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Alliancebernstein High Income Fund Inc · 497 · On 2/4/11

Filed On 2/4/11 4:29pm ET · SEC File 33-72460 · Accession Number 919574-11-553

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 2/04/11  Alliancebernstein High Incom..Inc 497         2/04/11    1:326                                    Seward & Kissel LLP/FA

Definitive Material · Rule 497
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 497         Definitive Material                                  326± 1,313K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Additional Investment Policies and Practices Advisor Class Shares Alliancebernstein Global Bond Fund AllianceBernstein Global Bond Fund, Inc AllianceBernstein High Income Fund, Inc Alternative Purchase Arrangements Alternative Purchase Arrangements - Group Retirement Plans and Tax-Deferred Accounts Appendix A Appendix B Asset-Based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees Automatic Investment Program Backup Withholding Bond Ratings CDSC Waivers and Other Programs Class A Shares Class B Shares Class C shares Class I shares Class K shares Class R shares Combined Purchase Privilege Contingent Deferred Sales Charge Conversion Feature Derivatives Different Share Class Expenses, The Distribution Arrangements for Group Retirement Plans Dividends, Distributions and Taxes Expenses of the Funds Fees and Expenses of the Fund Financial Highlights Financial Statements and Report of Independent Registered Public Accounting Firm Forward Commitments and When-Issued and Delayed Delivery Securities Frequent Purchases and Redemptions of Fund Shares Funds' investments in derivatives may include, but are not limited to, the following:, The Fund Transactions General General Information Global Bond Glossary of Investment Terms High Income Householding How the Funds Value Their Shares How to Buy Shares How to Exchange Shares How to Sell or Redeem Shares Hypothetical Investment and Expense Information Illiquid Securities Independent Directors Information About the Funds and Their Investments Intermediate Bond Investing in the Funds Management of the Funds Mortgage-Related Securities and Other Asset-Backed Securities Net Asset Value Payments to Financial Advisors and Their Firms Payments to Financial Intermediaries Portfolio Managers "Pros" and "Cons" of Different Share Classes, The Purchase of Shares Redemption and Repurchase of Shares Retirement Plans, Tax-Deferred Accounts and Employee Benefit Plans Sales Charge Reduction Programs Shareholder Services Structured Securities Summary Information Systematic Withdrawal Plan Table of Contents The Different Share Class Expenses The Funds' investments in derivatives may include, but are not limited to, the following: The "Pros" and "Cons" of Different Share Classes Transfer Agency Agreement Transfer Agency and Retirement Plan Services Unconstrained Bond Zero Coupon Securities
1	1st Page - Filing Submission
2	Alliancebernstein Global Bond Fund
4	Table of Contents
5	Summary Information
"	Fees and Expenses of the Fund
"	Class B Shares
27	Derivatives
"	The Funds' investments in derivatives may include, but are not limited to, the following:
30	Illiquid Securities
36	Investing in the Funds
"	How to Buy Shares
"	Advisor Class Shares
"	Retirement Plans, Tax-Deferred Accounts and Employee Benefit Plans
37	General
"	The Different Share Class Expenses
"	Asset-Based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees
38	Sales Charge Reduction Programs
40	CDSC Waivers and Other Programs
"	Automatic Investment Program
"	Systematic Withdrawal Plan
"	The "Pros" and "Cons" of Different Share Classes
41	Payments to Financial Advisors and Their Firms
42	How to Exchange Shares
"	How to Sell or Redeem Shares
43	Frequent Purchases and Redemptions of Fund Shares
44	How the Funds Value Their Shares
45	Management of the Funds
"	Portfolio Managers
49	Transfer Agency and Retirement Plan Services
50	Dividends, Distributions and Taxes
51	General Information
"	Shareholder Services
"	Householding
52	Glossary of Investment Terms
53	Financial Highlights
55	Intermediate Bond
57	Global Bond
59	High Income
62	Appendix A
"	Bond Ratings
65	Appendix B
"	Hypothetical Investment and Expense Information
98	Class A Shares
"	Distribution Arrangements for Group Retirement Plans
"	Payments to Financial Intermediaries
122	AllianceBernstein High Income Fund, Inc
"	AllianceBernstein Global Bond Fund, Inc
124	Information About the Funds and Their Investments
"	Additional Investment Policies and Practices
"	Forward Commitments and When-Issued and Delayed Delivery Securities
"	Mortgage-Related Securities and Other Asset-Backed Securities
"	Structured Securities
"	Zero Coupon Securities
"	Independent Directors
"	Unconstrained Bond
"	Expenses of the Funds
125	Transfer Agency Agreement
"	Purchase of Shares
"	Alternative Purchase Arrangements
"	Conversion Feature
"	Class C shares
"	Contingent Deferred Sales Charge
"	Class R shares
"	Class K shares
"	Class I shares
"	Alternative Purchase Arrangements - Group Retirement Plans and Tax-Deferred Accounts
"	Combined Purchase Privilege
"	Redemption and Repurchase of Shares
126	Net Asset Value
"	Backup Withholding
"	Fund Transactions
133	Financial Statements and Report of Independent Registered Public Accounting Firm

497 1st "Page" of 133 TOC Top Previous Next Bottom Just 1st
 






This is filed pursuant to Rule 497(c).                                          
File No. 33-72460 and 811-08188.                                                

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BOND FUNDS (A, B, C AND ADVISOR CLASS SHARES)                                   

PROSPECTUS  |  JANUARY 31, 2011                                                 

The AllianceBernstein Bond Funds                                                

                                                        [Enlarge/Download Table]
                                                                                               
Stability                                          Absolute Return                             
(Shares Offered--Exchange Ticker Symbol)           (Shares Offered--Exchange Ticker Symbol)    

    AllianceBernstein Short Duration Portfolio         AllianceBernstein Diversified Yield Fund
    (Class A-ADPAX; Class B-ADPBX; Class C-ADPCX)      (Class A-AGSAX; Class B-AGSBX;          
                                                         Class C-AGCCX; Advisor Class-AGSIX)   

Core                                               High Income                                 
(Shares Offered--Exchange Ticker Symbol)           (Shares Offered--Exchange Ticker Symbol)    

    AllianceBernstein Intermediate Bond Portfolio      AllianceBernstein High Income Fund      
    (Class A-ABQUX; Class B-ABQBX;                     (Class A-AGDAX; Class B-AGDBX;          
      Class C-ABQCX; Advisor Class-ABQYX)                Class C-AGDCX; Advisor Class-AGDYX)   

    AllianceBernstein Global Bond Fund                                                         
    (Class A-ANAGX; Class B-ANABX;                                                             
      Class C-ANACX; Advisor Class-ANAYX)                                                      

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

[LOGO]                                                                
AB                                                                
ALLIANCEBERNSTEIN                                                               

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INVESTMENT PRODUCTS OFFERED                                                     
..  ARE NOT FDIC INSURED                                                        
..  MAY LOSE VALUE                                                              
..  ARE NOT BANK GUARANTEED                                                     

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TABLE OF CONTENTS                                                               
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                               Page
                                                                   
SUMMARY INFORMATION...........................................   4 
STABILITY                                                          
  ALLIANCEBERNSTEIN SHORT DURATION PORTFOLIO..................   4 
CORE                                                               
  ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO...............   8 
  ALLIANCEBERNSTEIN GLOBAL BOND FUND..........................  12 
ABSOLUTE RETURN                                                    
  ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND....................  16 
HIGH INCOME                                                        
  ALLIANCEBERNSTEIN HIGH INCOME FUND..........................  20 
ADDITIONAL INFORMATION ABOUT THE FUNDS' RISKS AND INVESTMENTS.  26 
INVESTING IN THE FUNDS........................................  35 
  How to Buy Shares...........................................  35 
  The Different Share Class Expenses..........................  36 
  Sales Charge Reduction Programs.............................  37 
  CDSC Waivers and Other Programs.............................  39 
  The "Pros" and "Cons" of Different Share Classes............  39 
  Payments to Financial Advisors and Their Firms..............  40 
  How to Exchange Shares......................................  41 
  How to Sell or Redeem Shares................................  41 
  Frequent Purchases and Redemptions of Fund Shares...........  42 
  How the Funds Value Their Shares............................  43 
MANAGEMENT OF THE FUNDS.......................................  44 
DIVIDENDS, DISTRIBUTIONS AND TAXES............................  49 
GENERAL INFORMATION...........................................  50 
GLOSSARY OF INVESTMENT TERMS..................................  51 
FINANCIAL HIGHLIGHTS..........................................  52 
APPENDIX A--BOND RATINGS...................................... A-1 
APPENDIX B--HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION... B-1 

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SUMMARY INFORMATION                                                             
--------------------------------------------------------------------------------

ALLIANCEBERNSTEIN SHORT DURATION PORTFOLIO                                      
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund seeks to provide safety of principal and a moderate rate of return     
that is subject to taxes.                                                       

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 Funds--Sales Charge Reduction Programs on page 37 of this Prospectus and 
in Purchase of Shares--Sales Charge Reduction Programs on page 43 of the Fund's 
Statement of Additional Information ("SAI").                                    

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                        CLASS B SHARES          
                                                                                        (NOT CURRENTLY          
                                                                                CLASS A   OFFERED TO   CLASS C  
                                                                                SHARES  NEW INVESTORS) SHARES   
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                
(as a percentage of offering price)                                              4.25%        None        None  
----------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                            
(as a percentage of offering price or redemption proceeds, whichever is lower)   None       3.00%(a)    1.00%(b)
----------------------------------------------------------------------------------------------------------------
Exchange Fee                                                                     None         None        None  

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

                                                                [Download Table]

                                          CLASS A CLASS B CLASS C
-----------------------------------------------------------------
                                                                 
Management Fees                            .45%     .45%    .45% 
Distribution and/or Service (12b-1) Fees   .30%    1.00%   1.00% 
Other Expenses:                                                  
  Transfer Agent                           .10%     .15%    .11% 
  Other Expenses                           .09%     .09%    .09% 
                                           ----    -----   ----- 
Total Other Expenses                       .19%     .24%    .20% 
                                           ----    -----   ----- 
Total Annual Fund Operating Expenses       .94%    1.69%   1.65% 
                                           ====    =====   ===== 
-----------------------------------------------------------------

(a)Class B shares automatically convert to Class A shares after six years. The  
 contingent deferred sales charge, or CDSC, decreases over time. For Class B
shares, the CDSC decreases 1.00% annually to 0% after the third year.     

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

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 and that the Fund's operating expenses     
stay the same. Although your actual costs may be higher or lower, based on      
these assumptions your costs would be:                                          

                                                                [Download Table]

                CLASS A CLASS B CLASS C
---------------------------------------
                                       
After 1 Year    $  517  $  472  $  268 
After 3 Years   $  712  $  633  $  520 
After 5 Years   $  923  $  918  $  897 
After 10 Years  $1,531  $1,616  $1,955 
---------------------------------------

4                                                                               

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You would pay the following expenses if you did not redeem your shares at the   
end of period:                                                                  

                                                                [Download Table]

                CLASS A CLASS B CLASS C
---------------------------------------
                                       
After 1 Year    $  517  $  172  $  168 
After 3 Years   $  712  $  533  $  520 
After 5 Years   $  923  $  918  $  897 
After 10 Years  $1,531  $1,616  $1,955 
---------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 107% of the average value of its portfolio.                   

PRINCIPAL STRATEGIES                                                            
The Fund invests at least 80% of its total assets in securities rated A or      
better by national ratings agencies (or, if unrated, determined by the Adviser  
to be of comparable quality) and comparably rated commercial paper and notes.   
The Fund may purchase many types of fixed-income securities, including          
corporate bonds, notes, U.S. Government and agency securities, asset-backed     
securities, mortgage-related securities, inflation-protected securities, loan   
participations and preferred stock, as well as others. The Fund also may invest 
up to 20% of its total assets in foreign fixed-income securities in developed   
or emerging market countries. The Fund also may invest up to 20% of its total   
assets in fixed-income securities rated BB or B by national rating agencies,    
which are not investment grade.                                                 

The Fund may invest up to 20% of its fixed-income securities rated BB or B by   
national rating agencies, which are not investment grade (commonly known as     
"junk bonds").                                                                  

The Fund seeks to maintain an effective duration of one to three years under    
normal market conditions. Duration is a measure that related the expected price 
volatility of a security to changes in interest rates. The duration of a debt   
security is the weighted average time to maturity expressed in years, of the    
present value of all future cash flows, including coupon payments and principal 
repayments. Thus, by definition, duration is always less than or equal to full  
maturity.                                                                       

In managing the Fund, the Adviser may use interest rate forecasting to          
determine the best level of interest rate risk at a given time. The Fund may    
moderately shorten its average duration when the Adviser expects interest rates 
to rise and modestly lengthen its average duration when the Adviser anticipates 
that rates will fall.                                                           

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund may invest, without limit, in derivatives, such as options, futures,   
forwards and swaps. The Fund also may invest up to 20% of its assets in         
structured instruments, which have characteristics of futures, options,         
currencies, and securities.                                                     

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

..  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.                                                             

                                                                           5

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..  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. Investments in      
fixed-income securities with lower ratings ("junk bonds") tend to have a  
higher probability that an issuer will default or fail to meet its payment
obligations.                                                              

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  PREPAYMENT RISK: The value of mortgage-related or 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.                           

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its net   
asset value, or NAV, may be more volatile because leverage tends to       
exaggerate the effect of changes in interest rates and any increase or    
decrease in the value of the Fund's investments.                          

..  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: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over the life of the   
Fund; and                                                                 

..  how the Fund's average annual returns for one and five years and over the   
 life of the Fund compare to those of a broad-based securities market index.

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

The Fund's past performance before and after taxes, of course, does not         
necessarily indicate how it will perform in the future.                         

6                                                                               

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

[CHART] 

01     02     03     04     05     06     07     08      09     10      
----   ----   ----   ----   ----   ----   ----   ------  ----   ----      
n/a    n/a    n/a   0.92   1.02   3.75   3.50   -4.18   6.52   2.90     

Calendar Year End (%) 

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 2.32% IN THE 3RD QUARTER, 2009; AND WORST QUARTER WAS DOWN  
-1.79% IN THE 1ST QUARTER, 2008.                                                

PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                                         SINCE   
                                                                        1 YEAR 5 YEARS INCEPTION*
-------------------------------------------------------------------------------------------------
                                                                                                 
Class A**  Return Before Taxes                                          -1.48%  1.54%    1.37%   
           --------------------------------------------------------------------------------------
           Return After Taxes on Distributions                          -1.90%  0.44%    0.33%   
           --------------------------------------------------------------------------------------
           Return After Taxes on Distributions and Sale of Fund Shares  -0.96%  0.67%    0.56%   
-------------------------------------------------------------------------------------------------
Class B    Return Before Taxes                                          -0.77%  1.72%    1.38%   
-------------------------------------------------------------------------------------------------
Class C    Return Before Taxes                                           1.18%  1.73%    1.23%   
-------------------------------------------------------------------------------------------------
BofA Merrill Lynch 1-3 Year Treasury Index                                                       
(reflects no deduction for fees, expenses, or taxes)                     2.35%  4.17%    3.17%   
-------------------------------------------------------------------------------------------------

* Inception date for Class A, Class B and Class C shares: 5/21/03.              

**After-tax returns:                                                            

-Are shown for Class A shares only and will vary for Class B and Class C  
shares because these Classes have different expense ratios;             

-Are an estimate, which is based on the highest historical individual     
federal marginal income tax rates and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual       
investor's tax situation and are likely to differ from those shown; and 

-Are not relevant to investors who hold Fund shares through tax-deferred  
arrangements such as 401(k) plans or individual retirement accounts.    

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

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

                                                                [Download Table]

EMPLOYEE            LENGTH OF SERVICE  TITLE                                
----------------------------------------------------------------------------
                                                                            
Jon P. Denfeld         Since 2008      Vice President of the Adviser        

Shawn E. Keegan        Since 2005      Vice President of the Adviser        

Alison M. Martier      Since 2009      Senior Vice President of the Adviser 

Douglas J. Peebles     Since 2009      Senior Vice President of the Adviser 

Greg J. Wilensky       Since 2009      Senior Vice President of the Adviser 

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 25 in this Prospectus.                                     

                                                                           7

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ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate income and price appreciation    
without assuming what the Adviser considers undue risk.                         

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 Funds--Sales Charge Reduction Programs on page 37 of this Prospectus and 
in Purchase of Shares--Sales Charge Reduction Programs on page 108 of the       
Funds' SAI.                                                                     

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                               CLASS B SHARES                            
                                                   CLASS A (NOT CURRENTLY OFFERED CLASS C   ADVISOR CLASS
                                                   SHARES    TO NEW INVESTORS)    SHARES       SHARES    
---------------------------------------------------------------------------------------------------------
                                                                                                         
Maximum Sales Charge (Load) Imposed on Purchases                                                         
(as a percentage of offering price)                 4.25%            None            None       None     
---------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                     
(as a percentage of offering price or redemption                                                         
proceeds, whichever is lower)                       None           3.00%(a)        1.00%(b)     None     
---------------------------------------------------------------------------------------------------------
Exchange Fee                                        None             None            None       None     

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

                                                        [Enlarge/Download Table]

                                                                                       CLASS A CLASS B CLASS C ADVISOR CLASS
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
Management Fees                                                                          .45%    .45%    .45%       .45%    
Distribution and/or Service (12b-1) Fees                                                 .30%   1.00%   1.00%       None    
Other Expenses:                                                                                                             
  Transfer Agent                                                                         .17%    .22%    .18%       .17%    
  Interest Expense and Related Expenses                                                  .06%    .07%    .06%       .05%    
  Other Expenses                                                                         .13%    .14%    .14%       .13%    
                                                                                       ------  ------  ------     ------    
Total Other Expenses                                                                     .36%    .43%    .38%       .35%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses                                                    1.11%   1.88%   1.83%       .80%    
                                                                                       ======  ======  ======     ======    
  Fee Waiver and/or Expense Reimbursement(c)                                           (.20)%  (.26)%  (.22)%     (.20)%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(d)    .91%   1.62%   1.61%       .60%    
                                                                                       ======  ======  ======     ======    
----------------------------------------------------------------------------------------------------------------------------

(a)Class B shares automatically convert to Class A shares after six years. The  
CDSC decreases over time. For Class B shares, the CDSC decreases 1.00%    
annually to 0% after the third year.                                      

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

(c)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(d)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS B CLASS C ADVISOR CLASS
-------------------------------------
                                     
 .85%    1.55%   1.55%      .55%     

8                                                                               

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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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  514  $  465  $  264      $ 61     
After 3 Years   $  744  $  666  $  554      $235     
After 5 Years   $  992  $  992  $  970      $425     
After 10 Years  $1,702  $1,794  $2,130      $971     
-----------------------------------------------------

You would pay the following expenses if you did not redeem your shares at the   
end of period:                                                                  

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  514  $  165  $  164      $ 61     
After 3 Years   $  744  $  566  $  554      $235     
After 5 Years   $  992  $  992  $  970      $425     
After 10 Years  $1,702  $1,794  $2,130      $971     
-----------------------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 99% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund invests, under normal circumstances, at least 80% of its net assets in 
fixed-income securities. The Fund expects to invest in readily marketable       
fixed-income securities with a range of maturities from short- to long-term and 
relatively attractive yields that do not involve undue risk of loss of capital. 
The Fund expects to invest in fixed-income securities with a dollar-weighted    
average maturity of between three to ten years and an average duration of three 
to six years. The Fund may invest up to 25% of its net assets in below          
investment grade bonds. The Fund may use leverage for investment purposes.      

