve a return or spread on a particular investment or portion of the
   Fund's portfolio or to protect against an increase in the price of
   securities the Fund anticipates purchasing at a later date. Interest rate
   swaps may also be used to leverage the Fund's investments by creating
   positions that are functionally similar to purchasing a municipal or other
   fixed-income security but may only require payments to a swap counterparty
   under certain circumstances and allow the Fund to efficiently increase (or
   decrease) its duration and income.

 - Inflation (CPI) Swaps. Inflation swap agreements are contracts in which one
   party agrees to pay the cumulative percentage increase in a price index (the
   Consumer Price Index with respect to CPI swaps) over the term of the swap
   (with some lag on the inflation index), and the other pays a compounded
   fixed rate. Inflation swap agreements may be used to protect the NAV of the
   Fund against an unexpected change in the rate of inflation measured by an
   inflation index since the value of these agreements may be expected to
   increase if unexpected inflation increases. The Fund will enter into
   inflation swaps on a net basis. The values of inflation swap agreements are
   expected to change in response to changes in real interest rates. Real
   interest rates are tied to the relationship between nominal interest rates
   and the rate of inflation. If nominal interest rates increase at a faster
   rate than inflation, real interest rates may rise, leading to a decrease in
   value of an inflation swap agreement.

 - 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 restructuring. The Fund may be either the buyer
   or seller in the transaction. As a seller, the Fund receives a fixed rate of
   income throughout the term of the contract, which typically is between one
   month and ten years, provided that no credit event occurs. If a credit event
   occurs, the Fund typically must pay the contingent payment to the buyer,
   which will be either (i) the "par value" (face amount) of the reference
   obligation in which case the Fund will receive the reference obligation in
   return or (ii) an amount equal to the difference between the par value and
   the current market value of the reference

10



   obligation. The periodic payments previously received by the Fund, coupled
   with the value of any reference obligation received, may be less than the
   full amount it pays to the buyer, resulting in a loss to the Fund. If the
   reference obligation is a defaulted security, physical delivery of the
   security will cause the Fund to hold a defaulted security. If the Fund is a
   buyer and no credit event occurs, the Fund will lose its periodic stream of
   payments over the term of the contract. 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 Fund had invested
   in the reference obligation directly. Credit default swaps are subject to
   general market risk, liquidity risk and credit risk.

FORWARD COMMITMENTS
The Fund may purchase or sell fixed-income securities on a forward commitment
basis. Forward commitments for the purchase or sale of securities may include
purchases on a "when-issued" basis or purchases or sales on a "delayed
delivery" basis. In some cases, a forward commitment may be conditioned upon
the occurrence of a subsequent event, such as approval and consummation of a
merger, corporate reorganization or debt restructuring or approval of a
proposed financing by appropriate authorities (i.e., a "when, as and if issued"
trade).

When forward commitments with respect to fixed-income securities are
negotiated, the price, which is generally expressed in yield terms, is fixed at
the time the commitment is made, but payment for and delivery of the securities
take place at a later date. Securities purchased or sold under a forward
commitment are subject to market fluctuation, and no interest or dividends
accrue to the purchaser prior to the settlement date. There is the risk of loss
if the value of either a purchased security declines before the settlement date
or the security sold increases before the settlement date. The use of forward
commitments helps the Fund to protect against anticipated changes in interest
rates and prices.

ILLIQUID SECURITIES
Under current Securities and Exchange Commission (the "Commission") guidelines,
the Fund limits its investments in illiquid securities to 15% of its net
assets. The term "illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of business at
approximately the amount the Fund has valued the securities. If the Fund
invests in illiquid securities, it may not be able to sell such securities and
may not be able to realize their full value upon sale. Restricted securities
(securities subject to legal or contractual restrictions on resale) may be
illiquid. Some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 or certain commercial paper) may be
treated as liquid, although they may be less liquid than registered securities
traded on established secondary markets.

INVESTMENT IN BELOW INVESTMENT GRADE SECURITIES
The Fund may invest in below investment grade taxable and tax-exempt
securities. Investments in these securities may be subject to greater risk of
loss of principal and interest than higher-rated securities. These securities
are also generally considered to be subject to greater market risk than
higher-rated securities. The capacity of issuers of these securities to pay
interest and repay principal is more likely to weaken than is that of issuers
of higher-rated securities in times of deteriorating economic conditions or
rising interest rates. In addition, below investment grade securities may be
more susceptible to real or perceived adverse economic conditions than
investment grade securities.

The market for these securities may be thinner and less active than that for
higher-rated securities, which can adversely affect the prices at which these
securities can be sold. To the extent that there is no established secondary
market for these securities, the Fund may experience difficulty in valuing such
securities and, in turn, the Fund's assets.

INVESTMENTS IN EXCHANGE-TRADED FUNDS AND OTHER INVESTMENT COMPANIES
The Fund may invest in shares of exchange-traded funds, or ETFs, subject to the
restrictions and limitations of the Investment Company Act of 1940 (the "1940
Act"), or any applicable rules, exemptive orders or regulatory guidance. ETFs
are pooled investment vehicles, which may be managed or unmanaged, that
generally seek to track the performance of a specific index. ETFs will not
track their underlying indices precisely since the ETFs have expenses and may
need to hold a portion of their assets in cash, unlike the underlying indices,
and the ETFs may not invest in all of the securities in the underlying indices
in the same proportion as the indices for varying reasons. The Fund will incur
transaction costs when buying and selling ETF shares, and indirectly bear the
expenses of the ETFs. In addition, the market value of an ETF's shares, which
is based on supply and demand in the market for the ETF's shares, may differ
from their NAV. Accordingly, there may be times when an ETF's shares trade at a
discount or premium to its NAV.

The Fund may also invest in investment companies other than ETFs, as permitted
by the 1940 Act or the rules and regulations thereunder. As with ETF
investments, if the Fund acquires shares in other investment companies,
shareholders would bear, indirectly, the expenses of such investment companies
(which may include management and advisory fees), which are in addition to the
Fund's expenses. The Fund intends to invest uninvested cash balances in an
affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act.

MORTGAGE-RELATED, OTHER ASSET-BACKED SECURITIES AND STRUCTURED SECURITIES
The Fund may invest in mortgage-related or other asset-backed securities.
Mortgage-related securities include mortgage pass-through securities,
collateralized mortgage obligations ("CMOs"), commercial mortgage-backed
securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed
securities ("SMBSs") and other securities that directly or indirectly represent
a participation in or are secured by and payable from mortgage loans on real
property. These securities may be issued or guaranteed by the U.S. Government
or one of its sponsored entities or may be issued by private organizations.

                                                                             11




The value of mortgage-related or other asset-backed securities may be
particularly sensitive to changes in prevailing interest rates. Early payments
of principal on some mortgage-related securities may occur during periods of
falling mortgage interest rates and expose the Fund to a lower rate of return
upon reinvestment of principal. Early payments associated with mortgage-related
securities cause these securities to experience significantly greater price and
yield volatility than is experienced by traditional fixed-income securities.
During periods of rising interest rates, a reduction in prepayments may
increase the effective life of mortgage-related securities, subjecting them to
greater risk of decline in market value in response to rising interest rates.
If the life of a mortgage-related security is inaccurately predicted, the Fund
may not be able to realize the rate of return it expected.

One type of SMBS has one class receiving all of the interest from the mortgage
assets (the interest-only, or "IO" class), while the other class will receive
all of the principal (the principal-only, or "PO" class). The yield to maturity
on an IO class is extremely sensitive to the rate of principal payments
(including prepayments) on the underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on the Fund's yield to
maturity from these securities.

The Fund may invest in collateralized debt obligations ("CDOs"), which include
collateralized bond obligations ("CBOs"), collateralized loan obligations
("CLOs"), and other similarly structured securities. CBOs and CLOs are types of
asset-backed securities. A CBO is a trust that is backed by a diversified pool
of high-risk, below investment grade fixed-income securities. A CLO is a trust
typically collateralized by a pool of loans, which may include, among others,
domestic and foreign senior secured loans, senior unsecured loans, and
subordinate corporate loans, including loans that may be rated below investment
grade or equivalent unrated loans. The Fund may invest in other asset-backed
securities that have been offered to investors.

The Fund may invest in other asset-backed securities. The securitization
techniques used to develop mortgage-related securities are being applied to a
broad range of financial assets. Through the use of trusts and special purpose
corporations, various types of assets, including automobile loans and leases,
credit card receivables, home equity loans, equipment leases and trade
receivables, are being securitized in structures similar to the structures used
in mortgage securitizations.