The Fund may invest without limit in U.S. Dollar-denominated foreign            
fixed-income securities and may invest up to 25% of its assets in               
non-U.S. Dollar-denominated foreign fixed-income securities. These investments  
may include, in each case, developed and emerging market debt securities.       

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund intends, among other things,  
to enter into transactions such as reverse repurchase agreements and dollar     
rolls. The Fund may invest, without limit, in derivatives, such as options,     
futures, forwards, or swap agreements.                                          

The Fund expects to engage in active and frequent trading of portfolio          
securities to achieve its principal investment strategies. A higher rate of     
portfolio turnover increases transaction expenses, which may negatively affect  
the Fund's performance. High portfolio turnover also may result in the          
realization of substantial net short-term capital gains, which, when            
distributed, are taxable to shareholders.                                       

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

                                                                           9

497 11th "Page" of 133 TOC 1st Previous Next Bottom Just 11th

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  PREPAYMENT RISK: The value of mortgage-related or 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.                           

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

The Fund's past performance before and after taxes, of course, does not         
necessarily indicate how it will perform in the future.                         

10                                                                              

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

[CHART] 

01     02     03     04     05     06     07      08      09     10     
----   ----   ----   ----   ----   ----   ----   -----   -----   ----     
7.36   7.67   3.69   3.48   1.94   3.97   5.68   -8.26   19.18   9.20     

Calendar Year End (%) 

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 7.86% IN THE 3RD QUARTER, 2009; AND WORST QUARTER WAS DOWN  
-4.57% IN THE 3RD QUARTER, 2008.                                                

PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                            1 YEAR 5 YEARS 10 YEARS
---------------------------------------------------------------------------------------------------
                                                                                                   
Class A*       Return Before Taxes                                          4.61%   4.67%   4.74%  
               ------------------------------------------------------------------------------------
               Return After Taxes on Distributions                          3.21%   3.09%   3.06%  
               ------------------------------------------------------------------------------------
               Return After Taxes on Distributions and Sale of Fund Shares  2.97%   3.04%   3.03%  
---------------------------------------------------------------------------------------------------
Class B        Return Before Taxes                                          5.45%   4.95%   4.80%  
---------------------------------------------------------------------------------------------------
Class C        Return Before Taxes                                          7.46%   4.86%   4.47%  
---------------------------------------------------------------------------------------------------
Advisor Class  Return Before Taxes                                          9.52%   5.89%   5.50%  
---------------------------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Index                                                              
(reflects no deduction for fees, expenses, or taxes)                        6.54%   5.80%   5.84%  
---------------------------------------------------------------------------------------------------

* After-tax Returns:                                                            

-Are shown for Class A shares only and will vary for Class B, Class C and 
 Advisor Class shares because these Classes have different expense ratios.

-Are an estimate, which is based on the highest historical individual     
federal marginal income tax rates and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual       
investor's tax situation and are likely to differ from those shown; and 

-Are not relevant to investors who hold Fund shares through tax-deferred  
arrangements such as 401(k) plans or individual retirement accounts.    

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

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

                                                                [Download Table]

EMPLOYEE            LENGTH OF SERVICE  TITLE                                
----------------------------------------------------------------------------
                                                                            
Paul J. DeNoon         Since 2009      Senior Vice President of the Adviser 

Shawn E. Keegan        Since 2005      Vice President of the Adviser        

Alison M. Martier      Since 2005      Senior Vice President of the Adviser 

Douglas J. Peebles     Since 2007      Senior Vice President of the Adviser 

Greg J. Wilensky       Since 2005      Senior Vice President of the Adviser 

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 25 in this Prospectus.                                     

                                                                            11

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ALLIANCEBERNSTEIN GLOBAL BOND FUND                                              
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate current income consistent with   
preservation of capital.                                                        

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 Funds--Sales Charge Reduction Programs on page 37 of this Prospectus and 
in Purchase of Shares--Sales Charge Reduction Programs on page 108 of the       
Funds' SAI.                                                                     

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                               CLASS B SHARES                            
                                                   CLASS A (NOT CURRENTLY OFFERED CLASS C   ADVISOR CLASS
                                                   SHARES    TO NEW INVESTORS)    SHARES       SHARES    
---------------------------------------------------------------------------------------------------------
                                                                                                         
Maximum Sales Charge (Load) Imposed on Purchases                                                         
(as a percentage of offering price)                 4.25%            None            None       None     
---------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                     
(as a percentage of offering price or redemption                                                         
proceeds, whichever is lower)                       None           3.00%(a)        1.00%(b)     None     
---------------------------------------------------------------------------------------------------------
Exchange Fee                                        None             None            None       None     

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

                                                        [Enlarge/Download Table]

                                                                                       CLASS A CLASS B CLASS C ADVISOR CLASS
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
Management Fees                                                                          .50%    .50%    .50%       .50%    
Distribution and/or Service (12b-1) Fees                                                 .30%   1.00%   1.00%       None    
Other Expenses:                                                                                                             
  Transfer Agent                                                                         .10%    .12%    .10%       .10%    
  Interest Expense and Related Expenses                                                  .08%    .08%    .07%       .06%    
  Other Expenses                                                                         .04%    .06%    .06%       .06%    
                                                                                       ------  ------  ------     ------    
Total Other Expenses                                                                     .22%    .26%    .23%       .22%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses                                                    1.02%   1.76%   1.73%       .72%    
                                                                                       ======  ======  ======     ======    
  Fee Waiver and/or Expense Reimbursement(c)                                           (.04)%  (.08)%  (.06)%     (.06)%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(d)    .98%   1.68%   1.67%       .66%    
                                                                                       ======  ======  ======     ======    
----------------------------------------------------------------------------------------------------------------------------

(a)Class B shares automatically convert to Class A shares after six years. The  
CDSC decreases over time. For Class B shares, the CDSC decreases 1.00%    
annually to 0% after the third year.                                      

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

(c)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year to year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(d)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS B CLASS C ADVISOR CLASS
-------------------------------------
                                     
 .90%    1.60%   1.60%      .60%     

12                                                                              

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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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  521  $  471  $  270      $ 67     
After 3 Years   $  732  $  646  $  539      $224     
After 5 Years   $  961  $  947  $  933      $395     
After 10 Years  $1,617  $1,692  $2,036      $889     
-----------------------------------------------------

You would pay the following expenses if you did not redeem your shares at the   
end of period:                                                                  

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  521  $  171  $  170      $ 67     
After 3 Years   $  732  $  546  $  539      $224     
After 5 Years   $  961  $  947  $  933      $395     
After 10 Years  $1,617  $1,692  $2,036      $889     
-----------------------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 69% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund invests, under normal circumstances, at least 80% of its net assets in 
fixed-income securities. Under normal market conditions, the Fund invests       
significantly in fixed-income securities of non-U.S. companies. In addition,    
the Fund invests, under normal circumstances, in the fixed-income securities of 
companies located in at least three countries. The Fund may invest in a broad   
range of fixed-income securities in both developed and emerging markets. The    
Fund may invest across all fixed-income sectors, including U.S. and non-U.S.    
government and corporate debt securities. The Fund's investments may be         
denominated in local currency or U.S. Dollar-denominated. The Fund may invest   
in debt securities with a range of maturities from short- to long-term. The     
Fund may use borrowings or other leverage for investment purposes.              

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Adviser will actively manage the Fund's assets in relation to market        
conditions and general economic conditions and adjust the Fund's investments in 
an effort to best enable the Fund to achieve its investment objective. Thus,    
the percentage of the Fund's assets invested in a particular country or         
denominated in a particular currency will vary in accordance with the Adviser's 
assessment of the relative yield and appreciation potential of such securities  
and the relationship of the country's currency to the U.S. Dollar.              

Under normal circumstances, the Fund invests at least 75% of its net assets in  
fixed-income securities rated investment grade at the time of investment and    
may invest up to 25% of its net assets in below investment grade fixed-income   
securities.                                                                     

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund intends, among other things,  
to enter into transactions such as reverse repurchase agreements and dollar     
rolls. The Fund may invest, without limit, in derivatives, such as options,     
futures, forwards, or swap agreements.                                          

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

                                                                            13

497 15th "Page" of 133 TOC 1st Previous Next Bottom Just 15th

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its NAV   
may be more volatile because leverage tends to exaggerate the effect of   
changes in interest rates and any increase or decrease in the value of the
Fund's investments.                                                       

..  DIVERSIFICATION RISK: The Fund may have more risk because it is             
"non-diversified," meaning that it can invest more of its assets in a     
smaller number of issuers and that adverse changes in the value of one    
security could have a more significant effect on the Fund's NAV.          

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

The Fund's past performance before and after taxes, of course, does not         
necessarily indicate how it will perform in the future.                         

14                                                                              

497 16th "Page" of 133 TOC 1st Previous Next Bottom Just 16th

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

[CHART] 

01     02     03     04     05     06     07      08     09     10      
----  -----  -----   ----   ----   ----   ----  ------  -----   ----      
0.31  10.68  15.13   6.87   9.71   6.57   9.90  -10.71  23.96   9.53      

Calendar Year End (%) 

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 11.30% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN 
-5.57% IN THE 4TH QUARTER, 2008.                                                

PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                              1 YEAR 5 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------
                                                                                                     
Class A*         Return Before Taxes                                           4.90%  6.34%   7.38%  
                 ------------------------------------------------------------------------------------
                 Return After Taxes on Distributions                           3.55%  4.39%   4.85%  
                 ------------------------------------------------------------------------------------
                 Return After Taxes on Distributions and Sale of Fund Shares   3.16%  4.23%   4.74%  
-----------------------------------------------------------------------------------------------------
Class B          Return Before Taxes                                           5.78%  6.53%   7.35%  
-----------------------------------------------------------------------------------------------------
Class C          Return Before Taxes                                           7.73%  6.52%   7.07%  
-----------------------------------------------------------------------------------------------------
Advisor Class**  Return Before Taxes                                           9.71%  7.56%   8.15%  
-----------------------------------------------------------------------------------------------------
Barclays Capital Global Aggregate Index (U.S. hedged)                                                
(reflects no deduction for fees, expenses, or taxes)                          -1.33%  3.50%   4.33%  
-----------------------------------------------------------------------------------------------------

* After-tax Returns:                                                            

-Are shown for Class A shares only and will vary for Class B and Class C  
shares because these Classes have higher expense ratios;                

-Are an estimate, which is based on the highest historical individual     
federal marginal income tax rates and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual       
investor's tax situation and are likely to differ from those shown; and 

-Are not relevant to investors who hold Fund shares through tax-deferred  
arrangements such as 401(k) plans or individual retirement accounts.    

**Inception date of Advisor Class shares: 11/05/07. Performance information for 
periods prior to the inception of Advisor Class shares is the performance of
the Fund's Class A shares adjusted to reflect the lower expense ratio of    
Advisor Class shares.                                                       

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

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

                                                                [Download Table]

EMPLOYEE             LENGTH OF SERVICE  TITLE                                
-----------------------------------------------------------------------------
                                                                             
Paul J. DeNoon          Since 2002      Senior Vice President of the Adviser 

Scott DiMaggio          Since 2005      Senior Vice President of the Adviser 

Michael L. Mon          Since 2003      Vice President of the Adviser        

Douglas J. Peebles      Since 1992      Senior Vice President of the Adviser 

Matthew S. Sheridan     Since 2007      Vice President of the Adviser        

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 25 in this Prospectus.                                     

                                                                            15

497 17th "Page" of 133 TOC 1st Previous Next Bottom Just 17th

ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND                                        
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate current income consistent with   
preservation of capital.                                                        

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 Funds--Sales Charge Reduction Programs on page 37 of this Prospectus and 
in Purchase of Shares--Sales Charge Reduction Programs on page 108 of the       
Funds' SAI.                                                                     

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                               CLASS B SHARES                            
                                                   CLASS A (NOT CURRENTLY OFFERED CLASS C   ADVISOR CLASS
                                                   SHARES    TO NEW INVESTORS)    SHARES       SHARES    
---------------------------------------------------------------------------------------------------------
                                                                                                         
Maximum Sales Charge (Load) Imposed on Purchases                                                         
(as a percentage of offering price)                 4.25%            None            None       None     
---------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                     
(as a percentage of offering price or redemption                                                         
proceeds, whichever is lower)                       None           4.00%(a)        1.00%(b)     None     
---------------------------------------------------------------------------------------------------------
Exchange Fee                                        None             None            None       None     

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

                                                        [Enlarge/Download Table]

                                                                                    CLASS A CLASS B CLASS C ADVISOR CLASS
-------------------------------------------------------------------------------------------------------------------------
                                                                                                                         
Management Fees                                                                       .50%    .50%    .50%       .50%    
Distribution and/or Service (12b-1) Fees                                              .30%   1.00%   1.00%       None    
Other Expenses:                                                                                                          
  Transfer Agent                                                                      .12%    .17%    .13%       .12%    
  Other Expenses                                                                      .63%    .63%    .63%       .61%    
                                                                                    ------  ------  ------     ------    
Total Other Expenses                                                                  .75%    .80%    .76%       .73%    
                                                                                    ------  ------  ------     ------    
Total Annual Fund Operating Expenses                                                 1.55%   2.30%   2.26%      1.23%    
                                                                                    ======  ======  ======     ======    
  Fee Waiver and/or Expense Reimbursement(c)                                        (.65)%  (.70)%  (.66)%     (.63)%    
                                                                                    ------  ------  ------     ------    
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement    .90%   1.60%   1.60%       .60%    
                                                                                    ======  ======  ======     ======    
-------------------------------------------------------------------------------------------------------------------------

(a)Class B shares automatically convert to Class A shares after eight years.    
The CDSC decreases over time. For Class B shares, the CDSC decreases 1.00%
annually to 0% after the fourth year.                                     

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

(c)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year to year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  513  $  563  $  263     $   61    
After 3 Years   $  833  $  851  $  643     $  339    
After 5 Years   $1,175  $1,167  $1,150     $  637    
After 10 Years  $2,139  $2,393  $2,544     $1,485    
-----------------------------------------------------

16                                                                              

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You would pay the following expenses if you did not redeem your shares at the   
end of period:                                                                  

                                                                [Download Table]

                                    CLASS A CLASS B CLASS C ADVISOR CLASS
-------------------------------------------------------------------------
                                                                         
After 1 Year                        $  513  $  163  $  163     $   61    
After 3 Years                       $  833  $  651  $  643     $  339    
After 5 Years                       $1,175  $1,167  $1,150     $  637    
After 10 Years                      $2,139  $2,393  $2,544     $1,485    
-------------------------------------------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 54% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund employs a dynamic risk allocation, meaning that the Fund's risk        
profile may vary significantly over time based upon market conditions. The Fund 
invests in a portfolio of fixed-income securities of U.S. and non-U.S.          
companies, U.S. and non-U.S. government entities and supranational entities,    
including lower-rated securities. The Fund limits its investments in the        
securities of any one non-U.S. government to 25% of its total assets. The Fund  
may invest in debt securities with a range of maturities from short- to         
long-term.                                                                      

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund typically maintains at least 50% of its net assets in investment grade 
securities. The Fund may invest up to 50% of its net assets in below investment 
grade securities, such as corporate high yield fixed-income securities,         
sovereign debt obligations and fixed-income securities of issuers located in    
emerging markets.                                                               

The Fund may also invest in mortgage-related and other asset-backed securities, 
loan participations, inflation-protected securities, structured securities,     
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund may make short sales of       
securities or currencies or maintain a short position. The Fund may use         
borrowings or other leverage for investment purposes. The Fund intends, among   
other things, to enter into transactions such as reverse repurchase agreements  
and dollar rolls. The Fund may invest, without limit, in derivatives, such as   
options, futures, forwards, or swap agreements.                                 

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

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

                                                                            17

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..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its NAV   
may be more volatile because leverage tends to exaggerate the effect of   
changes in interest rates and any increase or decrease in the value of the
Fund's investments.                                                       

..  PREPAYMENT RISK: The value of mortgage-related or 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.                           

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

The Fund's past performance before and after taxes, of course, does not         
necessarily indicate how it will perform in the future.                         

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

[CHART] 

01     02     03     04     05     06     07      08     09     10      
-----   ----  -----   ----   ----   ----   ----  ------  -----   ----       
-2.81   5.04  15.61   6.13   4.81   4.46   6.38  -16.52  19.20   7.38       

Calendar Year End (%) 

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 8.57% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN  
-9.62% IN THE 4TH QUARTER, 2008.                                                

18                                                                              

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PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                            1 YEAR 5 YEARS 10 YEARS
---------------------------------------------------------------------------------------------------
                                                                                                   
Class A*       Return Before Taxes                                          2.82%   2.61%   4.09%  
               ------------------------------------------------------------------------------------
               Return After Taxes on Distributions                          1.87%   1.31%   2.26%  
               ------------------------------------------------------------------------------------
               Return After Taxes on Distributions and Sale of Fund Shares  1.82%   1.45%   2.36%  
---------------------------------------------------------------------------------------------------
Class B        Return Before Taxes                                          2.63%   2.78%   4.10%  
---------------------------------------------------------------------------------------------------
Class C        Return Before Taxes                                          5.64%   2.77%   3.80%  
---------------------------------------------------------------------------------------------------
Advisor Class  Return Before Taxes                                          7.83%   3.80%   4.85%  
---------------------------------------------------------------------------------------------------
Barclays Capital Global Aggregate Index (U.S. hedged)                                              
(reflects no deduction for fees, expenses, or taxes)                        4.61%   4.85%   5.20%  
---------------------------------------------------------------------------------------------------
BofA Merrill Lynch 3-Month T-Bill Index                                     0.13%   2.43%   2.38%  
---------------------------------------------------------------------------------------------------

* After-tax Returns:                                                            

-Are shown for Class A shares only and will vary for Class B, Class C and 
 Advisor Class shares because these Classes have different expense ratios.

-Are an estimate, which is based on the highest historical individual     
federal marginal income tax rates and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual       
investor's tax situation and are likely to differ from those shown; and 

-Are not relevant to investors who hold Fund shares through tax-deferred  
arrangements such as 401(k) plans or individual retirement accounts.    

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

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

                                                                [Download Table]

EMPLOYEE             LENGTH OF SERVICE  TITLE                                
-----------------------------------------------------------------------------
                                                                             
Paul J. DeNoon          Since 2005      Senior Vice President of the Adviser 

Joran Laird             Since 2009      Vice President of the Adviser        

Douglas J. Peebles      Since 1996      Senior Vice President of the Adviser 

Matthew S. Sheridan     Since 2006      Vice President of the Adviser        

Greg J. Wilensky        Since 2008      Senior Vice President of the Adviser 

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 25 in this Prospectus.                                     

                                                                            19

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ALLIANCEBERNSTEIN HIGH INCOME FUND                                              
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to seek to maximize total returns from price 
appreciation 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 Funds--Sales Charge Reduction Programs on page 37 of this Prospectus and 
in Purchase of Shares--Sales Charge Reduction Programs on page 108 of the       
Funds' SAI.                                                                     

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                    CLASS B SHARES                              
                                                                       CLASS A (NOT CURRENTLY OFFERED TO CLASS C   ADVISOR CLASS
                                                                       SHARES       NEW INVESTORS)       SHARES       SHARES    
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                                
(as a percentage of offering price)                                     4.25%              None             None       None     
--------------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load) (as a percentage of offering                                                               
price or redemption proceeds, whichever is lower)                       None             3.00%(a)         1.00%(b)     None     
--------------------------------------------------------------------------------------------------------------------------------
Exchange Fee                                                            None               None             None       None     

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

                                                        [Enlarge/Download Table]

                                                                                       CLASS A CLASS B CLASS C ADVISOR CLASS
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
Management Fees                                                                          .50%    .50%    .50%       .50%    
Distribution and/or Service (12b-1) Fees                                                 .30%   1.00%   1.00%       None    
Other Expenses:                                                                                                             
  Transfer Agent                                                                         .12%    .16%    .12%       .12%    
  Interest Expenses and Related Expenses                                                 .04%    .05%    .04%       .03%    
  Other Expenses                                                                         .08%    .07%    .07%       .08%    
                                                                                       ------  ------  ------     ------    
Total Other Expenses                                                                     .24%    .28%    .23%       .23%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses                                                    1.04%   1.78%   1.73%       .73%    
                                                                                       ======  ======  ======     ======    
  Fee Waiver and/or Expense Reimbursement(c)                                           (.05)%  (.08)%  (.04)%     (.05)%    
                                                                                       ------  ------  ------     ------    
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(d)    .99%   1.70%   1.69%       .68%    
                                                                                       ======  ======  ======     ======    
----------------------------------------------------------------------------------------------------------------------------

(a)Class B shares automatically convert to Class A shares after six years. The  
CDSC decreases over time. For Class B shares, the CDSC decreases 1.00%    
annually to 0% after the third year.                                      

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

(c)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(d)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS B CLASS C ADVISOR CLASS
-------------------------------------
                                     
 .95%    1.65%   1.65%      .65%     

20                                                                              

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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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  522  $  473  $  272      $ 69     
After 3 Years   $  737  $  653  $  541      $228     
After 5 Years   $  970  $  958  $  935      $401     
After 10 Years  $1,638  $1,715  $2,038      $902     
-----------------------------------------------------

You would pay the following expenses if you did not redeem your shares at the   
end of period:                                                                  

                                                                [Download Table]

                CLASS A CLASS B CLASS C ADVISOR CLASS
-----------------------------------------------------
                                                     
After 1 Year    $  522  $  173  $  172      $ 69     
After 3 Years   $  737  $  553  $  541      $228     
After 5 Years   $  970  $  958  $  935      $401     
After 10 Years  $1,638  $1,715  $2,038      $902     
-----------------------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 26% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund pursues income opportunities from government, corporate, emerging      
market and high yield sources. It has the flexibility to invest in a broad      
range of fixed-income securities in both developed and emerging market          
countries. The Fund's investments may include U.S. and non-U.S. corporate debt  
securities and sovereign debt securities. The Fund may invest, without          
limitation, in either U.S. Dollar-denominated or non-U.S. Dollar-denominated    
fixed-income securities.                                                        

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund may invest in debt securities with a range of maturities from short-   
to long-term. Substantially all of the Fund's assets may be invested in         
lower-rated securities, which may include securities having the lowest rating   
for non-subordinated debt instruments (i.e., rated C by Moody's or CCC+ or      
lower by S&P and Fitch) and unrated securities of equivalent investment         
quality. The Fund also may invest in investment grade securities and unrated    
securities.                                                                     

The Fund may also make short sales of securities or maintain a short position.  
The Fund is non-diversified, meaning it may invest more of its assets in a      
fewer number of issuers.                                                        

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund may use borrowings or other   
leverage for investment purposes. The Fund intends, among other things, to      
enter into transactions such as reverse repurchase agreements and dollar rolls. 
The Fund may invest, without limit, in derivatives, such as options, futures,   
forwards, or swap agreements.                                                   

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

                                                                            21

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..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its NAV   
may be more volatile because leverage tends to exaggerate the effect of   
changes in interest rates and any increase or decrease in the value of the
Fund's investments.                                                       

..  DIVERSIFICATION RISK: The Fund may have more risk because it is             
"non-diversified," meaning that it can invest more of its assets in a     
smaller number of issuers and that adverse changes in the value of one    
security could have a more significant effect on the Fund's NAV.          

..  DERIVATIVES RISK: Investments in 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.           

22                                                                              

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

[CHART] 

01     02     03     04     05     06     07      08     09     10      
----  -----  -----  -----  -----  -----   ----  ------  -----  -----      
6.10  18.70  38.42  11.09  10.16  11.85   7.29  -26.52  61.74  16.80      

Calendar Year End (%) 

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 23.96% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN 
-17.75% IN THE 4TH QUARTER, 2008.                                               

PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                                        1 YEAR 5 YEARS 10 YEARS
---------------------------------------------------------------------------------------------------------------
                                                                                                               
Class A*               Return Before Taxes                                              11.89%  9.78%   13.02% 
                       ----------------------------------------------------------------------------------------
                       Return After Taxes on Distributions                               8.73%  6.43%    9.36% 
                       ----------------------------------------------------------------------------------------
                       Return After Taxes on Distributions and Sale of Fund Shares       7.59%  6.35%    9.03% 
---------------------------------------------------------------------------------------------------------------
Class B                Return Before Taxes                                              12.88%  9.88%   12.98% 
---------------------------------------------------------------------------------------------------------------
Class C                Return Before Taxes                                              14.91%  9.88%   12.61% 
---------------------------------------------------------------------------------------------------------------
Advisor Class**        Return Before Taxes                                              17.18% 11.10%   13.87% 
---------------------------------------------------------------------------------------------------------------
JPMorgan Emerging Markets Bond Index Global ("EMBI Global") (U.S. Dollar-denominated)                          
(reflects no deduction for fees, expenses, or taxes)                                    12.04%  8.36%   10.29% 
---------------------------------------------------------------------------------------------------------------
JPMorgan Government Bond Index-Emerging Markets ("GBI-EM") (local currency-denominated)                        
(reflects no deduction for fees, expenses, or taxes)                                    13.08%  9.82%      N/A 
---------------------------------------------------------------------------------------------------------------
Barclays Capital High Yield Index (2% Constrained) ("BC High Yield")                                           
(reflects no deduction for fees, expenses, or taxes)                                    14.94%  8.91%    9.01% 
---------------------------------------------------------------------------------------------------------------
Composite Benchmark (equal weighted blend of EMBI Global, GBI-EM and BC High Yield)     13.43%  9.19%      N/A 
---------------------------------------------------------------------------------------------------------------

*  After-tax Returns:                                                           

-Are shown for Class A shares only and will vary for Class B and Class C  
shares because these Classes have higher expense ratios;                

-Are an estimate, which is based on the highest historical individual     
federal marginal income tax rates and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual       
investor's tax situation and are likely to differ from those shown; and 

-Are not relevant to investors who hold Fund shares through tax-deferred  
arrangements such as 401(k) plans or individual retirement accounts.    

** Inception date for Advisor Class shares: 1/28/08. Performance information    
for periods prior to the inception of Advisor Class shares is the         
performance of the Fund's Class A shares adjusted to reflect the lower    
expense ratio of Advisor Class shares.                                    

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

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

                                                                [Download Table]

EMPLOYEE               LENGTH OF SERVICE  TITLE                                
-------------------------------------------------------------------------------
                                                                               
Paul J. DeNoon            Since 2002      Senior Vice President of the Adviser 

Gershon M. Distenfeld     Since 2008      Senior Vice President of the Adviser 

Douglas J. Peebles        Since 2002      Senior Vice President of the Adviser 

Marco Santamaria          Since 2010      Vice President of the Adviser        

Matthew S. Sheridan       Since 2005      Vice President of the Adviser        

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 25 in this Prospectus.                                     

24                                                                              

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ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND        
FINANCIAL INTERMEDIARIES                                                        

.   PURCHASE AND SALE OF FUND SHARES                                  

PURCHASE MINIMUMS                                                               

                                                        [Enlarge/Download Table]

                                                                     INITIAL             SUBSEQUENT            
---------------------------------------------------------------------------------------------------------------
                                                                                                               
Class A/Class C Shares, including traditional IRAs and Roth          $2,500                 $50                
IRAs (Class B shares are not currently offered to new shareholders)                                            
---------------------------------------------------------------------------------------------------------------
Automatic Investment Program                                          None                  $50                
                                                                              If initial minimum investment is 
                                                                                less than $2,500, then $200    
                                                                               monthly until account balance   
                                                                                       reaches $2,500          
---------------------------------------------------------------------------------------------------------------
Advisor Class Shares (only available to fee-based programs or         None                  None               
through other limited arrangements)                                                                            
---------------------------------------------------------------------------------------------------------------

You may sell (redeem) your shares each day the New York Stock 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                                                   

Each Fund may make income dividends or 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 a 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.                                                           

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ADDITIONAL INFORMATION ABOUT THE FUNDS' RISKS AND INVESTMENTS                   
--------------------------------------------------------------------------------

This section of the Prospectus provides additional information about the Funds' 
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 a Fund's investment practices and      
additional information about each Fund's risks and investments can be found in  
the Funds' SAIs.                                                                

DERIVATIVES                                                                     
Each Fund may, but is not required to, use derivatives for 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. A Fund may use derivatives to earn   
income and enhance returns, to hedge or adjust the risk profile of its          
portfolio, to replace more traditional direct investments and to obtain         
exposure to otherwise inaccessible markets.                                     

There are four principal types of derivatives, including options, futures,      
forwards and swaps, which are described below. Derivatives may be               
(i) standardized, exchange-traded contracts or (ii) customized, privately       
negotiated contracts. Exchange-traded derivatives tend to be more liquid and    
subject to less credit risk than those that are privately negotiated.           

A 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 Funds' 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 is either settled by physical delivery of 
  the commodity or tangible asset to an agreed-upon location at a future date,
rolled forward into a new forward contract or, in the case of a           
non-deliverable forward, by a cash payment at maturity. The Funds'        
investments in forward contracts may include the following:               

- Forward Currency Exchange Contracts. A Fund may purchase or sell forward    
currency exchange contracts for hedging purposes to minimize the risk from
adverse changes in the relationship between the U.S. Dollar and other     
currencies or for non-hedging purposes as a means of making direct        
investments in foreign currencies as described below under "Other         
  Derivatives and Strategies--Currency Transactions." A Fund, for example, may
enter into a forward contract as a transaction hedge (to "lock in" the    
U.S. Dollar price of a non-U.S. Dollar security), as a position hedge (to 
protect the value of securities the Fund owns that are denominated in a   
foreign currency against substantial changes in the value of the foreign  
currency) or as a cross-hedge (to protect the value of securities the Fund
 owns that are denominated in a foreign currency against substantial changes
in the value of that foreign currency by entering into a forward contract 
for a different foreign currency that is expected to change in the same   
direction as the currency in which the securities are denominated).       

..  FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--A futures contract is an
  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. A Fund may purchase or
sell futures contracts and options thereon to hedge against changes in    
  interest rates, securities (through index futures or options) or currencies.
  A Fund may also purchase or sell futures contracts for foreign currencies or
options thereon for non-hedging purposes as a means of making direct      
investments in foreign currencies, as described below under "Other        
Derivatives and Strategies--Currency Transactions."                       

..  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. A 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 a Fund were permitted to expire without being sold or        
exercised, its premium would represent a loss to the Fund. The Funds'     
investments in options include the following:                             

- Options on Foreign Currencies. A Fund may invest in options on foreign      
currencies that are privately negotiated or traded on U.S. or foreign     
exchanges for hedging purposes to protect against declines in the         
 U.S. Dollar value of foreign currency denominated securities held by a Fund

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 and against increases in the U.S. Dollar cost of securities to be acquired.
 The purchase of an option on a foreign currency may constitute an effective
hedge against fluctuations in exchange rates, although if rates move      
 adversely, a Fund may forfeit the entire amount of the premium plus related
transaction costs. A Fund may also invest in options on foreign currencies
 for non-hedging purposes as a means of making direct investments in foreign
currencies, as described below under "Other Derivatives and               
Strategies--Currency Transactions."                                       

- Options on Securities. A Fund may purchase or write a put or call option on 
 securities. A Fund may write covered options, which means writing an option
for securities the Fund owns, and uncovered options.                      

- 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   
 (interest rates in the case of interest rate swaps, currency exchange rates
  in the case of currency swaps) for a specified amount of an underlying asset
(the "notional" principal amount). Except for currency swaps, the notional
 principal amount is used solely to calculate the payment stream, but is not
exchanged. Swaps are entered into on a net basis (i.e., the two payment   
  streams are netted out, with a Fund receiving or paying, as the case may be,
only the net amount of the two payments). The Funds' investments in swap  
transactions include the following:                                       

- Interest Rate Swaps, Swaptions, Caps and Floors. Interest rate swaps involve
the exchange by a 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 a Fund. The value of these transactions will fluctuate based
on changes in interest rates.                                             

Interest rate swap, swaption, cap and floor transactions may be used to   
preserve a return or spread on a particular investment or a portion of a  
Fund's portfolio or to protect against an increase in the price of        
securities a Fund anticipates purchasing at a later date.                 

- 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 a 
Fund against an unexpected change in the rate of inflation measured by an 
 inflation index since the value of these agreements is expected to increase
if unexpected inflation increases.                                        

- Credit Default Swap Agreements. The "buyer" in a credit default swap        
  contract is obligated to pay the "seller" a periodic stream of payments over
the term of the contract in return for a contingent payment upon the      
occurrence of a credit event with respect to an underlying reference      
obligation. Generally, a credit event means bankruptcy, failure to pay,   
 obligation acceleration or modified restructuring. A Fund may be either the
  buyer or seller in the transaction. If a Fund is a seller, the Fund receives
 a fixed rate of income throughout the term of the contract, which typically
is between one month and five years, provided that no credit event occurs.
If a credit event occurs, a Fund typically must pay the contingent payment
to the buyer, which is typically the "par value" (full notional value) of 
  the reference obligation. The contingent payment may be a cash settlement or
by physical delivery of the reference obligation in return for payment of 
the face amount of the obligation. The value of the reference obligation  
received by a Fund coupled with the periodic payments previously received 
 may be less than the full notional value it pays to the buyer, resulting in
a loss of value to the Fund. If the reference obligation is a defaulted   
security, physical delivery of the security will cause                    

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a Fund to hold a defaulted security. If a 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 a Fund had invested
in the reference obligation directly. Credit default swaps are subject to 
general market risk, liquidity risk and credit risk.                      

- Currency Swaps. A Fund may invest in currency swaps for hedging purposes to 
protect against adverse changes in exchange rates between the U.S. Dollar 
  and other currencies or for non-hedging purposes as a means of making direct
investments in foreign currencies, as described below under "Other        
Derivatives and Strategies--Currency Transactions." Currency swaps involve
the individually negotiated exchange by a Fund with another party of a    
series of payments in specified currencies. Actual principal amounts of   
currencies may be exchanged by the counterparties at the initiation, and  
again upon the termination, of the transaction. Therefore, the entire     
principal value of a currency swap is subject to the risk that the swap   
 counterparty will default on its contractual delivery obligations. If there
is a default by the counterparty to the transaction, the Fund will have   
contractual remedies under the transaction agreements.                    

- Total Return Swaps. A Fund may enter into total return swaps, under which   
one party agrees to pay the other the total return of a defined underlying
asset, such as a security or basket of securities, or non-asset reference,
such as a securities index, during the specified period in return for     
periodic payments based on a fixed or variable interest rate or the total 
return from different underlying assets or references. Total return swaps 
  could result in losses if the underlying asset or reference does not perform
as anticipated.                                                           

..  OTHER DERIVATIVES AND STRATEGIES--                                          

- Eurodollar Instruments. Eurodollar instruments are essentially              
 U.S. Dollar-denominated futures contracts or options that are linked to the
London Interbank Offered Rate (LIBOR). Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of funds and sellers to 
obtain a fixed rate for borrowings.                                       

- Structured Instruments. As part of its investment program and to maintain   
  greater flexibility, a Fund may invest in structured instruments. Structured
instruments, including indexed or structured securities, combine the      
elements of futures contracts or options with those of debt, preferred    
equity or a depositary instrument. Generally, a structured instrument will
be a debt security, preferred stock, depositary share, trust certificate, 
 certificate of deposit or other evidence of indebtedness on which a portion
of or all interest payments, and/or the principal or stated amount payable
  at maturity, redemption or retirement, is determined by reference to prices,
  changes in prices, or differences between prices, of securities, currencies,
intangibles, goods, articles or commodities (collectively "Underlying     
Assets") or by another objective index, economic factor or other measure, 
such as interest rates, currency exchange rates, commodity indices, and   
securities indices (collectively, "Benchmarks"). Thus, structured         
  instruments may take a variety of forms, including, but not limited to, debt
instruments with interest or principal payments or redemption terms       
determined by reference to the value of a currency or commodity or        
securities index at a future point in time, preferred stock with dividend 
rates determined by reference to the value of a currency, or convertible  
securities with the conversion terms related to a particular commodity.   