The Fund may also invest in various types of structured securities and basket
securities. Structured securities are securities issued in structured financing
transactions, which generally involve aggregating types of debt assets in a
pool or special purpose entity and then issuing new securities. Types of
structured financings include securities described elsewhere in this
Prospectus, such as mortgage-related and other asset-backed securities. The
Fund's investments include investments in structured securities that represent
interests in entities organized and operated solely for the purpose of
restructuring the investment characteristics of particular debt obligations.
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 high-yield bonds) and the issuance by that entity of one or more
classes of 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 from the underlying instruments. Structured securities of a given class
may be either subordinated or unsubordinated to the payment of another class.
Subordinated structured securities typically have higher yields and present
greater risks than unsubordinated structured securities.

Basket securities in which the Fund may invest may consist of entities
organized and operated for the purpose of holding a basket of other securities.
Baskets involving debt obligations may be designed to represent the
characteristics of some portion of the debt securities market or the entire
debt securities market.

PREFERRED STOCK
The Fund may invest in preferred stock. Preferred stock is subordinated to any
debt the issuer has outstanding. Accordingly, preferred stock dividends are not
paid until all debt obligations are first met. Preferred stock may be subject
to more fluctuations in market value, due to changes in market participants'
perceptions of the issuer's ability to continue to pay dividends, than debt of
the same issuer.

REPURCHASE AGREEMENTS AND BUY/SELL BACK TRANSACTIONS
The Fund may enter into repurchase agreements in which the Fund purchases a
security from a bank or broker-dealer, which agrees to repurchase the security
from the Fund at an agreed-upon future date, normally a day or a few days
later. The purchase and repurchase transactions are transacted under one
agreement. The resale price is greater than the purchase price, reflecting an
agreed-upon interest rate for the period the buyer's money is invested in the
security. Such agreements permit the Fund to keep all of its assets at work
while retaining "overnight" flexibility in pursuit of investments of a
longer-term nature. If the bank or broker-dealer defaults on its repurchase
obligation, the Fund would suffer a loss to the extent that the proceeds from
the sale of the security were less than the repurchase price.

The Fund may enter into buy/sell back transactions, which are similar to
repurchase agreements. In this type of transaction, the Fund enters a trade to
buy securities at one price and simultaneously enters a trade to sell the same
securities at another price on a specified date. Similar to a repurchase
agreement, the repurchase price is higher than the sale price and reflects
current interest rates. Unlike a repurchase agreement, however, the buy/sell
back transaction is considered two separate transactions.

STRUCTURED PRODUCTS
The Fund may invest in certain hybrid derivatives-type investments that combine
features of a traditional stock or bond with those of, for example, a futures
contract or an option. These investments include structured notes and indexed
securities and

12



credit-linked securities. The performance of the structured product, which is
generally a fixed-income security, is tied (positively or negatively) to the
price or prices of an unrelated reference indicator such as a security or
basket of securities, currencies, commodities, a securities or commodities
index or a credit default swap or other kinds of swaps. The structured product
may not pay interest or protect the principal invested. The structured product
or its interest rate may be a multiple of the reference indicator and, as a
result, may be leveraged and move (up or down) more rapidly than the reference
indicator. Investments in structured products may provide a more efficient and
less expensive means of investing in underlying securities. commodities or
other derivatives, but may potentially be more volatile, less liquid and carry
greater market risk than investments in traditional securities. The purchase of
a structured product also exposes the Fund to the credit risk of the structured
product.

Structured notes are derivative debt instruments. The interest rate or
principal of these notes are determined by reference to an unrelated indicator
(for example, a currency, security, or indices thereof) unlike a typical note
where the borrower agrees to make fixed or floating interest payments and to
pay a fixed sum at maturity. Indexed securities may include structured notes as
well as securities other than debt securities, the interest or principal of
which is determined by an unrelated indicator.

The Fund may also invest in certain hybrid derivatives-type investments that
combine features of a traditional bond with those of certain derivatives such
as a credit default swap, an interest rate swap or other securities. These
investments include credit-linked securities. The issuers of these securities
frequently are limited purpose trusts or other special purpose vehicles that
invest in a derivative instrument or basket of derivative instruments in order
to provide exposure to certain fixed-income markets. For instance, the Fund may
invest in credit-linked securities as a cash management tool to gain exposure
to a certain market or to remain fully invested when more traditional
income-producing securities are not available. The performance of the
structured product, which is generally a fixed-income security, is linked to
the receipt of payments from the counterparties to the derivatives instruments
or other securities. The Fund's investments in credit-linked securities are
indirectly subject to the risks associated with derivative instruments,
including, among others, credit risk, default risk, counterparty risk, interest
rate risk and leverage risk. These securities are generally structured as Rule
144A securities so that they may be freely traded among institutional buyers.
However, changes in the market for credit-linked securities or the availability
of willing buyers may result in the securities becoming illiquid.

TENDER OPTION BOND TRANSACTIONS
The Fund may enter into TOBs in which the Fund may sell a municipal security to
a broker, which, in turn deposits the bond into a special purpose vehicle,
which is generally organized as a trust, sponsored by the broker (the "Trust").
The Fund receives cash and a residual interest security (sometimes referred to
as "inverse floaters") issued by the Trust in return. The Trust simultaneously
issues securities, which pay an interest rate that is reset each week based on
an index of high-grade short-term demand notes. These securities (sometimes
referred to as "floaters") are bought by third parties, including tax-exempt
money market funds, and can be tendered by these holders to a liquidity
provider at par, unless certain events occur. Under certain circumstances, the
Trust may be terminated or collapsed, either by the Fund or upon the occurrence
of certain events, such as a downgrade in the credit quality of the underlying
bond or in the event holders of the floaters tender their securities to the
liquidity provider. The Fund continues to earn all the interest from the
transferred bond less the amount of interest paid on the floaters and the
expenses of the Trust, which include payments to the trustee and the liquidity
provider and organizational costs. The Fund uses the cash received from the
transaction for investment purposes, which involves leverage risk. For a
discussion of the risks of TOBs, see "Leverage" below.

VARIABLE, FLOATING AND INVERSE FLOATING RATE INSTRUMENTS
Variable and floating-rate securities pay interest at rates that are adjusted
periodically according to a specified formula. A "variable" interest rate
adjusts at predetermined intervals (e.g., daily, weekly, or monthly), while a
"floating" interest rate adjusts whenever a specified benchmark rate (such as
the bank prime lending rate) changes.

The Fund may invest in inverse floating-rate instruments ("inverse floaters").
The interest rate on an inverse floater resets in the opposite direction from
the market rate of interest to which the inverse floater is indexed. An inverse
floater may have greater volatility in market value in that, during periods of
rising interest rates, the market values of inverse floaters will tend to
decrease more rapidly than those of fixed-rate securities.

ZERO-COUPON SECURITIES
Zero-coupon securities are debt securities that have been issued without
interest coupons or stripped of their unmatured interest coupons, and include
receipts or certificates representing interests in such stripped debt
obligations and coupons. Such a 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. Such securities
usually trade at a deep discount from their face or par value and are subject
to greater fluctuations in market value in response to changing interest rates
than debt obligations of comparable maturities and credit quality that make
current distributions of interest. On the other hand, because there are no
periodic interest payments to be reinvested prior to maturity, these securities
eliminate reinvestment risk and "lock in" a rate of return to maturity.

LEVERAGE
The Fund may use leverage for investment purposes to seek to enhance the yield
and NAV attributable to its shares. In particular, the Fund may enter into such
transactions as TOB transactions and credit default and interest rate swaps.
This means that the Fund uses cash made available during the term of these
transactions to make other investments or to make investments through credit
default interest rate swaps that are functionally

                                                                             13



equivalent to the purchase of a fixed-income security. The utilization of
leverage, which is considered speculative, involves certain risks for the
Fund's shareholders. These risks include a higher volatility of the NAV of the
Fund's shares and the relatively greater effect on its NAV. So long as the Fund
is able to realize a net return on its investments that is higher than the
carrying costs of the leveraged transaction, the effect of leverage will be to
cause the Fund's shareholders to realize a higher net return than if the Fund
was not leveraged. If the carrying costs of leveraged transactions approach the
return on the Fund's investments made through leverage, the benefit of leverage
to the Fund's shareholders will be reduced. If the carrying costs of leveraged
transactions were to exceed the return to shareholders, the Fund's use of
leveraged transactions would result in a lower rate of return. In an extreme
case, if the Fund's current investment income were not sufficient to meet the
carrying costs of leveraged transactions, it could be necessary for the Fund to
liquidate certain of its investments in adverse circumstances, potentially
significantly reducing its NAV.