Structured instruments are potentially more volatile and carry greater    
market risks than traditional debt instruments. Depending on the structure
of the particular structured instrument, changes in a Benchmark may be    
magnified by the terms of the structured instrument and have an even more 
  dramatic and substantial effect upon the value of the structured instrument.
Also, the prices of the structured instrument and the Benchmark or        
Underlying Asset may not move in the same direction or at the same time.  

Structured instruments can have volatile prices and limited liquidity, and
  their use by a Fund may not be successful. The risk of these investments can
be substantial; possibly all of the principal is at risk.                 

- Currency Transactions. A Fund may invest in non-U.S. Dollar-denominated     
  securities on a currency hedged or un-hedged basis. The Adviser may actively
 manage a Fund's currency exposures and may seek investment opportunities by
taking long or short positions in currencies through the use of           
  currency-related derivatives, including forward currency exchange contracts,
futures and options on futures, swaps and options. The Adviser may enter  
into transactions for investment opportunities when it anticipates that a 
foreign currency will appreciate or depreciate in value but securities    
denominated in that currency are not held by a Fund and do not present    
  attractive investment opportunities. Such transactions may also be used when
 the Adviser believes that it may be more efficient than a direct investment
  in a foreign currency-denominated security. A Fund may also conduct currency
exchange contracts on a spot basis (i.e., for cash at the spot rate       
   prevailing in the currency exchange market for buying or selling currencies).

FORWARD COMMITMENTS                                                             
Forward commitments for the purchase or sale of securities may include          
purchases on a when-issued basis or purchases or sales on a delayed delivery    
basis. In some cases, a forward commitment may be conditioned upon the          
occurrence of a subsequent event, such as approval and consummation of a        

28                                                                              

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merger, corporate reorganization or debt restructuring or approval of a         
proposed financing by appropriate authorities (i.e., a "when, as and if issued" 
trade).                                                                         

A Fund may invest significantly in TBA-mortgage-backed securities. A TBA or "To 
Be Announced" trade represents a contract for the purchase or sale of           
mortgage-backed securities to be delivered at a future agreed-upon date;        
however, the specific mortgage pool numbers or the number of pools that will be 
delivered to fulfill the trade obligation or terms of the contract are unknown  
at the time of the trade. Mortgage pools (including fixed rate or variable rate 
mortgages) guaranteed by the Government National Mortgage Association, or GNMA, 
the Federal National Mortgage Association, or FNMA, or the Federal Home Loan    
Mortgage Corporation, or FHLMC, are subsequently allocated to the TBA           
transactions.                                                                   

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 a Fund to protect against anticipated changes in interest     
rates and prices.                                                               

ILLIQUID SECURITIES                                                             
Under current Securities and Exchange Commission ("Commission") guidelines, the 
Funds limit their investments in illiquid securities to 15% of their 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 a Fund has valued the securities. A Fund that invests  
in illiquid securities 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 (the "Securities Act") or certain commercial paper)  
may be treated as liquid, although they may be less liquid than registered      
securities traded on established secondary markets.                             

INFLATION-PROTECTED SECURITIES                                                  
Inflation-protected securities, or IPS, are fixed-income securities whose       
principal value is periodically adjusted according to the rate of inflation. If 
the index measuring inflation falls, the principal value of these securities    
will be adjusted downward, and consequently the interest payable on these       
securities (calculated with respect to a smaller principal amount) will be      
reduced.                                                                        

The value of inflation-protected securities tends to react to changes in real   
interest rates. In general, the price of an inflation-protected security can    
fall when real interest rates rise, and can rise when real interest rates fall. 
In addition, the value of inflation-protected securities can fluctuate based on 
fluctuations in expectations of inflation. Interest payments on                 
inflation-protected securities can be unpredictable and will vary as the        
principal and/or interest is adjusted for inflation.                            

INVESTMENT IN OTHER INVESTMENT COMPANIES                                        
The Funds (except for AllianceBernstein Short Duration Portfolio) may invest in 
other investment companies as permitted by the Investment Company Act of 1940   
(the "1940 Act") or the rules and regulations thereunder. The Funds intend to   
invest uninvested cash balances in an affiliated money market fund as permitted 
by Rule 12d1-1 under the 1940 Act. If a Fund acquires shares in 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. A Fund may also invest in exchange-traded      
funds, subject to the restrictions and limitations of the 1940 Act or any       
applicable rules, exemptive orders or regulatory guidance.                      

LOAN PARTICIPATIONS                                                             
A Fund may invest in corporate loans either by participating as co-lender at    
the time the loan is originated or by buying an interest in the loan in the     
secondary market from a financial institution or institutional investor. The    
financial status of an institution interposed between a Fund and a borrower may 
affect the ability of the Fund to receive principal and interest payments.      

The success of a Fund may depend on the skill with which an agent bank          
administers the terms of the corporate loan agreements, monitors borrower       
compliance with covenants, collects principal, interest and fee payments from   
borrowers and, where necessary, enforces creditor remedies against borrowers.   
Agent banks typically have broad discretion in enforcing loan agreements.       

MORTGAGE-RELATED AND OTHER ASSET-BACKED SECURITIES                              
A 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.     

The value of mortgage-related or 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 a 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     

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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, a  
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 a Fund's yield to      
maturity from these securities.                                                 

A 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 Funds may invest in other asset-backed   
securities that have been offered to investors.                                 

A 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.                                                    

PREFERRED STOCK                                                                 
A 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 issuer. These investments include convertible preferred stock, which        
includes an option for the holder to convert the preferred stock into the       
issuer's common stock under certain conditions, among which may be the          
specification of a future date when the conversion may begin, a certain number  
of common shares per preferred shares, or a certain price per share for the     
common stock. Convertible preferred stock tends to be more volatile than        
non-convertible preferred stock, because its value is related to the price of   
the issuer's common stock as well as the dividends payable on the preferred     
stock.                                                                          

REPURCHASE AGREEMENTS AND BUY/SELL BACK TRANSACTIONS                            
A Fund may enter into repurchase agreements in which a 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 a 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, a   
Fund would suffer a loss to the extent that the proceeds from the sale of the   
security were less than the repurchase price.                                   

A Fund may enter into buy/sell back transactions, which are similar to          
repurchase agreements. In this type of transaction, a 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.                       

REVERSE REPURCHASE AGREEMENTS, DOLLAR ROLLS AND OTHER BORROWINGS                
A Fund may enter into reverse repurchase agreements and dollar rolls, subject   
to the Fund's limitations on borrowings. A reverse repurchase agreement or      
dollar roll involves the sale of a security by a Fund and its agreement to      
repurchase the instrument at a specified time and price, and may be considered  
a form of borrowing for some purposes. Reverse repurchase agreements, dollar    
rolls and other forms of borrowings may create leverage risk for a Fund. In     
addition, reverse repurchase agreements and dollar rolls involve the risk that  
the market value of the securities a Fund is obligated to repurchase may        
decline below the purchase price.                                               

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

Reverse repurchase agreements and dollar rolls involve the risk that the market 
value of the securities a Fund is obligated to repurchase under the agreement   
may decline below the repurchase price. In the event the buyer of securities    
under a reverse repurchase agreement or dollar roll files for bankruptcy or     
becomes insolvent, a Fund's use of the proceeds of the agreement may be         
restricted pending a determination by the other party, or its trustee or        
receiver, whether to enforce the Fund's obligation to repurchase the securities.

RIGHTS AND WARRANTS                                                             
Rights and warrants are option securities permitting their holders to subscribe 
for other securities. Rights are similar to warrants except that they have a    
substantially shorter duration. Rights and warrants do not carry with them      
dividend or voting                                                              

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rights with respect to the underlying securities, or any rights in the assets   
of the issuer. As a result, an investment in rights and warrants may be         
considered more speculative than certain other types of investments. In         
addition, the value of a right or a warrant does not necessarily change with    
the value of the underlying securities, and a right or a warrant ceases to have 
value if it is not exercised prior to its expiration date.                      

SHORT SALES                                                                     
A Fund (except for ALLIANCEBERNSTEIN SHORT DURATION PORTFOLIO) may make short   
sales as a part of overall portfolio management or to offset a potential        
decline in the value of a security. A short sale involves the sale of a         
security that a Fund does not own, or if the Fund owns the security, is not to  
be delivered upon consummation of the sale. When the Fund makes a short sale of 
a security that it does not own, it must borrow from a broker-dealer the        
security sold short and deliver the security to the broker-dealer upon          
conclusion of the short sale.                                                   

If the price of the security sold short increases between the time of the short 
sale and the time a Fund replaces the borrowed security, the Fund will incur a  
loss; conversely, if the price declines, the Fund will realize a gain. The      
potential for the price of a fixed-income security sold short to rise is a      
function of both the remaining maturity of the obligation, its creditworthiness 
and its yield. Unlike short sales of equities or other instruments, potential   
for the price of a fixed-income security to rise may be limited due to the fact 
that the security will be no more than par at maturity. However, the short sale 
of other instruments or securities generally, including fixed-income securities 
convertible into equities or other instruments, a fixed-income security trading 
at a deep discount from par or that pays a coupon that is high in relative      
and/or absolute terms, or that is denominated in a currency other than the      
U.S. Dollar, involves the possibility of a theoretically unlimited loss since   
there is a theoretically unlimited potential for the market price of the        
security sold short to increase.                                                

STANDBY COMMITMENT AGREEMENTS                                                   
Standby commitment agreements are similar to put options that commit a Fund,    
for a stated period of time, to purchase a stated amount of a security that may 
be issued and sold to the Fund at the option of the issuer. The price and       
coupon of the security are fixed at the time of the commitment. At the time of  
entering into the agreement, the Fund is paid a commitment fee, regardless of   
whether the security ultimately is issued. A Fund will enter into such          
agreements only for the purpose of investing in the security underlying the     
commitment at a yield and price considered advantageous to the Fund and         
unavailable on a firm commitment basis.                                         

There is no guarantee that a security subject to a standby commitment will be   
issued. In addition, the value of the security, if issued, on the delivery date 
may be more or less than its purchase price. Since the issuance of the security 
is at the option of the issuer, a Fund will bear the risk of capital loss in    
the event the value of the security declines and may not benefit from an        
appreciation in the value of the security during the commitment period if the   
issuer decides not to issue and sell the security to the Fund.                  

STRUCTURED SECURITIES AND BASKET SECURITIES                                     
A Fund may 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. A       
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 a 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.

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

By investing in sovereign debt obligations, the Funds will be exposed to the    
direct or indirect consequences of political, social, and economic changes in   
various countries. Political changes in a country may affect the willingness of 
a foreign government to make or provide for timely payments of its              

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obligations. The country's economic status, as reflected in, among other        
things, its inflation rate, the amount of its external debt and its gross       
domestic product, will also affect the government's ability to honor its        
obligations.                                                                    

The Funds are permitted to invest in sovereign debt obligations that are not    
current in the payment of interest or principal or are in default so long as    
the Adviser believes it to be consistent with the Funds' investment objectives. 
The Funds may have limited legal recourse in the event of a default with        
respect to certain sovereign debt obligations they hold. For example, remedies  
from defaults on certain sovereign debt obligations, unlike those on private    
debt, must, in some cases, be pursued in the courts of the defaulting party     
itself. Legal recourse therefore may be significantly diminished. Bankruptcy,   
moratorium, and other similar laws applicable to issuers of sovereign debt      
obligations may be substantially different from those applicable to issuers of  
private debt obligations. The political context, expressed as the willingness   
of an issuer of sovereign debt obligations to meet the terms of the debt        
obligation, for example, is of considerable importance. In addition, no         
assurance can be given that the holders of commercial bank debt will not        
contest payments to the holders of securities issued by foreign governments in  
the event of default under commercial bank loan agreements.                     

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.                                           

A Fund may also invest in inverse floating rate debt 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 AND PRINCIPAL-ONLY SECURITIES                                       
Zero coupon securities and principal-only (PO) 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.                                                             

ADDITIONAL RISK AND OTHER CONSIDERATIONS                                        
Investments in the Funds involve the special risk considerations described      
below. Certain of these risks may be heightened when investing in emerging      
markets.                                                                        

BORROWING AND LEVERAGE                                                          
The Funds may use borrowings for investment purposes subject to applicable      
statutory or regulatory requirements. Borrowings by a Fund result in leveraging 
of the Fund's shares. A Fund may also use leverage for investment transactions  
by entering into transactions such as reverse repurchase agreements, forward    
contracts and dollar rolls. This means that a Fund uses cash made available     
during the term of these transactions to make investments in other fixed-income 
securities.                                                                     

Utilization of leverage, which is usually considered speculative, involves      
certain risks to a Fund's shareholders. These include a higher volatility of    
the NAV of a Fund's shares and the relatively greater effect on the NAV of the  
shares. So long as a Fund is able to realize a net return on its investment     
portfolio that is higher than the interest expense paid on borrowings or the    
carrying costs of leveraged transactions, the effect of leverage will be to     
cause the Fund's shareholders to realize a higher current net investment income 
than if the Fund were not leveraged. If the interest expense on borrowings or   
the carrying costs of leveraged transactions approaches the net return on a     
Fund's investment portfolio, the benefit of leverage to the Fund's shareholders 
will be reduced. If the interest expense on borrowings or the carrying costs of 
leveraged transactions were to exceed the net return to shareholders, a Fund's  
use of leverage would result in a lower rate of return. Similarly, the effect   
of leverage in a declining market could be a greater decrease in NAV. In an     
extreme case, if a Fund's current investment income were not sufficient to meet 
the interest expense on borrowings or the carrying costs of leveraged           
transactions, it could be necessary for the Fund to liquidate certain of its    
investments, thereby reducing its NAV.                                          

FOREIGN (NON-U.S.) SECURITIES                                                   
Investing in foreign securities involves special risks and considerations not   
typically associated with investing in U.S. securities. The securities markets  
of many foreign countries are relatively small, with the majority of market     
capitalization and trading volume concentrated in a limited number of companies 
representing a small number of industries. A Fund that invests in foreign       
fixed-income securities may experience greater price volatility and             
significantly lower liquidity than a portfolio invested solely in securities of 
U.S. companies. These markets may be subject to greater influence by adverse    
events generally affecting the market, and by large investors trading           
significant blocks of securities, than is usual in the United States.           

Securities registration, custody, and settlement may in some instances be       
subject to delays and legal and administrative uncertainties. Foreign           
investment in the securities markets of certain foreign countries is restricted 
or controlled to varying                                                        

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degrees. These restrictions or controls may at times limit or preclude          
investment in certain securities and may increase the cost and expenses of a    
Fund. In addition, the repatriation of investment income, capital or the        
proceeds of sales of securities from certain of the countries is controlled     
under regulations, including in some cases the need for certain advance         
government notification or authority, and if a deterioration occurs in a        
country's balance of payments, the country could impose temporary restrictions  
on foreign capital remittances.                                                 

A Fund also could be adversely affected by delays in, or a refusal to grant,    
any required governmental approval for repatriation, as well as by the          
application to it of other restrictions on investment. Investing in local       
markets may require a Fund to adopt special procedures or seek local            
governmental approvals or other actions, any of which may involve additional    
costs to a Fund. These factors may affect the liquidity of a Fund's investments 
in any country and the Adviser will monitor the effect of any such factor or    
factors on a Fund's investments. Transaction costs, including brokerage         
commissions for transactions both on and off the securities exchanges, in many  
foreign countries are generally higher than in the United States.               

Issuers of securities in foreign jurisdictions are generally not subject to the 
same degree of regulation as are U.S. issuers with respect to such matters as   
insider trading rules, restrictions on market manipulation, shareholder proxy   
requirements, and timely disclosure of information. The reporting, accounting,  
and auditing standards of foreign countries may differ, in some cases           
significantly, from U.S. standards in important respects, and less information  
may be available to investors in foreign securities than to investors in U.S.   
securities. Substantially less information is publicly available about certain  
non-U.S. issuers than is available about most U.S. issuers.                     

The economies of individual foreign countries may differ favorably or           
unfavorably from the U.S. economy in such respects as growth of gross domestic  
product or gross national product, rate of inflation, capital reinvestment,     
resource self-sufficiency, and balance of payments position. Nationalization,   
expropriation or confiscatory taxation, currency blockage, political changes,   
government regulation, political or social instability, revolutions, wars or    
diplomatic developments could affect adversely the economy of a foreign         
country. In the event of nationalization, expropriation, or other confiscation, 
a Fund could lose its entire investment in securities in the country involved.  
In addition, laws in foreign countries governing business organizations,        
bankruptcy and insolvency may provide less protection to security holders such  
as the Fund than that provided by U.S. laws.                                    

Investments in securities of companies in emerging markets involve special      
risks. There are approximately 100 countries identified by the World Bank as    
Low Income, Lower Middle Income and Upper Middle Income countries that are      
generally regarded as Emerging Markets. Emerging market countries that the      
Adviser currently considers for investment are listed below. Countries may be   
added to or removed from this list at any time.                                 