During periods of rising short-term interest rates, the interest paid on
floaters in TOBs would increase, which may adversely affect the Fund's net
return. If rising short-term rates coincide with a period of rising long-term
rates, the value of the long-term municipal bonds purchased with the proceeds
of leverage would decline, adversely affecting the Fund's NAV. In certain
circumstances, adverse changes in interest rates or other events could cause a
TOB Trust to terminate or collapse, potentially requiring the Fund to liquidate
longer-term municipal securities at unfavorable prices to meet the Trust's
outstanding obligations.

FUTURE DEVELOPMENTS
The Fund may take advantage of other investment practices that are not
currently contemplated for use by the Fund, or are not available but may yet be
developed, to the extent such investment practices are consistent with the
Fund's investment objective and legally permissible for the Fund. Such
investment practices, if they arise, may involve risks that exceed those
involved in the activities described above.

CHANGES IN INVESTMENT OBJECTIVES AND POLICIES
The Fund's Board of Directors (the "Board") may change the Fund's investment
objective without shareholder approval. The Fund will provide shareholders with
60 days' prior written notice of any change to the Fund's investment objective.
The Fund has a fundamental policy to invest at least 80% of its net assets in
fixed-income securities and will not change this policy without shareholder
approval. Unless otherwise noted, all other investment policies of the Fund may
be changed without shareholder approval.

TEMPORARY DEFENSIVE POSITION
For temporary defensive purposes to attempt to respond to adverse market,
economic, political, or other conditions, the Fund also may invest without
limit in high-quality municipal notes or variable rate demand obligations, or
in taxable cash equivalents. While the Fund is investing for temporary
defensive purposes, it may not achieve its investment objective.

PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's SAI.

14



INVESTING IN THE FUND
--------------------------------------------------------------------------------

This section discusses how to buy, sell or redeem, or exchange different
classes of shares of the Fund that are offered in this Prospectus. The Fund
offers three classes of shares through this Prospectus.

Each share class represents an investment in the same portfolio of securities,
but the classes may have different sales charges and bear different ongoing
distribution expenses. For additional information on the differences between
the different classes of shares and factors to consider when choosing among
them, please see "The Different Share Class Expenses" and "Choosing a Share
Class" below. ONLY CLASS A SHARES OFFER QUANTITY DISCOUNTS ON SALES CHARGES, as
described under "Sales Charge Reduction Programs for Class A Shares" below.

HOW TO BUY SHARES
The purchase of the Fund's shares is priced at the next-determined NAV after
your order is received in proper form.

CLASS A AND CLASS C SHARES
You may purchase the Fund's Class A or Class C shares through financial
intermediaries, such as broker-dealers or banks. You also may purchase shares
directly from the Fund's principal underwriter, AllianceBernstein Investments,
Inc., or ABI. These purchases may be subject to an initial sales charge, an
asset-based sales charge or CDSC as described below.

PURCHASE MINIMUMS AND MAXIMUMS

MINIMUMS:*

--Initial:                     $2,500
--Subsequent:                  $   50

*Purchase minimums may not apply to some accounts established in connection
 with the Automatic Investment Program and to some retirement-related
 investment programs. Please see "Retirement Plans, Tax-Deferred Accounts and
 Employee Benefit Plans" and "Automatic Investment Program" below.
 Additionally, these investment minimums do not apply to persons participating
 in a fee-based program sponsored and maintained by a registered broker-dealer
 or other financial intermediary and approved by ABI.

MAXIMUM INDIVIDUAL PURCHASE AMOUNT:

--Class A shares                   None
--Class C shares               $500,000

OTHER PURCHASE INFORMATION
Your broker or financial advisor must receive your purchase request by the Fund
Closing Time, which is the close of regular trading on any day the Exchange is
open (ordinarily, 4:00 p.m., Eastern time, but sometimes earlier, as in the
case of scheduled half-day trading or unscheduled suspensions of trading), and
submit it to the Fund by a pre-arranged time for you to receive the
next-determined NAV, less any applicable initial sales charge.

If you are an existing Fund shareholder and you have completed the appropriate
section of the Mutual Fund Application, you may purchase additional shares by
telephone with payment by electronic funds transfer in amounts not exceeding
$500,000. AllianceBernstein Investor Services, Inc., or ABIS, must receive and
confirm telephone requests before the Fund Closing Time, to receive that day's
public offering price. Call 800-221-5672 to arrange a transfer from your bank
account.

ADVISOR CLASS SHARES
You may purchase Advisor Class shares through your financial advisor at NAV.
Advisor Class shares may be purchased and held solely:

.  through accounts established under a fee-based program, sponsored and
   maintained by a registered broker-dealer or other financial intermediary and
   approved by ABI;

.  through a defined contribution employee benefit plan (e.g., a 401(k) plan)
   that purchases shares directly without the involvement of a financial
   intermediary; and

.  by investment advisory clients of, and certain other persons associated
   with, the Adviser and its affiliates or the Fund.

The Fund's SAI has more detailed information about who may purchase and hold
Advisor Class shares.

RETIREMENT PLANS, TAX-DEFERRED ACCOUNTS AND EMPLOYEE BENEFIT PLANS
Special investment minimums and other eligibility requirements for the purchase
of Class A and Class C shares by these types of plans may apply. Investment
minimums are as set forth in the list below:

.  Traditional and Roth IRAs (the minimums listed in the table above);

.  SEPs, SAR-SEPs, SIMPLE IRAs, and individual 403(b) plans (no minimums);

.  AllianceBernstein-sponsored Coverdell Education Savings Accounts ($2,000
   initial investment minimum, $150 Automatic Investment Program monthly
   minimum);

.  AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans
   with at least $250,000 in plan assets and 100 employees (no minimums); and

.  certain defined contribution retirement plans that do not have plan level or
   omnibus accounts on the books of the Fund (no minimums).

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 100 employees, and to group retirement plans with
plan assets of less than $1,000,000.

IRA custodians, plan sponsors, plan fiduciaries and other intermediaries may
establish their own eligibility requirements as to the purchase, sale or
exchange of shares of the Fund, including minimum investment requirements
greater than those described above and maximum investment requirements.

                                                                             15




REQUIRED INFORMATION
The Fund is required by law to obtain, verify and record certain personal
information from you or persons on your behalf in order to establish an
account. Required information includes name, date of birth, permanent
residential address and taxpayer identification number (for most investors,
your social security number). The Fund may also ask to see other identifying
documents. If you do not provide the information, the Fund will not be able to
open your account. If the Fund is unable to verify your identity, or that of
another person(s) authorized to act on your behalf, or if the Fund believes it
has identified potentially criminal activity, the Fund reserves the right to
take action it deems appropriate or as required by law, which may include
closing your account. If you are not a U.S. citizen or resident alien, your
account must be affiliated with a Financial Industry Regulatory Authority, or
FINRA, member firm.

The Fund is required to withhold 28% of taxable dividends, capital gains
distributions, and redemptions paid to any shareholder who has not provided the
Fund with his or her correct taxpayer identification number. To avoid this, you
must provide your correct tax identification number on your Mutual Fund
Application.

GENERAL
ABI may refuse any order to purchase shares. The Fund reserves the right to
suspend the sale of its shares to the public in response to conditions in the
securities markets or for other reasons.

THE DIFFERENT SHARE CLASS EXPENSES
This section describes the different expenses of investing in each class and
explains factors to consider when choosing a class of shares. The expenses can
include distribution and/or service (Commission Rule 12b-1) fees, initial sales
charges and/or CDSCs. ONLY CLASS A SHARES OFFER QUANTITY DISCOUNTS as described
below.

                           WHAT IS A RULE 12b-1 FEE?
  A Rule 12b-1 fee is a fee deducted from the Fund's assets that is used to pay
  for personal service, maintenance of shareholder accounts and distribution
  costs, such as advertising and compensation of financial intermediaries. The
  Fund has adopted a plan under Rule 12b-1 that allows the Fund to pay
  asset-based sales charges or distribution and/or service (Rule 12b-1) fees
  for the distribution and sale of its shares. The amount of each share class's
  Rule 12b-1 fee, if any, is disclosed below and in the Fund's fee table
  included in the Summary Information section above.

ASSET-BASED SALES CHARGES OR DISTRIBUTION AND/OR SERVICE (RULE 12b-1) FEES
The Fund has adopted a plan under Commission Rule 12b-1 that allows the Fund to
pay asset-based sales charges or distribution and/or service (Rule 12b-1) fees
for the distribution and sale of its shares. The amount of these fees for each
class of the Fund's shares is up to:

               DISTRIBUTION AND/OR SERVICE
                 (RULE 12b-1) FEE (AS A
                 PERCENTAGE OF AGGREGATE
                AVERAGE DAILY NET ASSETS)
------------------------------------------
Class A                   0.30%
Class C                   1.00%
Advisor Class             None

Because these fees are paid out of the Fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees. Class C shares are subject to higher
Rule 12b-1 fees than Class A shares. Share classes with higher Rule 12b-1 fees
will have a higher expense ratio, pay correspondingly lower dividends and may
have a lower NAV (and returns). All or some of these fees may be paid to
financial intermediaries, including your financial advisor's firm.