                                                                [Download Table]
                                                  
Algeria             Hong Kong    Poland           
Argentina           Hungary      Qatar            
Belize              India        Romania          
Brazil              Indonesia    Russia           
Bulgaria            Israel       Singapore        
Chile               Jamaica      Slovakia         
China               Jordan       Slovenia         
Colombia            Kazakhstan   South Africa     
Costa Rica          Lebanon      South Korea      
Cote D'Ivoire       Malaysia     Taiwan           
Croatia             Mexico       Thailand         
Czech Republic      Morocco      Trinidad & Tobago
Dominican Republic  Nigeria      Tunisia          
Ecuador             Pakistan     Turkey           
Egypt               Panama       Ukraine          
El Salvador         Peru         Uruguay          
Guatemala           Philippines  Venezuela        

Investing in emerging market securities imposes risks different from, or        
greater than, risks of investing in domestic securities or in foreign,          
developed countries. These risks include: smaller market capitalization of      
securities markets, which may suffer periods of relative illiquidity;           
significant price volatility; restrictions on foreign investment; and possible  
repatriation of investment income and capital. In addition, foreign investors   
may be required to register the proceeds of sales; future economic or political 
crises could lead to price controls, forced mergers, expropriation or           
confiscatory taxation, seizure, nationalization, or creation of government      
monopolies. The currencies of emerging market countries may experience          
significant declines against the U.S. Dollar, and devaluation may occur         
subsequent to investments in these currencies by a Fund. Inflation and rapid    
fluctuations in inflation rates have had, and may continue to have, negative    
effects on the economies and securities markets of certain emerging market      
countries.                                                                      

Additional risks of emerging market securities may include: greater social,     
economic and political uncertainty and instability; more substantial            
governmental involvement in the economy; less governmental supervision and      
regulation; unavailability of currency hedging techniques; companies that are   
newly organized and small; differences in auditing and financial reporting      
standards, which may result in unavailability of material information about     
issuers; and less developed legal systems. In addition, emerging securities     
markets may have different clearance and settlement procedures, which may be    
unable to keep pace with the volume of securities transactions or otherwise     
make it difficult to engage in such transactions. Settlement problems may cause 
a Fund to miss attractive investment opportunities, hold a portion of its       
assets in cash pending investment, or be delayed in disposing of a portfolio    
security. Such a delay could result in possible liability to a purchaser of the 
security.                                                                       

FOREIGN (NON-U.S.) CURRENCIES                                                   
A Fund that invests some portion of its assets in securities denominated in,    
and receives revenues in, foreign currencies will be adversely affected by      
reductions in the value of those                                                

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currencies relative to the U.S. Dollar. Foreign currency exchange rates may     
fluctuate significantly. They are determined by supply and demand in the        
foreign exchange markets, the relative merits of investments in different       
countries, actual or perceived changes in interest rates, and other complex     
factors. Currency exchange rates also can be affected unpredictably by          
intervention (or the failure to intervene) by U.S. or foreign governments or    
central banks or by currency controls or political developments. In light of    
these risks, a Fund may engage in certain currency hedging transactions, as     
described above, which involve certain special risks.                           

A Fund may also invest directly in foreign currencies for non-hedging purposes  
directly on a spot basis (i.e., cash) or through derivative transactions, such  
as forward currency exchange contracts, futures and options thereon, swaps and  
options as described above. These investments will be subject to the same       
risks. In addition, currency exchange rates may fluctuate significantly over    
short periods of time, causing a Fund's NAV to fluctuate.                       

INVESTMENT IN BELOW INVESTMENT GRADE FIXED-INCOME SECURITIES                    
Investments in securities rated below investment grade (commonly known as "junk 
bonds") 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, a Fund may experience difficulty in valuing such   
securities and, in turn, the Fund's assets.                                     

UNRATED SECURITIES                                                              
A Fund may invest in unrated securities when the Adviser believes that the      
financial condition of the issuers of such securities, or the protection        
afforded by the terms of the securities themselves, limits the risk to the Fund 
to a degree comparable to that of rated securities that are consistent with the 
Fund's objective and policies.                                                  

FUTURE DEVELOPMENTS                                                             
A 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                                   
A 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. 
Unless otherwise noted, all other investment policies of a Fund may be changed  
without shareholder approval.                                                   

TEMPORARY DEFENSIVE POSITION                                                    
For temporary defensive purposes in an attempt to respond to adverse market,    
economic, political or other conditions, each Fund may invest in certain types  
of short-term, liquid, investment grade or high quality (depending on the Fund) 
debt securities. While a Fund is investing for temporary defensive purposes, it 
may not meet its investment objectives.                                         

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

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INVESTING IN THE FUNDS                                                          
--------------------------------------------------------------------------------

This section discusses how to buy, sell or redeem, or exchange different        
classes of shares of a Fund that are offered in this Prospectus.                
ALLIANCEBERNSTEIN INTERMEDIATE BOND, ALLIANCEBERNSTEIN DIVERSIFIED YIELD,       
ALLIANCEBERNSTEIN GLOBAL BOND and ALLIANCEBERNSTEIN HIGH INCOME offer four      
classes of shares and ALLIANCEBERNSTEIN SHORT DURATION offers three classes of  
shares through this Prospectus. Retirement shares of ALLIANCEBERNSTEIN          
INTERMEDIATE BOND, ALLIANCEBERNSTEIN DIVERSIFIED YIELD, ALLIANCEBERNSTEIN       
GLOBAL BOND and ALLIANCEBERNSTEIN HIGH INCOME are available through a separate  
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 "The 'Pros' and       
'Cons' of Different Share Classes" below. ONLY CLASS A SHARES OFFER QUANTITY    
DISCOUNTS ON SALES CHARGES, as described under "Sales Charge Reduction          
Programs" below.                                                                

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

CLASS A, CLASS B AND CLASS C SHARES                                             
EFFECTIVE JANUARY 31, 2009, SALES OF CLASS B SHARES OF THE FUNDS TO NEW         
INVESTORS WERE SUSPENDED. CLASS B SHARES MAY ONLY BE PURCHASED (I) BY EXISTING  
CLASS B SHAREHOLDERS AS OF JANUARY 31, 2009, (II) THROUGH EXCHANGE OF CLASS B   
SHARES FROM ANOTHER ALLIANCEBERNSTEIN MUTUAL FUND, OR (III) AS OTHERWISE        
DESCRIBED BELOW.                                                                

You may purchase a Fund's Class A, Class B, or Class C shares through financial 
intermediaries, such as broker-dealers or banks. You also may purchase shares   
directly from the Funds' principal underwriter, AllianceBernstein Investments,  
Inc., or ABI.                                                                   

PURCHASE MINIMUMS AND MAXIMUMS                                                  

MINIMUMS:*                                                                      

                                                                [Download Table]
                     
--Initial:     $2,500
--Subsequent:  $   50

*These 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 "Automatic Investment      
Program" and "Retirement Plans, Tax-Deferred Accounts and Employee Benefit    
Plans" 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:                                             

                                                                [Download Table]
                            
--Class A shares        None
--Class B shares  $  100,000
--Class C shares  $1,000,000

Your broker or financial advisor must receive your purchase request by 4:00     
p.m., Eastern time, 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 4:00 p.m., Eastern 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 has at least $10,000,000 in assets and 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 Funds.                        

The Funds' SAIs have more detailed information about who may purchase and hold  
Advisor Class shares.                                                           

RETIREMENT PLANS, TAX-DEFERRED ACCOUNTS AND EMPLOYEE BENEFIT PLANS              
Special eligibility rules apply to these types of investments. Except as        
indicated, there are no investment minimums for the plans listed below. Class A 
shares are available to:                                                        

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

..  SEPs, SAR-SEPs, SIMPLE IRAs, and individual 403(b) plans;                   

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

..  AllianceBernstein Link, AllianceBernstein Individual 401(k), and            
AllianceBernstein SIMPLE IRA plans; and                                   

..  certain defined contribution retirement plans that do not have plan level or
omnibus accounts on the books of the Fund.                                

Group retirement plans that selected Class B shares as an investment            
alternative under their plans before September 2, 2003 may continue to purchase 
Class B shares.                                                                 

Class C shares are available to AllianceBernstein Link, AllianceBernstein       
Individual 401(k), and AllianceBernstein SIMPLE IRA plans with less than        
$250,000 in plan assets and                                                     

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

REQUIRED INFORMATION                                                            
A 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). A 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 a 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.                                                             

A 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. Each 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 (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 a 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
amount of each share class's Rule 12b-1 fee, if any, is disclosed below and 
in a Fund's fee table included in Summary Information section above.        

ASSET-BASED SALES CHARGES OR DISTRIBUTION AND/OR SERVICE (RULE 12B-1) FEES      
Each 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:                                       

                                                                [Download Table]

               DISTRIBUTION AND/OR SERVICE
                 (RULE 12B-1) FEE (AS A   
                 PERCENTAGE OF AGGREGATE  
                AVERAGE DAILY NET ASSETS) 
------------------------------------------
                                          
Class A                    .30%           
Class B                   1.00%           
Class C                   1.00%           
Advisor Class             None            

Because these fees are paid out of a 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 B and Class C shares are subject   
to higher Rule 12b-1 fees than Class A shares. Class B shares are subject to    
these higher fees for a period of six years, after which they convert to        
Class A shares (except for ALLIANCEBERNSTEIN DIVERSIFIED YIELD Class B shares,  
which convert to Class A shares after eight years). Because higher fees mean a  
higher expense ratio, Class B and Class C shares pay correspondingly lower      
dividends and may have a lower NAV (and returns) than Class A shares. All or    
some of these fees may be paid to financial intermediaries, including your      
financial advisor's firm.                                                       

CLASS A SHARES - INITIAL SALES CHARGE ALTERNATIVE                               
You can purchase Class A shares at their public offering price (or cost), which 
is NAV plus an initial sales charge of up to 4.25% 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 $1,000,000 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.                                         

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CLASS B SHARES - DEFERRED SALES CHARGE ALTERNATIVE                              
EFFECTIVE JANUARY 31, 2009, SALES OF CLASS B SHARES OF THE FUNDS TO NEW         
INVESTORS WERE SUSPENDED. CLASS B SHARES MAY ONLY BE PURCHASED (I) BY EXISTING  
CLASS B SHAREHOLDERS AS OF JANUARY 31, 2009, (II) THROUGH EXCHANGE OF CLASS B   
SHARES FROM ANOTHER ALLIANCEBERNSTEIN MUTUAL FUND, OR (III) AS OTHERWISE        
DESCRIBED BELOW.                                                                

You can purchase Class B 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 CDSC if you redeem shares within three years (four   
years in the case of ALLIANCEBERNSTEIN DIVERSIFIED YIELD) of purchase. The CDSC 
varies depending on the number of years you hold the shares. The CDSC amounts   
for Class B shares are:                                                         

ALLIANCEBERNSTEIN DIVERSIFIED YIELD:                                            

                                                                [Download Table]

YEAR SINCE PURCHASE   CDSC 
---------------------------
                           
First                  4.0%
Second                 3.0%
Third                  2.0%
Fourth                 1.0%
Fifth and thereafter  None 

ALL OTHER FUNDS:                                                                

                                                                [Download Table]

YEAR SINCE PURCHASE    CDSC 
----------------------------
                            
First                   3.0%
Second                  2.0%
Third                   1.0%
Fourth and thereafter  None 

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

Class B shares purchased for cash automatically convert to Class A shares six   
years after the end of the month of your purchase (except for Class B shares of 
ALLIANCEBERNSTEIN DIVERSIFIED YIELD, which automatically convert to Class A     
shares eight years after the end of the month of your purchase). If you         
purchase shares by exchange for the Class B shares of another AllianceBernstein 
Mutual Fund, the conversion period runs from the date of your original purchase.

CLASS C SHARES - ASSET-BASED SALES CHARGE ALTERNATIVE                           
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 1 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 - FEE-BASED PROGRAM ALTERNATIVE                            
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                                                 
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 A FUND OR YOUR FINANCIAL INTERMEDIARY IN     
ORDER TO BE ELIGIBLE FOR SALES CHARGE REDUCTION PROGRAMS.                       

Information about 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 -US" then "Investment Insights--Investor Education" then "Sales       
Charge Reduction Programs"). More information on BREAKPOINTS and other sales    
charge waivers is available in the Funds' SAI.                                  

You Can Reduce Sales Charges  
When Buying Class A Shares. 

BREAKPOINTS OR QUANTITY DISCOUNTS OFFERED BY THE FUNDS                          
The Funds offer investors the benefit of discounts on the sales charges that    
apply to purchases of Class A shares in certain circumstances. These discounts, 
which are also known as BREAKPOINTS, can reduce or, in some cases, eliminate    
the initial sales charges that would otherwise apply to your Class A            
investment. Mutual funds are not required to offer breakpoints and different    
mutual fund groups may offer different types of breakpoints.                    

BREAKPOINTS or QUANTITY DISCOUNTS allow larger investments in Class A shares to 
be charged lower sales charges. A shareholder investing more than $100,000 in   
Class A shares of a Fund is eligible for a reduced sales charge. Initial sales  
charges are eliminated completely for purchases of $1,000,000 or more, although 
a 1%, 1-year CDSC may apply.                                                    

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

                                                                [Download Table]

                           INITIAL SALES CHARGE
                           ------------------  
                            AS % OF    AS % OF 
                           NET AMOUNT  OFFERING
AMOUNT PURCHASED            INVESTED    PRICE  
-----------------------------------------------
                                               
Up to $100,000                4.44%      4.25% 
$100,000 up to $250,000       3.36       3.25  
$250,000 up to $500,000       2.30       2.25  
$500,000 up to $1,000,000     1.78       1.75  
$1,000,000 and above          0.00       0.00  

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 a Fund   
with the value 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 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 a Fund into a single "purchase." A "purchase" means a single purchase 
or concurrent purchases of shares of a 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 Funds offer a LETTER OF INTENT, which permits the investor 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 total amount stated in 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 charges otherwise         
applicable by redeeming shares in the investor's account at their then current  
NAV. Investors qualifying for a Combined Purchase Privilege 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 a 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 Funds or a financial intermediary; 

..  any account of the shareholder at another financial intermediary; and       

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

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.                                     

CLASS A SHARES - PURCHASES NOT SUBJECT TO SALES CHARGES                         
The Funds may sell their 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;                        

..  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 a Fund's shares, and     
employees of the Adviser.                                                 

Please see the Funds' SAIs for more information about purchases of Class A      
shares without sales charges.                                                   

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CDSC WAIVERS AND OTHER PROGRAMS                                                 

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

CDSC WAIVERS                                                                    
The Funds 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.                                                  

DIVIDEND REINVESTMENT PROGRAM                                                   
Shareholders may elect to have all income and capital gains distributions from  
their account paid to them in the form of additional shares of the same class   
of a Fund under the Fund's Dividend Reinvestment Program. There is no initial   
sales charge or CDSC imposed on shares issued pursuant to the Dividend          
Reinvestment Program.                                                           

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 a 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. Shareholders    
who committed to monthly investments of $25 or more through the Automatic       
Investment Program by October 15, 2004 will be able to continue their program   
despite the $50 monthly minimum discussed above. As of January 31, 2009, the    
Automatic Investment Program is available for purchase of Class B shares only   
if a shareholder was enrolled in the Program prior to January 31, 2009. Please  
see the Funds' SAIs for more details.                                           

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 Funds offer a systematic withdrawal plan that permits the redemption of     
Class A, Class B 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 a Fund account would be free of a CDSC. Shares would be redeemed so    
that Class B shares not subject to a CDSC (such as shares acquired with         
reinvested dividends or distributions) would be redeemed first and Class B      
shares that are held the longest would be redeemed next. For Class A and Class  
C shares, shares held the longest would be redeemed first.                      

THE "PROS" AND "CONS" OF DIFFERENT SHARE CLASSES                                
The decision as to which class of shares is most beneficial to you depends on   
the amount you intend to invest, how long you expect to own shares, and         
expenses associated with owning a particular class of shares. If you are making 
a large investment that qualifies for a reduced sales charge, you might         
consider purchasing Class A shares. Class A shares, with their lower Rule 12b-1 
fees, are designed for investors with a long-term investing time frame.         

Although investors in Class B shares do not pay an initial sales charge, Class  
B shares may be more costly than Class A shares before they convert to Class A  
shares due to their substantially higher Rule 12b-1 fees. Class B shares        
redeemed within three years (four years for ALLIANCEBERNSTEIN DIVERSIFIED       
YIELD) of purchase are also subject to a CDSC. Class B shares are designed for  
investors with an intermediate-term investing time frame.                       

Class C shares should not be considered as a long-term investment because they  
do not convert to Class A shares and 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.                  

Your financial intermediary may receive differing compensation for selling      
Class A, Class B, or Class C shares. See "Payments to Financial Advisors and    
their Firms" below.                                                             

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 B, 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 Funds, including requirements as to the minimum initial and subsequent      
investment amounts.                                                             

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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 Funds. These financial   
intermediaries employ financial advisors and receive compensation for selling   
shares of the Funds. This compensation is paid from various sources, including  
any sales charge, CDSC, and/or Rule 12b-1 fee that you or the Funds 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 Funds offered in this Prospectus and/or provides services to  
the Funds' 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 B shares in an amount equal to 4% of your          
investment for sales of Class B shares and an amount equal to 1% of your        
investment for sales of Class C shares.                                         

For Class A and Class C shares, up to 100% and, for Class B shares, up to 30%   
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 Funds, 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 2011, ABI's additional payments to these firms for distribution services    
and educational support related to the AllianceBernstein Mutual Funds are       
expected to be approximately 0.04% of the average monthly assets of the         
AllianceBernstein Mutual Funds, or approximately $18.0 million. In 2010, ABI    
paid approximately 0.04% of the average monthly assets of the AllianceBernstein 
Mutual Funds or approximately $16.5 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 Funds 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 Funds--Transfer Agency and           
Retirement Plan Services" below. These expenses paid by the Funds are included  
in "Other Expenses" under "Fees and Expenses of the Fund--Annual Fund Operating 
Expenses" in the Summary Information at the beginning of the Prospectus.        

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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 FUNDS, 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 the 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                                                                
Bank of America                                                             
Cadaret, Grant & Co.                                                        
CCO Investment Services Corp.                                               
Chase Investment Services                                                   
Commonwealth Financial Network                                              
Donegal Securities                                                          
Financial Network Investment Company                                        
LPL Financial Corporation                                                   
Merrill Lynch                                                               
Morgan Stanley Smith Barney                                                 
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                                                        
Wells Fargo Investments                                                     

Although the Funds may use brokers and dealers that sell shares of the Funds to 
effect portfolio transactions, the Funds do 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. Your exchange of shares is priced at the next-determined NAV    
after your order is received in proper form. 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 4:00 p.m., Eastern time, on that     
day. The Funds 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 a Fund) on any day the  
New York Stock Exchange, or 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 4:00 p.m.,  
Eastern time, and submit it to the Fund by a pre-arranged time for you to       
receive the next-determined 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.                             

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.   

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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 4:00 p.m.,  
Eastern 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.                            

..  Redemption requests by electronic funds transfer or check 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                               
Each 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 Funds will be able 
to detect excessive or short-term trading and 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. Each 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      
Funds 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 a 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 a Fund to sell shares at       
inopportune times to accommodate redemptions relating to short-term trading. In 
particular, a 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, a 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.                                                          

Funds that may invest significantly in foreign securities may be particularly   
susceptible to short-term trading strategies. This is because foreign           
securities are typically traded on markets that close well before the time a    
Fund 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 foreign securities established some time before the Fund      
calculates its own share price (referred to as "time zone arbitrage"). The      
Funds have procedures, referred to as fair value pricing, designed to adjust    
closing market prices of foreign securities to reflect what is believed to be   
the fair value of those securities at the time a Fund calculates its NAV. While 
there is no assurance, the Funds expect 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 a Fund  
that does not invest primarily in foreign securities. 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"). All Funds may be adversely      
affected by price arbitrage.                                                    

POLICY REGARDING SHORT-TERM TRADING. Purchases and exchanges of shares of the   
Funds should be made for investment purposes only. The Funds will seek to       
prevent patterns of excessive purchases and sales of Fund shares to the extent  
they are detected by the procedures described below. The Funds reserve 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 Funds, through their 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 90-day period
or purchases of shares followed by a sale within 90 days will be          

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  identified by these surveillance procedures. For purposes of these transaction
surveillance procedures, the Funds may consider trading activity in multiple
accounts under common ownership, control, or influence. Trading activity    
identified by either, or a combination, of these factors, or as a result of 
any other information available at the time, will be evaluated to determine 
 whether such activity might constitute excessive or short-term trading. These
surveillance procedures may be modified from time to time, as necessary or  
 appropriate to improve the detection of excessive or short-term trading or to
address specific circumstances.                                             

..  ACCOUNT BLOCKING PROCEDURES. If the Funds determine, in their sole          
discretion, that a particular transaction or pattern of transactions      
identified by the transaction surveillance procedures described above is  
  excessive or short-term trading in nature, the relevant Fund account(s) will
  be immediately "blocked" and no future purchase or exchange activity will be
 permitted. However, sales of Fund shares back to a 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. In the event an account is blocked,
certain account-related privileges, such as the ability to place purchase,
sale and exchange orders over the internet or by phone, may also be       
 suspended. A blocked account will generally remain blocked unless and until
the account holder or the associated 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 Funds, particularly among certain brokers, dealers and other financial
intermediaries, including sponsors of retirement plans and variable       
insurance products. The Funds apply their surveillance procedures to these
omnibus account arrangements. As required by Commission rules, the Funds  
  have entered into agreements with all of their financial intermediaries that
 require the financial intermediaries to provide the Funds, upon the request
of the Funds or their agents, with individual account level information   
about their transactions. If the Funds detect excessive trading through   
their monitoring of omnibus accounts, including trading at the individual 
account level, the financial intermediaries will also execute instructions
from the Funds 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 Funds 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 FUNDS VALUE THEIR SHARES                                                
Each Fund's NAV is calculated at the close of regular trading on the Exchange   
(ordinarily, 4:00 p.m., Eastern time), only on days when the Exchange is open   
for business. To calculate NAV, a Fund's assets are valued and totaled,         
liabilities are subtracted, and the balance, called net assets, is divided by   
the number of shares outstanding. If a 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 Funds value their 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 each Fund's      
Board. When a Fund uses fair value pricing, it may take into account any        
factors it deems appropriate. A Fund may determine fair value based upon        
developments related to a specific security, current valuations of foreign      
stock indices (as reflected in U.S. futures markets) and/or U.S. sector or      
broader stock market indices. The prices of securities used by the 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.                    

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

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

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MANAGEMENT OF THE FUNDS                                                         
--------------------------------------------------------------------------------

INVESTMENT ADVISER                                                              
Each Fund's adviser is AllianceBernstein L.P., 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, 2010, totaling      
approximately $484 billion (of which more than $81 billion represented assets   
of investment companies). As of September 30, 2010, the Adviser managed         
retirement assets for many of the largest public and private employee benefit   
plans (including 33 of the nation's FORTUNE 100 companies), for public employee 
retirement funds in 38 states, for investment companies, and for foundations,   
endowments, banks and insurance companies worldwide. Currently, the 35          
registered investment companies managed by the Adviser, comprising 115 separate 
investment portfolios, have approximately 3.2 million accounts.                 

The Adviser provides investment advisory services and order placement           
facilities for each of the Funds. For these advisory services, each Fund paid   
the Adviser during its most recent fiscal year a management fee as a percentage 
of average daily net assets as follows:                                         

                                                                [Download Table]

                                     FEE AS A PERCENTAGE OF            
                                       AVERAGE DAILY NET    FISCAL YEAR
FUND                                         ASSETS            ENDED   
-----------------------------------------------------------------------
                                                                       
AllianceBernstein Short Duration              .45%            9/30/10  
AllianceBernstein Intermediate Bond           .25%*          10/31/10  
AllianceBernstein Global Bond                 .45%*           9/30/10  
AllianceBernstein Diversified Yield           .00%*          10/31/10  
AllianceBernstein High Income                 .45%*          10/31/10  

*Fee stated net of any waivers and/or reimbursements. See "Fees and Expenses of 
the Fund" in the Summary Information at the beginning of the Prospectus for   
more information about fee waivers.                                           

A discussion regarding the basis for the Board's approval of each Fund's        
investment advisory agreement is available in the Fund's semi-annual report to  
shareholders. 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 Funds. Certain other clients of the Adviser may have  
investment objectives and policies similar to those of a 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 a 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 a Fund. When two or more of the clients of the Adviser (including a   
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 management of, and investment decisions for, the Funds' portfolios are made 
by certain Investment Policy Teams. Each Investment Policy Team relies heavily  
on the fundamental analysis and research of the Adviser's large internal        
research staff. No one person is principally responsible for coordinating each  
Fund's investments.                                                             

The following table lists the Investment Policy Teams, the person within each   
Investment Policy Team with the most significant responsibility for day-to-day  
management of each 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:                                

                                                        [Enlarge/Download Table]

                                                                     PRINCIPAL OCCUPATION(S)                  
FUND AND RESPONSIBLE TEAM  EMPLOYEE; YEAR; TITLE                  DURING THE PAST FIVE (5) YEARS              
--------------------------------------------------------------------------------------------------------------
                                                                                                              
AllianceBernstein Short   Jon P. Denfeld; since     Vice President of the Adviser, with which he has been     
Duration Portfolio        2008; Vice President of   associated in a substantially similar capacity to his     
U.S. Investment Grade:    the Adviser               current position since May 2008. Prior thereto, he was    
Liquid Markets/Structured                           a Senior U.S. Portfolio Manager for UBS Global Asset      
Products Investment Team                            Management from 2006 to 2007. Prior thereto, he           
                                                    served as a Portfolio Manager for Shay Asset              
                                                    Management since prior to 2006.                           

                          Shawn E. Keegan; since    Vice President of the Adviser, with which he has been     
                          2005; Vice President of   associated in a substantially similar capacity to his     
                          the Adviser               current position since prior to 2006.                     

                          Alison M. Martier; since  Senior Vice President of the Adviser, with which she      
                          2009; Senior Vice         has been associated in a substantially similar capacity   
                          President of the Adviser  to her current position since prior to 2006.              
                          and Director of the                                                                 
                          Fixed Income Senior                                                                 
                          Portfolio Management Team                                                           

                          Douglas J. Peebles;       Senior Vice President of the Adviser, with which he has   
                          since 2009; Senior Vice   been associated in a substantially similar capacity to his
                          President of the          current position since prior to 2006.                     
                          Adviser, and Chief                                                                  
                          Investment Officer and                                                              
                          Head of Fixed Income                                                                

                          Greg J. Wilensky; since   Senior Vice President of the Adviser, with which he has   
                          2009; Senior Vice         been associated in a substantially similar capacity to his
                          President of the Adviser  current position since prior to 2006.                     
                          and Director of Stable                                                              
                          Value Investments                                                                   


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                                                        [Enlarge/Download Table]

                                                                   PRINCIPAL OCCUPATION(S)                 
FUND AND RESPONSIBLE TEAM  EMPLOYEE; YEAR; TITLE                DURING THE PAST FIVE (5) YEARS             
-----------------------------------------------------------------------------------------------------------
                                                                                                           
AllianceBernstein         Paul J. DeNoon; since     Senior Vice President of the Adviser, with which he has
Intermediate Bond         2009; Senior Vice         been associated in a substantially similar capacity to 
Portfolio                 President of the Adviser  his current position since prior to 2006.              
U.S. Investment Grade     and Director of Emerging                                                         
Core Fixed Income Team    Market Debt                                                                      

                          Shawn E. Keegan; since    (see above)                                            
                          2005; (see above)                                                                

                          Alison M. Martier; since  (see above)                                            
                          2005; (see above)                                                                

                          Douglas J. Peebles;       (see above)                                            
                          since 2007; (see above)                                                          

                          Greg J. Wilensky; since   (see above)                                            
                          2005; (see above)                                                                

AllianceBernstein Global  Paul J. DeNoon; since     (see above)                                            
Bond Fund                 2002; (see above)                                                                
Global Fixed Income                                                                                        
Investment Team                                                                                            
                          Scott DiMaggio; since     Senior Vice President of the Adviser, with which he has
                          2005; Senior Vice         been associated in a substantially similar capacity to 
                          President of the Adviser  his current position since prior to 2006.              
                          and Director of Canada                                                           
                          Fixed Income                                                                     

                          Michael L. Mon; since     Vice President of the Adviser, with which he has been  
                          2003; Vice President of   associated in a substantially similar capacity to his  
                          the Adviser               current position since prior to 2006.                  

                          Douglas J. Peebles;       (see above)                                            
                          since 1992; (see above)                                                          

                          Matthew S. Sheridan;      Vice President of the Adviser, with which he has been  
                          since 2007; Vice          associated in a substantially similar capacity to his  
                          President of the Adviser  current position since prior to 2006.                  

AllianceBernstein         Paul J. DeNoon; since     (see above)                                            
Diversified Yield Fund    2005; (see above)                                                                
Global Fixed Income                                                                                        
Investment Team and                                                                                        
Global Credit                                                                                              
Investment Team                                                                                            
                          Joran Laird; since 2009;  Vice President of the Adviser, with which he has been  
                          Vice President of the     associated in a substantially similar capacity to his  
                          Adviser                   current position since prior to 2006.                  

                          Douglas J. Peebles;       (see above)                                            
                          since 1996; (see above)                                                          

                          Matthew S. Sheridan;      (see above)                                            
                          since 2006; (see above)                                                          

                          Greg J. Wilensky; since   (see above)                                            
                          2008; (see above)                                                                

AllianceBernstein High    Paul J. DeNoon; since     (see above)                                            
Income Fund               2002; (see above)                                                                
Global Fixed Income Team                                                                                   
and Global Credit                                                                                          
Investment                                                                                                 
Team                                                                                                       
                          Gershon M. Distenfeld;    Senior Vice President of the Adviser, with which he has
                          since 2008; Senior Vice   been associated in a substantially similar capacity to 
                          President of the Adviser  his current position since prior to 2006.              

                          Douglas J. Peebles;       (see above)                                            
                          since 2002; (see above)                                                          

                          Marco Santamaria; since   Vice President of the Adviser, with which he has been  
                          2010; Vice President of   associated in a substantially similar capacity to his  
                          the Adviser               current position since June 2010. Prior thereto, he was
                                                    a founding partner at Global Securities Advisors, an   
                                                    emerging-market-oriented fixed-income hedge fund       
                                                    since prior to 2006.                                   

                          Matthew S. Sheridan;      (see above)                                            
                          since 2005; (see above)                                                          


Additional information about the portfolio managers may be found in the Funds'  
SAIs.                                                                           

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PERFORMANCE OF A SIMILARLY MANAGED PORTFOLIO                                    
The investment teams employed by the Adviser to manage ALLIANCEBERNSTEIN HIGH   
INCOME FUND and ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO have substantial  
experience in managing discretionary accounts of institutional clients, pooled  
investment vehicles and/or other registered investment companies 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 Funds. The Historical Accounts that are not        
registered investment companies are not subject to certain limitations,         
diversification requirements and other restrictions imposed under the 1940 Act  
and the Internal Revenue Code (the "Code") to which the Funds, as registered    
investment companies, are subject and which, if applicable to the Historical    
Accounts, may have adversely affected the performance of the Historical         
Accounts. With respect to ALLIANCEBERNSTEIN HIGH INCOME FUND, the Historical    
Accounts' performance information is representative solely of the performance   
of a pooled investment vehicle that is not offered for sale in the United       
States.                                                                         

Set forth below is performance data provided by the Adviser relating to the     
Historical Accounts managed by the investment team that manages each Fund's     
assets. Performance data is shown for the period during which the investment    
team of the Adviser managed the Historical Accounts through December 31, 2010.  
The aggregate assets for the Historical Accounts managed by the High Income     
investment team and the Intermediate Bond investment team as of                 
September 30, 2010 were approximately $26.6 billion and $15.6 billion,          
respectively. The investment teams' Historical Accounts have a nearly identical 
composition of representative investment holdings and related percentage        
weightings. The performance data is net of all fees (including any portfolio    
transaction costs) charged to the Historical Accounts, calculated on a monthly  
basis. The highest fee payable for the Historical Accounts is 2.04% of assets   
for ALLIANCEBERNSTEIN HIGH INCOME FUND and .91% of assets for ALLIANCEBERNSTEIN 
INTERMEDIATE BOND PORTFOLIO, annually. Net-of-fee performance figures reflect   
the compounding effect of such fees.                                            

The data has not been adjusted to reflect any fees that will be payable by the  
Funds, which may be higher than the fees imposed on the Historical Accounts,    
and will reduce the returns of the Funds. Expenses associated with the          
distribution of Class A, Class B and Class C shares of the Funds in accordance  
with the plans adopted by the Boards of the Funds under Commission Rule 12b-1   
are also excluded. Except as noted, 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 Funds 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.              

A composite benchmark, comprised of the JPMorgan Emerging Markets Bond Index    
Global ("EMBI Global"), the JPMorgan Government Bond Index-Emerging Markets     
("GBI-EM") and the Barclays Capital High Yield Index (2% Constrained) ("BC High 
Yield") on an equal weighted basis (the "High Income Composite Benchmark") is   
used by ALLIANCEBERNSTEIN HIGH INCOME FUND and its Historical Account, for      
purposes of this example, as a benchmark to measure its relative performance.   
EMBI Global tracks total returns for traded external debt instruments in the    
emerging markets, GBI-EM tracks total returns for local currency government     
bonds issued by emerging markets, and BC High Yield tracks the                  
U.S. Dollar-denominated, non-investment grade, fixed-rate, taxable corporate    
bond market.                                                                    

The Barclays Capital Aggregate Index ("BC Aggregate Index") is used by          
ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO as a benchmark to measure its     
relative performance and is composed of securities from Barclays Capital        
Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the      
Asset-Backed Securities Index. The index's total return consists of price       
appreciation/depreciation plus income as a percentage of the original           
investment. Indices are rebalanced monthly by market capitalization.            

To the extent the investment teams utilize investment techniques such as swaps, 
futures or options, the performance of the High Income Composite Benchmark and  
the BC Aggregate Index may not be substantially comparable to the performance   
of the investment teams' Historical Accounts. The High Income Composite         
Benchmark and the BC Aggregate Index do 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      
teams' performance in managing the Historical Accounts as measured against a    
broad based market index. The performance of the Funds will be affected by the  
performance of the investment team managing the Funds' assets. If the           
investment team were to perform relatively poorly, the performance of the Funds 
would suffer. Investors should not rely on the performance data of the          
Historical Accounts as an indication of future performance of the Funds.        

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    
Funds' performance. The use of methodology different from that used to          
calculate performance could result in different performance data.               

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SCHEDULE OF HISTORICAL PERFORMANCE - HISTORICAL ACCOUNTS*                       

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                                  HIGH INCOME     HIGH INCOME                                     
                               HISTORICAL ACCOUNT  COMPOSITE                           BC HIGH    
                                 TOTAL RETURN**    BENCHMARK  EMBI GLOBAL*** GBI-EM YIELD INDEX***
--------------------------------------------------------------------------------------------------
                                                                                                  
Year Ended December 31:                                                                           
2010                                  15.62%         14.01%        12.04%    13.08%      14.94%   
2009                                  60.62%         33.73%        28.18%    16.56%      58.76%   
2008                                 -32.27%        -14.79%       -10.91%    -6.93%     -25.88%   
2007                                   5.91%          8.19%         6.28%    16.28%       2.26%   
2006                                  12.56%         10.97%         9.88%    11.96%      10.76%   
2005                                   7.99%          5.46%        10.73%     2.87%       2.76%   
2004                                  11.11%         15.36%        11.73%    23.12%      11.14%   
2003                                  36.36%         24.06%        25.66%    17.79%      28.78%   
2002                                   5.26%         13.66%        13.11%    29.11%       -.24%   
2001                                 -10.44%           N/A          1.36%      N/A        5.46%   
2000                                  -4.25%           N/A         14.41%      N/A       -5.79%   
1999                                  18.76%           N/A         24.18%      N/A        2.39%   
1998                                 -15.60%           N/A        -11.54%      N/A        1.87%   
Cumulative total return for                                                                       
 the period September 22,                                                                         
 1997 (inception of                                                                               
 Historical Account) to                                                                           
 December 31, 2010                   121.73%           N/A        234.63%***   N/A      132.90%***
--------------------------------------------------------------------------------------------------

*  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 all fees.                                                             

***Net inception cumulative index returns are from December 31, 1997.           

                                                        [Enlarge/Download Table]

                                                                             INTERMEDIATE BOND   BC U.S. 
                                                                            HISTORICAL ACCOUNTS AGGREGATE
                                                                              TOTAL RETURN**      INDEX  
---------------------------------------------------------------------------------------------------------
                                                                                                         
Year Ended December 31:                                                                                  
2010                                                                                9.45%          6.54% 
2009                                                                               18.77%          5.93% 
2008                                                                               -5.41%          5.24% 
2007                                                                                5.60%          6.97% 
2006                                                                                5.26%          4.33% 
2005                                                                                3.22%          2.43% 
2004                                                                                5.48%          4.34% 
2003                                                                                8.45%          4.10% 
2002                                                                                7.93%         10.26% 
Cumulative total return for the period June 30, 2001 (inception of                                       
 Historical Accounts) to December 31, 2010                                         81.89%         70.18% 
---------------------------------------------------------------------------------------------------------

*  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 all fees.                                                             

AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2010                            

                                                                [Download Table]

                                                                   SINCE  
                                 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
--------------------------------------------------------------------------
                                                                          
High Income Historical Account   15.62%   7.94%  8.44%    8.75%    6.18%* 
High Income Composite Benchmark  14.01%   9.12%  9.30%     N/A      N/A   
   EMBI Global                   12.04%   8.56%  8.36%   10.29%    9.74%**
   GBI-EM                        13.08%   7.06%  9.82%     N/A      N/A   
   BC High Yield                 14.94%  10.59%  8.91%    9.01%    6.72%**
--------------------------------------------------------------------------

* Inception date of Historical Account is September 22, 1997.                   