SALES CHARGES

CLASS A SHARES
You can purchase Class A shares at their public offering price (or cost), which
is NAV plus an initial sales charge of up to 3.00% of the offering price. Any
applicable sales charge will be deducted directly from your investment. Larger
investments are subject to "breakpoints" or "quantity discounts" as discussed
below. Purchases of Class A shares in the amount of $500,000 or more or by
AllianceBernstein or non-AllianceBernstein sponsored group retirement plans are
not subject to an initial sales charge but may be subject to a 1% CDSC if
redeemed or terminated within one year.

The initial sales charge you pay each time you buy Class A shares differs
depending on the amount you invest and may be reduced or eliminated for larger
purchases as indicated below. These discounts, which are also known as
BREAKPOINTS or QUANTITY DISCOUNTS, can reduce or, in some cases, eliminate the
initial sales charges that would otherwise apply to your investment in Class A
shares.

The sales charge schedule of Class A share QUANTITY DISCOUNTS is as follows:

                                           INITIAL SALES CHARGE
                                           ------------------
                                            AS % OF    AS % OF
                                           NET AMOUNT  OFFERING
                  AMOUNT PURCHASED          INVESTED    PRICE
                  ---------------------------------------------
                  Up to $100,000              3.09%      3.00%
                  $100,000 up to $250,000     2.04       2.00
                  $250,000 up to $500,000     1.01       1.00
                  $500,000 and above          0.00       0.00

The Fund may sell its Class A shares at NAV without an initial sales charge to
some categories of investors, including:

.  AllianceBernstein Link, AllianceBernstein Individual 401(k), and
   AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan assets or
   100 employees;

.  persons participating in a fee-based program, sponsored and maintained by a
   registered broker-dealer or other financial intermediary and approved by
   ABI, under which persons pay an asset-based fee for services in the nature
   of investment advisory or administrative services or clients of
   broker-dealers

16



  or other financial intermediaries approved by ABI who purchase Class A shares
  for their own accounts through self-directed brokerage accounts with the
  broker-dealers or other financial intermediaries that may or may not charge a
  transaction fee to its customers;

.  plan participants who roll over amounts distributed from employer maintained
   retirement plans to AllianceBernstein-sponsored IRAs where the plan is a
   client of or serviced by AllianceBernstein's Institutional Investment
   Management or Bernstein Global Wealth Management Divisions, including
   subsequent contributions to those IRAs; or

.  certain other investors, such as investment management clients of the
   Adviser or its affiliates, including clients and prospective clients of the
   Adviser's AllianceBernstein Institutional Investment Management Division,
   employees of selected dealers authorized to sell the Fund's shares and
   employees of the Adviser.

Please see the Fund's SAI for more information about purchases of Class A
shares without sales charges.

CLASS C SHARES
You can purchase Class C shares at NAV without an initial sales charge. This
means that the full amount of your purchase is invested in the Fund. Your
investment is subject to a 1% CDSC if you redeem your shares within one year.
If you exchange your shares for the Class C shares of another AllianceBernstein
Mutual Fund, the 1% CDSC also will apply to the Class C shares received. If you
redeem your shares and directly invest the proceeds in units of
CollegeBoundfund, the CDSC will apply to the units of CollegeBoundfund. The
1-year period for the CDSC begins with the date of your original purchase, not
the date of the exchange for the other Class C shares or purchase of
CollegeBoundfund units.

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

                          HOW IS THE CDSC CALCULATED?
  The CDSC is applied to the lesser of NAV at the time of redemption or the
  original cost of shares being redeemed (or, as to Fund shares acquired
  through an exchange, the cost of the AllianceBernstein Mutual Fund shares
  originally purchased for cash). This means that no sales charge is assessed
  on increases in NAV above the initial purchase price. Shares obtained from
  dividend or distribution reinvestment are not subject to the CDSC. In
  determining the CDSC, it will be assumed that the redemption is, first, of
  any shares not subject to a CDSC and, second, of shares held the longest.

ADVISOR CLASS SHARES
You may purchase Advisor Class shares through your financial advisor. Advisor
Class shares are not subject to any initial or contingent sales charges,
although your financial advisor may charge a fee.

SALES CHARGE REDUCTION PROGRAMS FOR CLASS A SHARES
THIS SECTION INCLUDES IMPORTANT INFORMATION ABOUT SALES CHARGE REDUCTION
PROGRAMS AVAILABLE TO INVESTORS IN CLASS A SHARES AND DESCRIBES INFORMATION OR
RECORDS YOU MAY NEED TO PROVIDE TO THE FUND OR YOUR FINANCIAL INTERMEDIARY IN
ORDER TO BE ELIGIBLE FOR SALES CHARGE REDUCTION PROGRAMS.

Information about Quantity Discounts and sales charge reduction programs also
is available free of charge and in a clear and prominent format on our website
at www.AllianceBernstein.com (click on "AllianceBernstein Mutual Fund
Investors--U.S." then "Investor Resources--Understanding Sales Charges").

RIGHTS OF ACCUMULATION
To determine if a new investment in Class A shares is eligible for a QUANTITY
DISCOUNT, a shareholder can combine the value of the new investment in the Fund
with the higher of cost or NAV of existing investments in the Fund, any other
AllianceBernstein Mutual Fund, AllianceBernstein Institutional Funds and
certain CollegeBoundfund accounts for which the shareholder, his or her spouse
or domestic partner, or child under the age of 21 is the participant. The
AllianceBernstein Mutual Funds use the higher of cost or current NAV of your
existing investments when combining them with your new investment.

COMBINED PURCHASE PRIVILEGES
A shareholder may qualify for a QUANTITY DISCOUNT by combining purchases of
shares of the Fund into a single "purchase". A "purchase" means a single
purchase or concurrent purchases of shares of the Fund or any other
AllianceBernstein Mutual Fund, including AllianceBernstein Institutional Funds,
by:

.  an individual, his or her spouse or domestic partner, or the individual's
   children under the age of 21 purchasing shares for his, her or their own
   account(s), including certain CollegeBoundfund accounts;

.  a trustee or other fiduciary purchasing shares for a single trust, estate or
   single fiduciary account with one or more beneficiaries involved;

.  the employee benefit plans of a single employer; or

.  any company that has been in existence for at least six months or has a
   purpose other than the purchase of shares of the Fund.

LETTER OF INTENT
An investor may not immediately invest a sufficient amount to reach a QUANTITY
DISCOUNT, but may plan to make one or more additional investments over a period
of time that, in the end, would qualify for a QUANTITY DISCOUNT. For these
situations, the Fund offers a LETTER OF INTENT, which permits new investors to
express the intention, in writing, to invest at least $100,000 in Class A
shares of the Fund or any AllianceBernstein Mutual Fund within 13 months. The
Fund will then apply the QUANTITY DISCOUNT to each of the investor's purchases
of Class A shares that would apply to the

                                                                             17



total amount stated in the LETTER OF INTENT. In the event an existing investor
chooses to initiate a LETTER OF INTENT, the AllianceBernstein Mutual Funds will
use the higher of cost or current NAV of the investor's existing investments
and of those accounts with which investments are combined via COMBINED PURCHASE
PRIVILEGES toward the fulfillment of the LETTER OF INTENT. For example, if the
combined cost of purchases totaled $80,000 and the current NAV of all
applicable accounts is $85,000 at the time a $100,000 LETTER OF INTENT is
initiated, the subsequent investment of an additional $15,000 would fulfill the
LETTER OF INTENT. If an investor fails to invest the total amount stated in the
LETTER OF INTENT, the Fund will retroactively collect the sales charge
otherwise applicable by redeeming shares in the investor's account at their
then current NAV. Investors qualifying for COMBINED PURCHASE PRIVILEGES may
purchase shares under a single LETTER OF INTENT.

REQUIRED SHAREHOLDER INFORMATION AND RECORDS
In order for shareholders to take advantage of sales charge reductions, a
shareholder or his or her financial intermediary must notify the Fund that the
shareholder qualifies for a reduction. Without notification, the Fund is unable
to ensure that the reduction is applied to the shareholder's account. A
shareholder may have to provide information or records to his or her financial
intermediary or the Fund to verify eligibility for breakpoint privileges or
other sales charge waivers. This may include information or records, including
account statements, regarding shares of the Fund or other AllianceBernstein
Mutual Funds held in:

.  all of the shareholder's accounts at the Fund or a financial intermediary;
   and

.  accounts of related parties of the shareholder, such as members of the same
   family, at any financial intermediary.

CDSC WAIVERS AND OTHER PROGRAMS

                        Here Are Some Ways To Avoid Or
                        Minimize Charges On Redemption.

CDSC WAIVERS
The Fund will waive the CDSCs on redemptions of shares in the following
circumstances, among others:

.  permitted exchanges of shares;

.  following the death or disability of a shareholder;

.  if the redemption represents a minimum required distribution from an IRA or
   other retirement plan to a shareholder who has attained the age of 70 1/2;

.  if the proceeds of the redemption are invested directly in a
   CollegeBoundfund account; or

.  if 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.

OTHER PROGRAMS
Class A shareholders may be able to purchase additional Class A shares with a
reduced or eliminated sales charge through the following AllianceBernstein
programs: DIVIDEND REINVESTMENT PROGRAM, DIVIDEND DIRECTION PLAN and
REINSTATEMENT PRIVILEGE as described below.

DIVIDEND REINVESTMENT PROGRAM
Unless you specifically have elected to receive dividends or distributions in
cash, they will automatically be reinvested, without an initial sales charge or
CDSC, in the same class of additional shares of the Fund. If you elect to
receive distributions in cash, you will only receive a check if the amount of
the distribution is equal to or exceeds $25.00. Distributions of less than
$25.00 will automatically be reinvested in shares of the Fund. To receive
distributions of less than $25.00 in cash, you must have bank instructions
associated to your account so that distributions can be delivered to you
electronically via Electronic Funds Transfer using the Automated Clearing House
or "ACH". In addition, the Fund may reinvest your distribution check (and
future checks) in additional shares of the Fund if your check (i) is returned
as undeliverable or (ii) remains uncashed for nine months.

DIVIDEND DIRECTION PLAN
A shareholder who already maintains accounts in more than one AllianceBernstein
Mutual Fund may direct the automatic investment of income dividends and/or
capital gains by one Fund, in any amount, without the payment of any sales
charges, in shares of the same class of one or more other AllianceBernstein
Mutual Fund(s).

AUTOMATIC INVESTMENT PROGRAM
The Automatic Investment Program allows investors to purchase shares of the
Fund through pre-authorized transfers of funds from the investor's bank
account. Under the Automatic Investment Program, an investor may (i) make an
initial purchase of at least $2,500 and invest at least $50 monthly or
(ii) make an initial purchase of less than $2,500 and commit to a monthly
investment of $200 or more until the investor's account balance is $2,500 or
more.

REINSTATEMENT PRIVILEGE
A shareholder who has redeemed all or any portion of his or her Class A shares
may reinvest all or any portion of the proceeds from the redemption in Class A
shares of any AllianceBernstein Mutual Fund at NAV without any sales charge, if
the reinvestment is made within 120 calendar days after the redemption date.

SYSTEMATIC WITHDRAWAL PLAN
The Fund offers a systematic withdrawal plan that permits the redemption of
Class A or Class C shares without payment of a CDSC. Under this plan,
redemptions equal to 1% a month, 2% every two months or 3% a quarter of the
value of the Fund account would be free of a CDSC. For Class A and Class C
shares, shares held the longest would be redeemed first.

CHOOSING A SHARE CLASS
Each share class represents an interest in the same portfolio of securities,
but each class has its own sales charge and expense

18



structure allowing you to choose the class that best fits your situation. In
choosing a class of shares, you should consider:

.  the amount you intend to invest;

.  how long you expect to own shares;

.  expenses associated with owning a particular class of shares;

.  whether you qualify for any reduction or waiver of sales charges (for
   example, if you are making a large investment that qualifies for a QUANTITY
   DISCOUNT, you might consider purchasing Class A shares); and

.  whether a share class is available for purchase.

Among other things, Class A shares, with their lower Rule 12b-1 fees, are
designed for investors with a long-term investing time frame. Class C shares
should not be considered as a long-term investment because they are subject to
a higher distribution fee indefinitely. Class C shares do not, however, have an
initial sales charge or a CDSC so long as the shares are held for one year or
more. Class C shares are designed for investors with a short-term investing
time frame.

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

YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR FOR ASSISTANCE IN CHOOSING A CLASS OF
FUND SHARES.

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

                       WHAT IS A FINANCIAL INTERMEDIARY?
  A financial intermediary is a firm that receives compensation for selling
  shares of the Fund offered in this Prospectus and/or provides services to the
  Fund's shareholders. Financial intermediaries may include, among others, your
  broker, your financial planner or advisor, banks and insurance companies.
  Financial intermediaries may employ financial advisors who deal with you and
  other investors on an individual basis.

All or a portion of the initial sales charge that you pay may be paid by ABI to
financial intermediaries selling Class A shares. ABI may also pay these
financial intermediaries a fee of up to 1% on purchases of $1,000,000 or more
or for AllianceBernstein Link, AllianceBernstein SIMPLE IRA plans with more
than $250,000 in assets or for purchases made by certain other retirement plans.

ABI may pay, at the time of your purchase, a commission to financial
intermediaries selling Class C shares in an amount equal to 1% of your
investment for sales of Class C shares.

For Class A and Class C shares, up to 100% of the Rule 12b-1 fees applicable to
these classes of shares each year may be paid to financial intermediaries.

In the case of Advisor Class shares, your financial advisor may charge ongoing
fees or transactional fees.

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

  - upfront sales commissions;
  - Rule 12b-1 fees;
  - additional distribution support;
  - defrayal of costs for educational seminars and training;
    and
  - payments related to providing shareholder recordkeeping and/or transfer
    agency services.

  Please read the 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 Rule 12b-1 fees, some or all of which may be paid to financial
intermediaries (and, in turn, to your financial advisor), ABI, 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. ABI may pay a portion of "ticket" or other
transactional charges.

For 2013, ABI's additional payments to these firms for distribution services
and educational support related to the AllianceBernstein Mutual Funds are
expected to be approximately 0.05% of the average monthly assets of the

                                                                             19



AllianceBernstein Mutual Funds, or approximately $21 million. In 2012, ABI paid
approximately 0.05% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $19.0 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 ABI
access to its financial advisors for educational and marketing purposes. In
some cases, firms will include the AllianceBernstein Mutual Funds on a
"preferred list". ABI'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 Fund and ABI also make payments for recordkeeping and other transfer agency
services to financial intermediaries that sell AllianceBernstein Mutual Fund
shares. Please see "Management of the Fund--Transfer Agency and Retirement Plan
Services" below. These expenses paid by the Fund are included in "Other
Expenses" under "Fees and Expenses of the Fund--Annual Fund Operating Expenses"
in the Summary Information at the beginning of this 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 FUND, THE
  ADVISER, ABI 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.

As of the date of this Prospectus, ABI anticipates that the firms that will
receive additional payments for distribution services and/or educational
support include:

  Advisor Group, Inc.
  Ameriprise Financial Services
  AXA Advisors
  Cadaret, Grant & Co.
  CCO Investment Services Corp.
  Chase Investment Services
  Citigroup Global Markets, Inc.
  Commonwealth Financial Network
  Donegal Securities
  Financial Network Investment Company
  LPL Financial
  Merrill Lynch
  Morgan Stanley
  Multi-Financial Securities Corporation
  Northwestern Mutual Investment Services
  PrimeVest Financial Services
  Raymond James
  RBC Wealth Management
  Robert W. Baird
  UBS Financial Services
  Wells Fargo Advisors

Although the Fund may use brokers and dealers that sell shares of the Fund 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.

HOW TO EXCHANGE SHARES
You may exchange your Fund shares for shares of the same class of other
AllianceBernstein Mutual Funds (including AllianceBernstein Exchange Reserves,
a money market fund managed by the Adviser) provided that the other fund offers
the same class of shares. Exchanges of shares are made at the next-determined
NAV, without sales or service charges, after your order is received in proper
form. All exchanges are subject to the minimum investment restrictions set
forth in the prospectus for the AllianceBernstein Mutual Fund whose shares are
being acquired. You may request an exchange by mail or telephone. In order to
receive a day's NAV, ABIS must receive and confirm your telephone exchange
request by the Fund Closing Time, on that day. The Fund may modify, restrict or
terminate the exchange privilege on 60 days' written notice.

HOW TO SELL OR REDEEM SHARES
You may "redeem" your shares (i.e., sell your shares to the Fund) on any day
the the Exchange is open, either directly or through your financial
intermediary. Your sale price will be the next-determined NAV, less any
applicable CDSC, after the Fund receives your redemption request in proper
form. Normally, redemption proceeds are sent to you within seven days. If you
recently purchased your shares by check or electronic funds transfer, your
redemption payment may be delayed until the Fund is reasonably satisfied that
the check or electronic funds transfer has been collected (which may take up to
15 days). For Advisor Class shares, if you are in doubt about what procedures
or documents are required by your fee-based program or employee benefit plan to
sell your shares, you should contact your financial advisor.