**Since inception average annual total returns are from December 31, 1997.      

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                                                                [Download Table]

                                                                SINCE  
                                       1 YEAR 3 YEARS 5 YEARS INCEPTION
-----------------------------------------------------------------------
                                                                       
Intermediate Bond Historical Accounts   9.45%  7.13%   6.45%    6.50%* 
BC U.S. Aggregate Index                 6.54%  5.90%   5.80%    5.76%* 
-----------------------------------------------------------------------

* Inception date of Historical Accounts is June 30, 2001.                       

TRANSFER AGENCY AND RETIREMENT PLAN SERVICES                                    
ABIS acts as the transfer agent for the Funds. 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 Funds often do not maintain an 
account for you. Thus, some or all of the transfer agency functions for these   
and certain other accounts are performed by the financial intermediaries and    
plan recordkeepers. The Funds, ABI and/or the Adviser pay to these financial    
intermediaries and recordkeepers, including those that sell shares of the       
AllianceBernstein Mutual Funds, fees for sub-transfer agency and recordkeeping  
services in amounts ranging up to $19 per customer fund 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 Funds, 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 the 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 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.     

48                                                                              

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

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

If you receive an income dividend or capital gains distribution in cash you     
may, within 120 days following the date of its payment, reinvest the dividend   
or distribution in additional shares of that Fund without charge by returning   
to 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 that Fund.                                                         

While it is the intention of each Fund to distribute to its shareholders        
substantially all of each fiscal year's net income and net realized capital     
gains, if any, the amount and timing of any dividend or distribution will       
depend on the realization by the Fund of income and capital gains from          
investments. There is no fixed dividend rate and there can be no assurance that 
a Fund will pay any dividends or realize any capital gains. The final           
determination of the amount of a Fund's return of capital distributions for the 
period will be made after the end of each calendar year.                        

You will normally have to pay federal income tax, and any state or local income 
taxes, on the distributions you receive from a Fund, whether you take the       
distributions in cash or reinvest them in additional shares. Distributions of   
net capital gains from the sale of investments that a Fund owned for more than  
one year and that are properly designated as capital gain dividends are taxable 
as long-term capital gains. For taxable years beginning on or before            
December 31, 2012, distributions of dividends to a Fund's non-corporate         
shareholders may be treated as "qualified dividend income," which is taxed at   
reduced rates, if such distributions are derived from, and designated by a Fund 
as, "qualified dividend income" and provided that holding period and other      
requirements are met by both the shareholder and the Fund. "Qualified dividend  
income" generally is income derived from dividends from U.S. corporations and   
"qualified foreign corporations." Other distributions by a Fund are generally   
taxable to you as ordinary income. Dividends declared in October, November, or  
December and paid in January of the following year are taxable as if they had   
been paid the previous December. A Fund will notify you as to how much of the   
Fund's distributions, if any, qualify for these reduced tax rates.              

Investment income received by a Fund from sources within foreign countries may  
be subject to foreign income taxes withheld at the source. To the extent that   
any Fund is liable for foreign income taxes withheld at the source, the Fund    
intends, if possible, to operate so as to meet the requirements of the Code to  
"pass through" to the Fund's shareholders credits for foreign income taxes paid 
(or to permit shareholders to claim a deduction for such foreign taxes), but    
there can be no assurance that any Fund will be able to do so, and Funds that   
invest primarily in U.S. securities will not do so. Furthermore, a              
shareholder's ability to claim a foreign tax credit or deduction for foreign    
taxes paid by a Fund may be subject to certain limitations imposed by the Code, 
as a result of which a shareholder may not be permitted to claim a credit or    
deduction for all or a portion of the amount of such taxes.                     

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

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

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

Each year shortly after December 31, each Fund will send you tax information    
stating the amount and type of all its distributions for the year. You are      
encouraged to consult your tax adviser about the federal, state, and local tax  
consequences in your particular circumstances, as well as about any possible    
foreign tax consequences.                                                       

NON-U.S. SHAREHOLDERS                                                           
If you are a nonresident alien individual or a foreign corporation for federal  
income tax purposes, please see the Funds' SAIs for information on how you will 
be taxed as a result of holding shares in the Funds.                            

                                                                            49

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

Under unusual circumstances, a Fund may suspend redemptions or postpone payment 
for up to seven days or longer, as permitted by federal securities law. The     
Funds reserve the right to close an account that 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 Funds, 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 800-221-5672. We will resume separate mailings for your      
account within 30 days of your request.                                         

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GLOSSARY OF INVESTMENT TERMS                                                    
--------------------------------------------------------------------------------

BONDS are interest-bearing or discounted government or corporate securities     
that obligate the issuer to pay the bond holder a specified sum of money,       
usually at specified intervals, and to repay the principal amount of the loan   
at maturity.                                                                    

FIXED-INCOME SECURITIES are investments, such as bonds, that pay a fixed rate   
of return.                                                                      

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

SOVEREIGN DEBT OBLIGATIONS are foreign government debt securities, loan         
participations between foreign governments and financial institutions, and      
interests in entities organized and operated for the purpose of restructuring   
the investment characteristics of foreign government securities.                

SUPRANATIONAL ENTITIES are international organizations formed by two or more    
governments. Examples of supranational entities include the International Bank  
for Reconstruction and Development, the Inter-American Development Bank, the    
Asian Development Bank, the African Development Bank, the International Finance 
Corporation and the European Bank for Reconstruction and Development.           

U.S. GOVERNMENT SECURITIES are securities issued or guaranteed by the U.S.      
Government, its agencies or instrumentalities, including obligations that are   
issued by private issuers that are guaranteed as to principal or interest by    
the U.S. Government, its agencies or instrumentalities, or by certain           
government-sponsored entities (entities chartered by or sponsored by Act of     
Congress). These securities include securities backed by the full faith and     
credit of the United States, those supported by the right of the issuer to      
borrow from the U.S. Treasury, and those backed only by the credit of the       
issuing agency or entity itself. The first category includes U.S. Treasury      
securities (which are U.S. Treasury bills, notes, and bonds) and certificates   
issued by GNMA. U.S. Government securities not backed by the full faith and     
credit of the United States or a right to borrow from the U.S. Treasury include 
certificates issued by FNMA and FHLMC.                                          

THE BOFA MERRILL LYNCH 3-MONTH T-BILL INDEX is an unmanaged index that measures 
returns of three-month Treasury Bills.                                          

THE BOFA MERRILL LYNCH 1-3 YEAR TREASURY INDEX is an unmanaged index consisting 
of all public U.S. Treasury obligations having maturities from 1 to 2.99 years  
and reflects total return. This unmanaged index does not reflect fees and       
expenses and is not available for direct investment.                            

THE BARCLAYS CAPITAL U.S. AGGREGATE INDEX is a broad-based bond index comprised 
of government, corporate, mortgage and asset-backed issues, rated investment    
grade or higher, and having at least one year to maturity.                      

THE BARCLAYS CAPITAL GLOBAL AGGREGATE INDEX is a macro index of global          
government and corporate bond markets, and is composed of various indices       
calculated by Barclays Capital, including the U.S. Aggregate Index, the         
Pan-European Aggregate Index, the Global Treasury Index, the Asian-Pacific      
Aggregate Index, the Eurodollar Index and the U.S. Investment-Grade 144A Index. 

THE BARCLAYS CAPITAL HIGH YIELD INDEX is an unmanaged index generally           
representative of corporate bonds rated below investment grade.                 

THE JPMORGAN EMERGING MARKETS BOND INDEX GLOBAL is a broad-based, unmanaged     
index which tracks total return for external currency denominated debt in       
emerging markets.                                                               

THE JPMORGAN GOVERNMENT BOND INDEX-EMERGING MARKETS is a definitive local       
emerging markets debt benchmark that tracks local currency government bonds     
issued by emerging markets.                                                     

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FINANCIAL HIGHLIGHTS                                                            
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand each Fund's   
financial performance for the past five years. Certain information reflects     
financial results for a single share of a class of each Fund. The total returns 
in the table represent the rate that an investor would have earned (or lost) on 
an investment in the Fund (assuming reinvestment of all dividends and           
distributions). This information has been audited by Ernst & Young, LLP, the    
independent registered public accounting firm for all Funds, except             
ALLIANCEBERNSTEIN SHORT DURATION PORTFOLIO, whose independent registered public 
accounting firm is PricewaterhouseCoopers LLP, whose reports, along with each   
Fund's financial statements, are included in each Fund's Annual Report, which   
is available upon request.                                                      

52                                                                              

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                                                        [Enlarge/Download Table]

                                   INCOME FROM INVESTMENT OPERATIONS         LESS: DIVIDENDS AND DISTRIBUTIONS   
                               --------------------------------------     -------------------------------------- 
                                                            NET INCREASE                                         
                     NET ASSET                NET REALIZED   (DECREASE)   DIVIDENDS  DISTRIBUTIONS               
                      VALUE,      NET        AND UNREALIZED IN NET ASSET   FROM NET     FROM NET     TOTAL DIVI- 
FISCAL YEAR OR       BEGINNING INVESTMENT    GAIN (LOSS) ON  VALUE FROM   INVESTMENT REALIZED GAIN    DENDS AND  
PERIOD               OF PERIOD INCOME (a)     INVESTMENTS    OPERATIONS     INCOME   ON INVESTMENTS DISTRIBUTIONS
-----------------------------------------------------------------------------------------------------------------
                                                                                                                 
SHORT DURATION                                                                                                   
CLASS A                                                                                                          
Year Ended 9/30/10    $11.65      $.16           $  .30        $  .46       $(.19)       $0.00          $(.19)   
Year Ended 9/30/09     11.46       .31              .21           .52        (.33)        0.00           (.33)   
Year Ended 9/30/08     12.24       .43             (.77)         (.34)       (.44)        0.00           (.44)   
Year Ended 9/30/07     12.31       .51             (.05)          .46        (.53)        0.00           (.53)   
Year Ended 9/30/06     12.39       .45             (.06)          .39        (.47)        0.00           (.47)   

CLASS B                                                                                                          
Year Ended 9/30/10    $11.64      $.08           $  .30        $  .38       $(.10)       $0.00          $(.10)   
Year Ended 9/30/09     11.45       .23              .20           .43        (.24)        0.00           (.24)   
Year Ended 9/30/08     12.24       .34             (.77)         (.43)       (.36)        0.00           (.36)   
Year Ended 9/30/07     12.31       .43             (.06)          .37        (.44)        0.00           (.44)   
Year Ended 9/30/06     12.39       .36             (.05)          .31        (.39)        0.00           (.39)   

CLASS C                                                                                                          
Year Ended 9/30/10    $11.64      $.08           $  .30        $  .38       $(.10)       $0.00          $(.10)   
Year Ended 9/30/09     11.45       .24              .20           .44        (.25)        0.00           (.25)   
Year Ended 9/30/08     12.23       .34             (.76)         (.42)       (.36)        0.00           (.36)   
Year Ended 9/30/07     12.30       .43             (.06)          .37        (.44)        0.00           (.44)   
Year Ended 9/30/06     12.38       .36             (.05)          .31        (.39)        0.00           (.39)   

INTERMEDIATE BOND                                                                                                
CLASS A                                                                                                          
Year Ended 10/31/10   $10.28      $.42(e)        $  .70        $ 1.12       $(.42)       $0.00          $(.42)   
Year Ended 10/31/09     8.77       .44(e)          1.53          1.97        (.46)        0.00           (.46)   
Year Ended 10/31/08    10.24       .50(e)         (1.49)         (.99)(h)    (.48)        0.00           (.48)   
Year Ended 10/31/07    10.18       .42(e)           .06           .48        (.42)        0.00           (.42)   
Year Ended 10/31/06    10.15       .41(e)           .04           .45        (.42)        0.00           (.42)   

CLASS B                                                                                                          
Year Ended 10/31/10   $10.28      $.35(e)        $  .70        $ 1.05       $(.35)       $0.00          $(.35)   
Year Ended 10/31/09     8.77       .38(e)          1.52          1.90        (.39)        0.00           (.39)   
Year Ended 10/31/08    10.23       .42(e)         (1.47)        (1.05)(h)    (.41)        0.00           (.41)   
Year Ended 10/31/07    10.18       .35(e)(i)        .05           .40        (.35)        0.00           (.35)   
Year Ended 10/31/06    10.15       .38(e)(i)        .04           .42        (.39)        0.00           (.39)   

CLASS C                                                                                                          
Year Ended 10/31/10   $10.26      $.35(e)        $  .70        $ 1.05       $(.35)       $0.00          $(.35)   
Year Ended 10/31/09     8.75       .38(e)          1.52          1.90        (.39)        0.00           (.39)   
Year Ended 10/31/08    10.22       .43(e)         (1.49)        (1.06)(h)    (.41)        0.00           (.41)   
Year Ended 10/31/07    10.16       .35(e)           .06           .41        (.35)        0.00           (.35)   
Year Ended 10/31/06    10.13       .34(e)           .04           .38        (.35)        0.00           (.35)   

ADVISOR CLASS                                                                                                    
Year Ended 10/31/10   $10.28      $.44(e)        $  .73        $ 1.17       $(.46)       $0.00          $(.46)   
Year Ended 10/31/09     8.78       .47(e)          1.51          1.98        (.48)        0.00           (.48)   
Year Ended 10/31/08    10.24       .50(e)         (1.45)         (.95)(h)    (.51)        0.00           (.51)   
Year Ended 10/31/07    10.18       .45(e)           .06           .51        (.45)        0.00           (.45)   
Year Ended 10/31/06    10.15       .44(e)           .04           .48        (.45)        0.00           (.45)   
-----------------------------------------------------------------------------------------------------------------

Please refer to the footnotes on page 60.                                       

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                                                        [Enlarge/Download Table]

                                           RATIOS/SUPPLEMENTAL DATA                   
                         ------------------------------------------------------------ 
              TOTAL                                        RATIO OF NET               
            INVESTMENT                      RATIO OF        INVESTMENT                
NET ASSET  RETURN BASED    NET ASSETS,      EXPENSES          INCOME         PORTFOLIO
VALUE, END ON NET ASSET   END OF PERIOD    TO AVERAGE       TO AVERAGE       TURNOVER 
OF PERIOD   VALUE (b)    (000'S OMITTED)   NET ASSETS       NET ASSETS         RATE   
--------------------------------------------------------------------------------------
                                                                                      
  $11.92        3.95%(c)    $ 65,233         .94%(c)           1.35%(c)         107%  
   11.65        4.61          53,643         .99               2.72             176   
   11.46       (2.83)(d)      33,197         .96               3.60             116   
   12.24        3.80          40,444         .98               4.21             127   
   12.31        3.23          37,595        1.03(c)            3.63(c)          157   

  $11.92        3.27%(d)    $  6,538        1.69%(c)            .72%(c)         107%  
   11.64        3.86           8,913        1.72               2.02             176   
   11.45       (3.59)(d)       9,125        1.66               2.91             116   
   12.24        3.09          10,791        1.68               3.48             127   
   12.31        2.55          16,899        1.73(c)            2.91(c)          157   

  $11.92        3.31%(d)    $ 27,105        1.65%(c)            .66%(c)         107%  
   11.64        3.88          25,193        1.70               2.04             176   
   11.45       (3.52)(d)      16,176        1.66               2.89             116   
   12.23        3.09          14,772        1.69               3.49             127   
   12.30        2.54          18,923        1.74(c)            2.93(c)          157   

  $10.98       11.17%(d)    $418,023         .91%(c)(f)(g)     3.98%(c)(e)       99%  
   10.28       23.01(d)      419,319         .89(f)(g)         4.71(e)           95   
    8.77      (10.15)(d)     360,606         .85(g)            4.68(e)          184   
   10.24        4.79(d)       41,696         .98(g)            4.13(e)          173   
   10.18        4.51          44,409         .98(c)(g)         4.08(c)(e)       446   

  $10.98       10.40%(d)    $ 16,048        1.62%(c)(f)(g)     3.35%(c)(e)       99%  
   10.28       22.17(d)       21,830        1.58(f)(g)         4.07(e)           95   
    8.77      (10.69)(d)      31,207        1.55(g)            3.95(e)          184   
   10.23        3.96(d)       20,157        1.66(g)            3.46(e)(i)       173   
   10.18        4.20          30,154        1.33(c)(g)         3.75(c)(e)(i)    446   

  $10.96       10.42%(d)    $ 66,568        1.61%(c)(f)(g)     3.27%(c)(e)       99%  
   10.26       22.22(d)       61,635        1.59(f)(g)         4.02(e)           95   
    8.75      (10.80)(d)      51,708        1.55(g)            3.99(e)          184   
   10.22        4.07(d)        9,404        1.68(g)            3.45(e)          173   
   10.16        3.80           9,874        1.68(c)(g)         3.40(c)(e)       446   

  $10.99       11.59%(d)    $ 89,981         .60%(c)(f)(g)     4.19%(c)(e)       99%  
   10.28       23.23(d)       62,369         .60(f)(g)         4.95(e)           95   
    8.78       (9.78)(d)      33,139         .55(g)            4.98(e)          184   
   10.24        5.11(d)       32,375         .68(g)            4.44(e)          173   
   10.18        4.83          29,966         .68(c)(g)         4.38(c)(e)       446   
--------------------------------------------------------------------------------------

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                                    INCOME FROM INVESTMENT OPERATIONS          LESS: DIVIDENDS AND DISTRIBUTIONS       
                                 -----------------------------------     --------------------------------------------- 
                                                           NET INCREASE                     DISTRIBUTIONS              
                       NET ASSET             NET REALIZED   (DECREASE)   DIVIDENDS    TAX     FROM NET                 
                        VALUE,      NET     AND UNREALIZED IN NET ASSET   FROM NET  RETURN  REALIZED GAIN  TOTAL DIVI- 
                       BEGINNING INVESTMENT GAIN (LOSS) ON  VALUE FROM   INVESTMENT   OF         ON         DENDS AND  
FISCAL YEAR OR PERIOD  OF PERIOD INCOME (a)  INVESTMENTS    OPERATIONS     INCOME   CAPITAL  INVESTMENTS  DISTRIBUTIONS
-----------------------------------------------------------------------------------------------------------------------
                                                                                                                       