SELLING SHARES THROUGH YOUR BROKER OR OTHER FINANCIAL ADVISOR
Your broker or financial advisor must receive your sales request by the Fund
Closing Time, and submit it to the Fund by a pre-arranged time for you to
receive that day's NAV, less any applicable CDSC. Your broker or financial
advisor is responsible for submitting all necessary documentation to the Fund
and may charge you a fee for this service.

20




SELLING SHARES DIRECTLY TO THE FUND
BY MAIL:
.  Send a signed letter of instruction or stock power, along with certificates,
   to:

          AllianceBernstein Investor Services, Inc.
          P.O. Box 786003
          San Antonio, TX 78278-6003

.  For certified or overnight deliveries, send to:

          AllianceBernstein Investor Services, Inc.
          8000 IH 10 W, 4th floor
          San Antonio, TX 78230

.  For your protection, a bank, a member firm of a national stock exchange or
   another eligible guarantor institution must guarantee signatures. Stock
   power forms are available from your financial intermediary, ABIS and many
   commercial banks. Additional documentation is required for the sale of
   shares by corporations, intermediaries, fiduciaries and surviving joint
   owners. If you have any questions about these procedures, contact ABIS.

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

.  ABIS must receive and confirm a telephone redemption request by the Fund
   Closing Time for you to receive that day's NAV, less any applicable CDSC.

.  For your protection, ABIS will request personal or other information from
   you to verify your identity and will generally record the calls. Neither the
   Fund nor the Adviser, ABIS, ABI or other Fund agent will be liable for any
   loss, injury, damage or expense as a result of acting upon telephone
   instructions purporting to be on your behalf that ABIS reasonably believes
   to be genuine.

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

.  Telephone redemptions may not exceed $100,000 per Fund account per day.

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

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The Fund's Board has adopted policies and procedures designed to detect and
deter frequent purchases and redemptions of Fund shares or excessive or
short-term trading that may disadvantage long-term Fund shareholders. These
policies are described below. There is no guarantee that the Fund will be able
to detect excessive or short-term trading or to identify shareholders engaged
in such practices, particularly with respect to transactions in omnibus
accounts. Shareholders should be aware that application of these policies may
have adverse consequences, as described below, and avoid frequent trading in
Fund shares through purchases, sales and exchanges of shares. 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 Fund's shares dilute the value of shares held by long-term
shareholders. Volatility resulting from excessive purchases and sales or
exchanges of Fund shares, especially involving large dollar amounts, may
disrupt efficient portfolio management and cause the Fund to sell shares at
inopportune times to raise cash to accommodate redemptions relating to
short-term trading activity. In particular, the Fund 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. In addition, the Fund may incur increased administrative and
other expenses due to excessive or short-term trading, including increased
brokerage costs and realization of taxable capital gains.

While the Fund does not typically invest significantly in securities of foreign
issuers, these securities may be particularly susceptible to short-term trading
strategies. This is because securities of foreign issuers are typically traded
on markets that close well before the time the Fund ordinarily 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 Fund share prices that are based on closing prices of securities
of foreign issuers established some time before the Fund 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
securities of foreign issuers to reflect what is believed to be the fair value
of those securities at the time the Fund 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 Fund shareholders.

A shareholder engaging in a short-term trading strategy may also target the
Fund irrespective of its investments in securities of foreign issuers. Any Fund
that invests in securities that are, among other things, thinly traded, traded
infrequently or relatively illiquid has 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"). The Fund may be
adversely affected by price arbitrage.

                                                                             21




POLICY REGARDING SHORT-TERM TRADING. Purchases and exchanges of shares of the
Fund should be made for investment purposes only. The Fund seeks to prevent
patterns of excessive purchases and sales of Fund shares to the extent they are
detected by the procedures described below, subject to the Fund's ability to
monitor purchase, sale and exchange activity. 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.

.  TRANSACTION SURVEILLANCE PROCEDURES. The Fund, through its agents, ABI and
   ABIS, maintain surveillance procedures to detect excessive or short-term
   trading in Fund shares. This surveillance process involves several factors,
   which include scrutinizing transactions in Fund shares that exceed certain
   monetary thresholds or numerical limits within a specified period of time.
   Generally, more than two exchanges of Fund shares during any 60-day period
   or purchases of shares followed by a sale within 60 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. With
   respect to managed or discretionary accounts for which the account owner
   gives his/her broker, investment adviser or other third party authority to
   buy and sell Fund shares, the Fund may consider trades initiated by the
   account owner, such as trades initiated in connection with bona fide cash
   management purposes, separately in their analysis. 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.

.  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 Fund will take remedial action that may
   include issuing a warning, revoking certain account-related privileges (such
   as the ability to place purchase, sale and exchange orders over the internet
   or by phone) or prohibiting or "blocking" future purchase or exchange
   activity. However, sales of Fund shares back to the Fund or redemptions will
   continue to be permitted in accordance with the terms of the Fund's current
   Prospectus. As a result, unless the shareholder redeems his or her shares,
   which may have consequences if the shares have declined in value, a CDSC is
   applicable or adverse tax consequences may result, the shareholder may be
   "locked" into an unsuitable investment. A blocked account will generally
   remain blocked for 90 days. Subsequent detections of excessive or short-term
   trading may result in an indefinite account block or an account block until
   the account holder or the associated broker, dealer or other 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.

.  APPLICATIONS OF SURVEILLANCE PROCEDURES AND RESTRICTIONS TO OMNIBUS
   ACCOUNTS. Omnibus account arrangements are common forms of holding shares of
   the Fund, particularly among certain brokers, dealers and other financial
   intermediaries, including sponsors of retirement plans. The Fund applies its
   surveillance procedures to these omnibus account arrangements. As required
   by Commission rules, the Fund has entered into agreements with all of its
   financial intermediaries that require the financial intermediaries to
   provide the Fund, upon the request of the Fund or its agents, with
   individual account level information about their transactions. If the Fund
   detects excessive trading through its monitoring of omnibus accounts,
   including trading at the individual account level, the financial
   intermediaries will also execute instructions from the Fund to take actions
   to curtail the activity, which may include applying blocks to accounts to
   prohibit future purchases and exchanges of Fund 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 Fund 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).

HOW THE FUND VALUES ITS SHARES
The Fund's NAV is calculated on any day the Exchange is open at the close of
regular trading (ordinarily, 4:00 p.m., Eastern time, but sometimes earlier, as
in the case of scheduled half-day trading or unscheduled suspensions of
trading). To calculate NAV, the Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets, is divided by
the number of shares outstanding. If the Fund invests in securities that are
primarily traded on foreign exchanges that trade on weekends or other days when
the Fund does not price its shares, the NAV of the Fund's shares may change on
days when shareholders will not be able to purchase or redeem their shares in
the Fund.

The Fund 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 Board. When the Fund
uses fair value pricing, it may take into account any factors it deems
appropriate. The Fund may determine fair value based upon developments related
to a specific security and/or U.S. sector or broader stock market indices. The
prices of securities used by the Fund 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.

22



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

INVESTMENT ADVISER
The Fund's investment adviser is AllianceBernstein L.P. (the "Adviser"), 1345
Avenue of the Americas, New York, New York 10105. The Adviser is a leading
international investment adviser supervising client accounts with assets as of
September 30, 2013 totaling approximately $445 billion (of which more than $88
billion represented assets of investment companies). As of September 30, 2013,
the Adviser managed retirement assets for many of the largest public and
private employee benefit plans (including 16 of the nation's FORTUNE 100
companies), for public employee retirement funds in 26 states and the District
of Columbia, for investment companies, and for foundations, endowments, banks
and insurance companies worldwide. The 33 registered investment companies
managed by the Adviser, comprising approximately 119 separate investment
portfolios, currently have approximately 2.6 million shareholder accounts.

The Adviser provides investment advisory services and order placement
facilities for the Fund. For these advisory services, the Fund will pay the
Adviser a fee at an annualized rate of .50% of the Fund's average net assets.
The Adviser has agreed to waive its management fees and/or to bear expenses of
the Fund through December 11, 2014 to the extent necessary to prevent total
Fund operating expenses, on an annualized basis, from exceeding .85% on Class A
shares, 1.55% on Class C shares and .55% on Advisor Class shares (excluding
expenses associated with securities sold short, acquired fund fees and expenses
other than the advisory fees of any AllianceBernstein Mutual Funds in which the
Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage
commissions and other transaction costs).

Fees waived and expenses borne by the Adviser are subject to reimbursement
until December 11, 2016. No reimbursement payment will be made that would cause
the Fund's total annualized operating expenses to exceed the net fee
percentages set forth in "Fees and Expenses of the Fund" or cause the total of
the payments to exceed the Fund's total initial offering expenses.

The Adviser may act as an investment adviser to other persons, firms or
corporations, including investment companies, hedge funds, pension funds and
other institutional investors. The Adviser may receive management fees,
including performance fees, that may be higher or lower than the advisory fees
it receives from the Fund. Certain other clients of the Adviser may have
investment objectives and policies similar to those of the Fund. The Adviser
may, from time to time, make recommendations that result in the purchase or
sale of a particular security by its other clients simultaneously with the
Fund. If transactions on behalf of more than one client during the same period
increase the demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price or quantity. It is the
policy of the Adviser to allocate advisory recommendations and the placing of
orders in a manner that is deemed equitable by the Adviser to the accounts
involved, including the Fund. When two or more of the clients of the Adviser
(including the Fund) are purchasing or selling the same security on a given day
from the same broker-dealer, such transactions may be averaged as to price.

PORTFOLIO MANAGERS
The day-to-day management of, and investment decisions for, the Fund are made
by its senior investment management team. The team relies heavily on the
fundamental analysis and research of the Adviser's large internal research
staff. No one person is principally responsible for making recommendations for
the Fund's investments.

The following table lists the persons on the Fund's investment management team
with the most significant responsibility for the day-to-day management of the
Fund's portfolio, the length of time that each person has been jointly and
primarily responsible for the Fund, and each person's principal occupation
during the past five years:

                                                   PRINCIPAL OCCUPATION DURING
EMPLOYEE; LENGTH OF SERVICE; TITLE                   THE PAST FIVE (5) YEARS
-------------------------------------------------------------------------------------
R.B. (Guy) Davidson, III; since 2013; Senior  Senior Vice President of the Adviser,
Vice President of the Adviser                 with which he has been associated in a
                                              substantially similar capacity to his
                                              current position since prior to 2008,
                                              and Director, Municipal Bonds.

Jon P. Denfeld, since 2013; Vice President    Vice President of the Adviser, with
of the Adviser                                which he has been associated in a
                                              substantially similar capacity to his
                                              current position since prior to 2008,
                                              and Senior Portfolio Manager, Liquid
                                              Markets.

Terrance T. Hults; since 2013; Senior Vice    Senior Vice President of the Adviser,
President of the Adviser                      with which he has been associated in a
                                              substantially similar capacity to his
                                              current position since prior to 2008,
                                              and Portfolio Manager, Tax Exempts.

Shawn E. Keegan; since 2013; Vice             Vice President of the Adviser, with
President of the Adviser                      which he has been associated in a
                                              substantially similar capacity to his
                                              current position since prior to 2008,
                                              and Portfolio Manager, U.S. Investment
                                              Grade Credit.

The Fund's SAI provides additional information about the Portfolio Managers'
compensation, other accounts managed by the Portfolio Managers, and the
Portfolio Managers' ownership of securities in the Fund.

PERFORMANCE OF SIMILARLY MANAGED ACCOUNTS
The investment team employed by the Adviser to manage the Fund's portfolio has
substantial experience in managing discretionary accounts of institutional
clients and pooled investment vehicles and portions thereof (the "Historical
Accounts") that have substantially the same investment objectives and policies
and are managed in accordance with essentially the same investment strategies
as the Fund. The Historical Accounts are not subject to certain limitations,
diversification requirements

24



and other restrictions imposed under the 1940 Act and the Internal Revenue Code
(the "Code") to which the Fund, as a registered investment company, is subject
and which, if applicable to the Historical Accounts, may have adversely
affected the performance of the Historical Accounts.

Set forth below is performance data provided by the Adviser relating to the
Historical Accounts managed by the investment team that manages the Fund's
assets. Performance data is shown for the period during which the investment
team of the Adviser managed the Historical Accounts through September 30, 2013.
The aggregate assets for the Historical Accounts managed by the investment team
as of September 30, 2013 were approximately $563 million. The investment team's
Historical Accounts have a nearly identical composition of representative
investment holdings and related percentage weightings. The performance data is
net of the estimated Annual Fund Operating Expenses of Class A shares of the
Fund (after fee waiver and expense reimbursements and not including any initial
sales charge or CDSC) as set forth in "Fees and Expenses of the Fund" in this
Prospectus, calculated on a monthly basis. Net-of-fee performance figures
reflect the compounding effect of such fees.

Class C shares of the Fund pay higher expenses associated with the distribution
of such shares in accordance with the plan adopted by the Board of the Fund
under Commission Rule 12b-1 than do Class A shares. The Adviser is not
obligated to extend the agreed-upon fee waivers and/or expense reimbursements
beyond December 11, 2014. The performance data has also not been adjusted for
corporate or individual taxes, if any, payable by account owners.

The Adviser has calculated the investment performance of the Historical
Accounts on a trade-date basis. Income has been accrued daily and cash flows
weighted daily. Composite investment performance for the Fund has been
determined on an asset-weighted basis. New accounts are included in the
composite investment performance computations at the beginning of the quarter
following the initial contribution. The total returns set forth below are
calculated using a method that links the monthly return amounts for the
disclosed periods, resulting in a time-weighted rate of return. Other methods
of computing the investment performance of the Historical Accounts may produce
different results, and the results for different periods may vary.

The Barclays Municipal Bond Index is used by the Fund and the Historical
Accounts, for purposes of this example, as a benchmark to measure their
relative performance. The Barclays Municipal Bond Index is an unmanaged index
comprising a broad range of investment-grade municipal bonds having remaining
maturities of greater than one year.

To the extent the investment team utilizes investment techniques such as swaps,
futures or options, the performance of the benchmark may not be substantially
comparable to the performance of the investment team's Historical Accounts. The
benchmark does not reflect the deduction of any fees or expenses associated
with the active management of a mutual fund.

The performance data below is provided solely to illustrate the investment
team's performance in managing the Historical Accounts as measured against a
broad-based market index. The performance of the Fund will be affected by the
performance of the investment team managing the Fund's assets. If the
investment team were to perform relatively poorly, the performance of the Fund
would suffer. Investors should not rely on the performance data of the
Historical Accounts as an indication of future performance of the Fund.

The investment performance for the periods presented may not be indicative of
future rates of return. The performance was not calculated pursuant to the
methodology established by the Commission that will be used to calculate the
Fund's performance. The use of methodology different from that used to
calculate performance could result in different performance data.

SCHEDULE OF HISTORICAL PERFORMANCE - HISTORICAL ACCOUNTS*

                                             TAX-AWARE FIXED   BARCLAYS
                                                 INCOME        MUNICIPAL
                                           HISTORICAL ACCOUNTS   BOND
                                             TOTAL RETURN**      INDEX
------------------------------------------------------------------------
Annual Performance--Year Ended
 December 31:
2012                                               7.15%          6.78%
2011                                               8.97%         10.70%
October 2010--December 2010                       -2.71%         -4.17%
Cumulative total return for the period
 October 1, 2010 (inception of Historical
 Accounts) to December 31, 2012                   13.46%         13.28%

*  Total return is a measure of investment performance that is based upon the
   change in value of an investment from the beginning to the end of a
   specified period and assumes reinvestment of all dividends and other
   distributions. The basis of presentation of this data is described in the
   preceding discussion.

** Net of Annual Fund Operating Expenses of Class A shares of the Fund (after
   fee waiver and expense reimbursement and not including any initial sales
   charge or CDSC).

AVERAGE ANNUAL TOTAL RETURNS AS OF SEPTEMBER 30, 2013

                                            1 YEAR 3 YEARS*
-----------------------------------------------------------
Tax-Aware Fixed Income Historical Accounts  -2.69%   3.08%
Barclays Municipal Bond Index               -2.21%   3.24%

* Inception date of Historical Account is October 1, 2010.

TRANSFER AGENCY AND RETIREMENT PLAN SERVICES
ABIS acts as the transfer agent for the Fund. ABIS, an indirect wholly-owned
subsidiary of the Adviser, registers the transfer, issuance and redemption of
Fund shares and disburses dividends and other distributions to Fund
shareholders.

Many Fund shares are owned by financial intermediaries for the benefit of their
customers. Retirement plans may also hold Fund shares in the name of the plan,
rather than the participant. 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 and plan
recordkeepers. Financial intermediaries and recordkeepers, who may have
affiliated financial intermediaries who sell shares of the Fund, may be paid
for each

                                                                             25



plan participant portfolio account in amounts up to $19 per account per annum
and/or up to 0.25% per annum of the average daily assets held through the
intermediary. To the extent any of these payments for recordkeeping services or
transfer agency services are made by the Fund, they are included in the amount
appearing opposite the caption "Other Expenses" found in the Fund expense
tables under "Fees and Expenses of the Fund" in the Summary Information at the
beginning of this Prospectus. In addition, financial intermediaries may be
affiliates of entities that receive compensation from the Adviser
or ABI 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.

For more information, please refer to the Fund's SAI, call your financial
advisor or visit our website at www.AllianceBernstein.com.

26



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

DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends on its shares on each business day from the Fund's
net investment income. Dividends on shares for Saturdays, Sundays and holidays
will be declared on the previous business day. The Fund pays dividends on its
shares after the close of business on the last day of each month. At your
election (which you may change at least 30 days prior to the record date for a
particular dividend or distribution), dividends and distributions are paid in
cash or reinvested without charge in additional shares of the same class having
an aggregate NAV as of the payment date of the dividend or distribution equal
to the cash amount thereof.

If you receive an income dividend or capital gains distribution in cash, you
may, within 120 days following the date of its payment, reinvest the dividend
or distribution in additional shares of the Fund without charge by returning to
the Adviser, with appropriate instructions, the check representing the dividend
or distribution. Thereafter, unless you otherwise specify, you will be deemed
to have elected to reinvest all subsequent dividends and distributions in
shares of the Fund.

There is no fixed dividend rate and there can be no assurance that the Fund
will pay any dividends. The amount of any dividend distribution paid on shares
of the Fund must necessarily depend upon the realization of income and capital
gains from the Fund's investments.

TAXES
Distributions to shareholders out of tax-exempt interest income earned by the
Fund are not subject to federal income tax. Under current tax law, some
individuals and corporations may be subject to the AMT on distributions to
shareholders out of income from the AMT-Subject bonds in which the Fund
invests. Further, under current tax law, certain corporate taxpayers may be
subject to the AMT based on their "adjusted current earnings". Distributions
from the Fund that are excluded from gross income will generally be included in
such corporation's "adjusted current earnings" for purposes of computation of
the AMT. Distributions out of taxable interest, other investment income, and
net realized short-term capital gains are taxable to shareholders as ordinary
income. Any distributions of long-term capital gains generally will be taxable
to you as long-term capital gains regardless of how long you have held your
shares. Since the Fund's investment income is derived from interest rather than
dividends, no portion of its distributions will be eligible for the
dividends-received deduction available to corporations, and for non-corporate
shareholders no portion of such distributions will be treated as "qualified
dividend income" taxable at the same potential tax rates applicable to
long-term capital gains.

The Fund anticipates that a substantial portion of its dividends will be exempt
from regular federal income taxes. Shareholders may be subject to state and
local taxes on distributions from the Fund, including distributions that are
exempt from federal income taxes.

Interest on indebtedness incurred by shareholders to purchase or carry shares
of the Fund is not deductible for federal income tax purposes. Further, persons
who are "substantial users" (or related persons) of facilities financed by
AMT-Subject bonds should consult their tax advisers before purchasing shares of
the Fund.

If you buy shares just before the Fund deducts a distribution from its NAV, you
will pay the full price for the shares and then receive a portion of the price
back as a distribution, which may be taxable.

For tax purposes, an exchange is treated as a sale of Fund shares. The sale or
exchange of Fund shares is a taxable transaction for federal income tax
purposes.

Each investor should consult his or her own tax adviser to determine the tax
status, with regard to his or her tax situation, of distributions from the Fund.

                                                                             27



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

Under unusual circumstances, the Fund may suspend redemptions or postpone
payment for up to seven days or longer, as permitted by federal securities law.
Generally, the Fund reserves the right to close an account that has remained
below $1,000 for 90 days.

During drastic economic or market developments, you might have difficulty in
reaching ABIS by telephone, in which event you should issue written
instructions to ABIS. ABIS is not responsible for the authenticity of telephone
requests to purchase, sell, or exchange shares. ABIS will employ reasonable
procedures to verify that telephone requests are genuine, and could be liable
for losses resulting from unauthorized transactions if it failed to do so.
Dealers and agents may charge a commission for handling telephone requests. The
telephone service may be suspended or terminated at any time without notice.

Shareholder Services. ABIS offers a variety of shareholder services. For more
information about these services or your account, call ABIS's toll-free number,
800-221-5672. Some services are described in the Mutual Fund Application.

Householding. Many shareholders of the AllianceBernstein Mutual Funds have
family members living in the same home who also own shares of the same Funds.
In order to reduce the amount of duplicative mail that is sent to homes with
more than one Fund account and to reduce expenses of the Fund, all
AllianceBernstein Mutual Funds will, until notified otherwise, send only one
copy of each prospectus, shareholder report and proxy statement to each
household address. This process, known as "householding", does not apply to
account statements, confirmations, or personal tax information. If you do not
wish to participate in householding, or wish to discontinue householding at any
time, call ABIS at 1-800-221-5672. We will resume separate mailings for your
account within 30 days of your request.

28



APPENDIX A
--------------------------------------------------------------------------------

HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION
--------------------------------------------------------------------------------

A settlement agreement between the Adviser and the New York State Attorney
General requires the Fund to include the following supplemental hypothetical
investment information, which provides additional information calculated and
presented in a manner different from expense information found under "Fees and
Expenses of the Fund" in this Prospectus, about the effect of the Fund's
expenses, including investment advisory fees and other Fund costs, on the
Fund's returns over a 10-year period. The chart shows the estimated expenses
(net of any fee or expense waiver for the first year) that would be charged on
a hypothetical investment of $10,000 in Class A shares of the Fund assuming a
5% return each year, including an initial sales charge of 3.00%. Except as
otherwise indicated, the chart also assumes that the current annual expense
ratio stays the same throughout the 10-year period. The current annual expense
ratio for the Fund is the same as stated under "Financial Highlights". If you
wish to obtain hypothetical investment information for other classes of shares
of the Fund, please refer to the "Investor Resources--Calculators--Mutual
Funds--Hypothetical Fee and Expense Calculator" on www.AllianceBernstein.com.
Your actual expenses may be higher or lower.

TAX-AWARE FIXED INCOME PORTFOLIO
--------------------------------------------------------------------------------
                            HYPOTHETICAL INVESTMENT              HYPOTHETICAL
               HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING
   YEAR         INVESTMENT    EARNINGS    RETURNS    EXPENSES*    INVESTMENT
   --------------------------------------------------------------------------
   1            $10,000.00   $  485.00   $10,185.00  $  386.57    $10,098.43
   2             10,098.43      504.92    10,603.35     131.48     10,471.87
   3             10,471.87      523.59    10,995.46     136.34     10,859.12
   4             10,859.12      542.96    11,402.08     141.39     11,260.69
   5             11,260.69      563.03    11,823.72     146.61     11,677.11
   6             11,677.11      583.86    12,260.97     152.04     12,108.93
   7             12,108.93      605.45    12,714.38     157.66     12,556.72
   8             12,556.72      627.84    13,184.56     163.49     13,021.07
   9             13,021.07      651.05    13,672.12     169.53     13,502.59
   10            13,502.59      675.13    14,177.72     175.80     14,001.92
   --------------------------------------------------------------------------
   Cumulative                $5,762.83               $1,760.91

*Expenses are net of any fee waiver or expense waiver until December 11,
 2014, per the Adviser's fee waiver agreement. Thereafter, the expense ratio
 reflects the Fund's operating expenses as reflected under "Fees and Expenses
 of the Fund" before waiver.

                                                                            A-1



For more information about the Fund, the following document is available upon
request:

.  STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Fund's SAI is
incorporated by reference into (and is legally part of) this Prospectus.

You may request a free copy of the SAI, or make inquiries concerning the Fund,
by contacting your broker or other financial intermediary, or by contacting the
Adviser:

BY MAIL:          c/o AllianceBernstein Investor Services, Inc.
                  P.O. Box 786003
                  San Antonio, TX 78278-6003

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

ON THE INTERNET:  www.AllianceBernstein.com

Or you may view or obtain this document from the Securities and Exchange
Commission (the "Commission"):

.  Call the Commission at 1-202-551-8090 for information on the operation of
   the Public Reference Room.

.  Reports and other information about the Fund are available on the EDGAR
   Database on the Commission's Internet site at http://www.sec.gov.

.  Copies of the information may be obtained, after paying a duplicating fee,
   by electronic request at publicinfo@sec.gov, or by writing the Commission's
   Public Reference Section, Washington, DC 20549-0102.

AllianceBernstein and the AB Logo are registered trademarks and service marks
used by permission of the owner, AllianceBernstein L.P.

SEC File No. 811-02383
                                                                PRO-0116II-1213

                                    [GRAPHIC]