GLOBAL BOND                                                                                                            
CLASS A                                                                                                                
Year Ended 9/30/10       $7.87      $.32(e)     $  .63        $  .95       $(.32)    $(.00)     $0.00         $(.32)   
Year Ended 9/30/09        7.39       .40(e)        .60          1.00        (.40)     (.00)      (.12)         (.52)   
Year Ended 9/30/08        8.07       .42(e)       (.70)         (.28)       (.40)     (.00)      0.00          (.40)   
Year Ended 9/30/07        7.54       .40           .52           .92        (.39)     (.00)      0.00          (.39)   
Year Ended 9/30/06        7.69       .44          (.15)          .29        (.44)     (.00)      0.00          (.44)   

CLASS B                                                                                                                
Year Ended 9/30/10       $7.88      $.27(e)     $  .63        $  .90       $(.27)    $(.00)     $0.00         $(.27)   
Year Ended 9/30/09        7.39       .35(e)        .61           .96        (.35)     (.00)      (.12)         (.47)   
Year Ended 9/30/08        8.07       .36(e)       (.70)         (.34)       (.34)     (.00)      0.00          (.34)   
Year Ended 9/30/07        7.54       .34           .52           .86        (.33)     (.00)      0.00          (.33)   
Year Ended 9/30/06        7.68       .38          (.14)          .24        (.38)     (.00)      0.00          (.38)   

CLASS C                                                                                                                
Year Ended 9/30/10       $7.90      $.27(e)     $  .63        $  .90       $(.27)    $(.00)     $0.00         $(.27)   
Year Ended 9/30/09        7.41       .35(e)        .61           .96        (.35)     (.00)      (.12)         (.47)   
Year Ended 9/30/08        8.09       .36(e)       (.70)         (.34)       (.34)     (.00)      0.00          (.34)   
Year Ended 9/30/07        7.56       .34           .52           .86        (.33)     (.00)      0.00          (.33)   
Year Ended 9/30/06        7.71       .38          (.15)          .23        (.38)     (.00)      0.00          (.38)   

ADVISOR CLASS                                                                                                          
Year Ended 9/30/10       $7.87      $.34(e)     $  .64        $  .98       $(.35)    $(.00)     $0.00         $(.35)   
Year Ended 9/30/09        7.38       .41(e)        .62          1.03        (.42)     (.00)      (.12)         (.54)   
11/5/07(j) to 9/30/08     8.14       .41(e)       (.78)         (.37)       (.39)     (.00)      0.00          (.39)   

DIVERSIFIED YIELD                                                                                                      
CLASS A                                                                                                                
Year Ended 10/31/10      $8.10      $.24(e)     $  .39        $  .63       $(.23)    $(.00)     $0.00         $(.23)   
Year Ended 10/31/09       7.39       .32(e)        .71          1.03        (.28)     (.04)      0.00          (.32)   
Year Ended 10/31/08       9.02       .36(e)      (1.63)        (1.27)(h)    (.36)     (.00)      0.00          (.36)   
Year Ended 10/31/07       8.62       .34           .40           .74        (.34)     (.00)      0.00          (.34)   
Year Ended 10/31/06       8.70       .34           .14           .48        (.34)     (.00)      (.22)         (.56)   

CLASS B                                                                                                                
Year Ended 10/31/10      $8.11      $.18(e)     $  .39        $  .57       $(.17)    $(.00)     $0.00         $(.17)   
Year Ended 10/31/09       7.40       .26(e)        .72           .98        (.23)     (.04)      0.00          (.27)   
Year Ended 10/31/08       9.03       .30(e)      (1.64)        (1.34)(h)    (.29)     (.00)      0.00          (.29)   
Year Ended 10/31/07       8.63       .26           .41           .67        (.27)     (.00)      0.00          (.27)   
Year Ended 10/31/06       8.70       .28           .14           .42        (.27)     (.00)      (.22)         (.49)   

CLASS C                                                                                                                
Year Ended 10/31/10      $8.10      $.18(e)     $  .39        $  .57       $(.17)    $(.00)     $0.00         $(.17)   
Year Ended 10/31/09       7.40       .26(e)        .71           .97        (.23)     (.04)      0.00          (.27)   
Year Ended 10/31/08       9.02       .29(e)      (1.61)        (1.32)(h)    (.30)     (.00)      0.00          (.30)   
Year Ended 10/31/07       8.63       .27           .39           .66        (.27)     (.00)      0.00          (.27)   
Year Ended 10/31/06       8.71       .28           .14           .42        (.28)     (.00)      (.22)         (.50)   

ADVISOR CLASS                                                                                                          
Year Ended 10/31/10      $8.09      $.26(e)     $  .39        $  .65       $(.25)    $(.00)     $0.00         $(.25)   
Year Ended 10/31/09       7.39       .32(e)        .72          1.04        (.30)     (.04)      0.00          (.34)   
Year Ended 10/31/08       9.02       .38(e)      (1.63)        (1.25)(h)    (.38)     (.00)      0.00          (.38)   
Year Ended 10/31/07       8.62       .37           .39           .76        (.36)     (.00)      0.00          (.36)   
Year Ended 10/31/06       8.70       .36           .14           .50        (.36)     (.00)      (.22)         (.58)   
-----------------------------------------------------------------------------------------------------------------------

Please refer to the footnotes on page 60.                                       

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                                                                [Download Table]

                                          RATIOS/SUPPLEMENTAL DATA                  
                         ---------------------------------------------------------- 
              TOTAL                                        RATIO OF NET             
            INVESTMENT                      RATIO OF        INVESTMENT              
NET ASSET  RETURN BASED    NET ASSETS,      EXPENSES          INCOME       PORTFOLIO
VALUE, END ON NET ASSET   END OF PERIOD    TO AVERAGE       TO AVERAGE     TURNOVER 
OF PERIOD   VALUE (b)    (000'S OMITTED)   NET ASSETS       NET ASSETS       RATE   
------------------------------------------------------------------------------------
                                                                                    
  $8.50        12.38%      $1,744,323        .98%(c)(f)(g)     3.98%(c)(e)     69%  
   7.87        14.65        1,367,036        .93(f)(g)         5.65(e)         91   
   7.39        (3.75)       1,425,649       1.04(f)(g)         5.19(e)        140   
   8.07        12.47        1,071,398       1.80(f)            5.09           170   
   7.54         3.90          935,901       1.04(c)            5.81(c)        104   

  $8.51        11.60%      $   80,989       1.68%(c)(f)(g)     3.34%(c)(e)     69%  
   7.88        14.01           98,925       1.63(f)(g)         4.95(e)         91   
   7.39        (4.44)         137,926       1.75(f)(g)         4.52(e)        140   
   8.07        11.65          171,078       2.53(f)            4.36           170   
   7.54         3.28          277,450       1.76(c)            5.10(c)        104   

  $8.53        11.55%      $  684,415       1.67%(c)(f)(g)     3.26%(c)(e)     69%  
   7.90        13.95          526,963       1.63(f)(g)         4.92(e)         91   
   7.41        (4.42)         492,541       1.75(f)(g)         4.46(e)        140   
   8.09        11.65          307,616       2.50(f)            4.37           170   
   7.56         3.15          256,047       1.74(c)            5.07(c)        104   

  $8.50        12.71%      $  457,794        .66%(c)(f)(g)     4.21%(c)(e)     69%  
   7.87        15.10          191,855        .64(f)(g)         5.88(e)         91   
   7.38        (4.83)          89,152        .74(f)(g)(k)      5.37(e)(k)     140   

  $8.50         7.88%(d)   $   42,733        .90%(c)(g)        2.83%(c)(e)     54%  
   8.10        14.45(d)        46,138        .90(g)            4.24(e)         86   
   7.39       (14.57)(d)       39,639        .90(g)            4.13(e)         81   
   9.02         8.60(d)        48,542       1.47               3.81           134   
   8.62         5.61           25,348       1.78(c)(f)         3.93(c)        169   

  $8.51         7.13%(d)   $    3,856       1.60%(c)(g)        2.15%(c)(e)     54%  
   8.11        13.65(d)         6,226       1.60(g)            3.66(e)         86   
   7.40       (15.15)(d)       13,666       1.60(g)            3.43(e)         81   
   9.03         7.77(d)        27,303       2.28               2.93           134   
   8.63         4.96           40,136       2.50(c)(f)         3.24(c)        169   

  $8.50         7.13%(d)   $   13,236       1.60%(c)(g)        2.13%(c)(e)     54%  
   8.10        13.50(d)        14,376       1.60(g)            3.53(e)         86   
   7.40       (15.05)(d)       11,245       1.60(g)            3.44(e)         81   
   9.02         7.69(d)        15,208       2.20               3.03           134   
   8.63         4.86           11,040       2.49(c)(f)         3.22(c)        169   

  $8.49         8.21%(d)   $   12,660        .60%(c)(g)        3.14%(c)(e)     54%  
   8.09        14.64(d)        12,255        .60(g)            4.39(e)         86   
   7.39       (14.31)(d)        3,756        .60(g)            4.42(e)         81   
   9.02         8.89(d)         5,529       1.14               4.00           134   
   8.62         5.94            2,494       1.49(c)(f)         4.17(c)        169   
------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]

                                  INCOME FROM INVESTMENT OPERATIONS           LESS: DIVIDENDS AND DISTRIBUTIONS       
                               -----------------------------------     ---------------------------------------------- 
                                                         NET INCREASE                                                 
                     NET ASSET             NET REALIZED   (DECREASE)   DIVIDENDS    TAX   DISTRIBUTIONS               
                      VALUE,      NET     AND UNREALIZED IN NET ASSET   FROM NET  RETURN     FROM NET     TOTAL DIVI- 
FISCAL YEAR OR       BEGINNING INVESTMENT GAIN (LOSS) ON  VALUE FROM   INVESTMENT   OF    REALIZED GAIN    DENDS AND  
PERIOD               OF PERIOD INCOME (a)  INVESTMENTS    OPERATIONS     INCOME   CAPITAL ON INVESTMENTS DISTRIBUTIONS
----------------------------------------------------------------------------------------------------------------------
                                                                                                                      
HIGH INCOME                                                                                                           
CLASS A                                                                                                               
Year Ended 10/31/10    $8.24      $.69(e)     $  .96        $ 1.65(h)    $(.70)    $(.00)     $0.00          $(.70)   
Year Ended 10/31/09     5.85       .67(e)       2.44          3.11        (.69)     (.01)      (.02)          (.72)   
Year Ended 10/31/08     9.02       .61(e)      (2.87)        (2.26)(h)    (.68)     (.00)      (.23)          (.91)   
Year Ended 10/31/07     8.97       .56           .41           .97        (.57)     (.00)      (.35)          (.92)   
Year Ended 10/31/06     8.70       .55           .43           .98        (.57)     (.00)      (.14)          (.71)   

CLASS B                                                                                                               
Year Ended 10/31/10    $8.31      $.63(e)     $  .96        $ 1.59(h)    $(.64)    $(.00)     $0.00          $(.64)   
Year Ended 10/31/09     5.90       .62(e)       2.46          3.08        (.64)     (.01)      (.02)          (.67)   
Year Ended 10/31/08     9.09       .55(e)      (2.89)        (2.34)(h)    (.62)     (.00)      (.23)          (.85)   
Year Ended 10/31/07     9.05       .49           .41           .90        (.51)     (.00)      (.35)          (.86)   
Year Ended 10/31/06     8.77       .49           .44           .93        (.51)     (.00)      (.14)          (.65)   

CLASS C                                                                                                               
Year Ended 10/31/10    $8.33      $.62(e)     $  .97        $ 1.59(h)    $(.63)    $(.00)     $0.00          $(.63)   
Year Ended 10/31/09     5.92       .62(e)       2.46          3.08        (.64)     (.01)      (.02)          (.67)   
Year Ended 10/31/08     9.11       .55(e)      (2.89)        (2.34)(h)    (.62)     (.00)      (.23)          (.85)   
Year Ended 10/31/07     9.07       .49           .41           .90        (.51)     (.00)      (.35)          (.86)   
Year Ended 10/31/06     8.79       .49           .44           .93        (.51)     (.00)      (.14)          (.65)   

ADVISOR CLASS                                                                                                         
Year Ended 10/31/10    $8.25      $.71(e)     $  .97        $ 1.68(h)    $(.73)    $(.00)     $0.00          $(.73)   
Year Ended 10/31/09     5.86       .72(e)       2.41          3.13        (.71)     (.01)      (.02)          (.74)   
1/28/08(j) to                                                                                                         
 10/31/08               8.52       .52(e)      (2.69)        (2.17)(h)    (.49)     (.00)      0.00           (.49)   
----------------------------------------------------------------------------------------------------------------------

Please refer to the footnotes on page 60.                                       

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                                            RATIOS/SUPPLEMENTAL DATA                    
                         -------------------------------------------------------------- 
              TOTAL                                           RATIO OF NET              
            INVESTMENT                       RATIO OF          INVESTMENT               
NET ASSET  RETURN BASED    NET ASSETS,       EXPENSES            INCOME        PORTFOLIO
VALUE, END ON NET ASSET   END OF PERIOD     TO AVERAGE         TO AVERAGE      TURNOVER 
OF PERIOD   VALUE (b)    (000'S OMITTED)    NET ASSETS         NET ASSETS        RATE   
----------------------------------------------------------------------------------------
                                                                                        
  $9.19        20.85%(d)   $1,326,974        .99%(c)(f)(g)       7.93%(c)(e)      26%   
   8.24        57.11(d)       780,222        .99(f)(g)          10.13(e)          46    
   5.85       (27.49)(d)      450,517       1.03(c)(f)(g)        7.65(c)(e)       74    
   9.02        11.54          281,677       1.41(c)(f)           6.24(c)          67    
   8.97        11.87          235,763       1.48(f)              6.32             75    

  $9.26        19.86%(d)   $   40,092       1.70%(c)(f)(g)       7.25%(c)(e)      26%   
   8.31        55.89(d)        52,041       1.68(f)(g)           9.46(e)          46    
   5.90       (28.03)(d)       54,724       1.74(c)(f)(g)        6.83(c)(e)       74    
   9.09        10.51           35,058       2.14(c)(f)           5.45(c)          67    
   9.05        11.11           45,133       2.18(f)              5.55             75    

  $9.29        19.88%(d)   $  541,386       1.69%(c)(f)(g)       7.08%(c)(e)      26%   
   8.33        55.68(d)       222,632       1.69(f)(g)           9.27(e)          46    
   5.92       (27.95)(d)      112,508       1.75(c)(f)(g)        6.82(c)(e)       74    
   9.11        10.50           86,525       2.11(c)(f)           5.47(c)          67    
   9.07        11.10           88,046       2.17(f)              5.54             75    

  $9.20        21.22%(d)   $  385,380        .68%(c)(f)(g)       8.12%(c)(e)      26%   
   8.25        57.57(d)        76,843        .72(f)(g)          10.07(e)          46    
   5.86       (26.77)(d)        6,095        .69(c)(f)(g)(k)     8.16(c)(e)(k)    74    
----------------------------------------------------------------------------------------

                                                                            59

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(a)Based on average shares outstanding.                                         

(b)Total investment return is calculated assuming an initial investment made at 
the NAV at the beginning of the period, reinvestment of all dividends and 
  distributions at the NAV during the period, and a redemption on the last day
 of the period. Initial sales charge or contingent deferred sales charge, if
 applicable, is not reflected in the calculation of total investment return.
Total investment return does not reflect the deduction of taxes that a    
shareholder would pay on fund distributions or the redemption of fund     
shares. Total investment returns calculated for periods of less than one  
year are not annualized.                                                  

(c)The ratio includes expenses attributable to costs of proxy solicitation.     

(d)Includes the impact of proceeds received and credited to the Fund resulting  
from the class action settlements, which enhanced the performance of each 
share class.                                                              

                                                                [Download Table]

                                     FOR FISCAL YEAR ENDED      
----------------------------------------------------------------
                                                                
ALLIANCEBERNSTEIN SHORT DURATION      September 30, 2010    .01%
                                      September 30, 2008    .05%
ALLIANCEBERNSTEIN INTERMEDIATE BOND   October 31, 2010      .01%
                                      October 31, 2009      .01%
                                      October 31, 2008      .21%
                                      October 31, 2007      .61%
ALLIANCEBERNSTEIN DIVERSIFIED YIELD   October 31, 2010      .55%
                                      October 31, 2009      .57%
                                      October 31, 2008      .81%
                                      October 31, 2007     4.31%
ALLIANCEBERNSTEIN HIGH INCOME         October 31, 2010      .15%
                                      October 31, 2009      .05%
                                      October 31, 2008      .41%

(e)Net of fees waived and expenses reimbursed by the Adviser.                   

(f)Includes interest expense. For the following Funds, the ratio of gross       
 expenses to average net assets, excluding interest expense (and any related
expenses), would have been as follows:                                    

                                                                [Download Table]

                                      2010  2009   2008   2007   2006 
----------------------------------------------------------------------
                                                                      
ALLIANCEBERNSTEIN INTERMEDIATE BOND                                   
Class A                              1.05%* 1.07%                     
Class B                              1.81%* 1.84%                     
Class C                              1.77%* 1.78%                     
Advisor Class                         .75%*  .76%                     
ALLIANCEBERNSTEIN GLOBAL BOND                                         
Class A                               .95%*  .97% 1.01%  1.05%        
Class B                              1.68%* 1.71% 1.73%  1.77%        
Class C                              1.65%* 1.67% 1.71%  1.75%        
Advisor Class                         .65%*  .65%  .74%               
ALLIANCEBERNSTEIN DIVERSIFIED YIELD                                   
Class A                                                         1.72%*
Class B                                                         2.45%*
Class C                                                         2.44%*
Advisor Class                                                   1.44%*
ALLIANCEBERNSTEIN HIGH INCOME                                         
Class A                              1.00%* 1.09% 1.07%* 1.14%* 1.14% 
Class B                              1.73%* 1.85% 1.80%* 1.87%* 1.85% 
Class C                              1.69%* 1.79% 1.77%* 1.85%* 1.84% 
Advisor Class                         .70%*  .76%  .76%*              

--------                                                                        
*The ratio includes expenses attributable to costs of proxy solicitation. 

(g)Net of fees waived by the Adviser. If the following Funds had borne all      
  expenses for the respective year ends, the expense ratios would have been as
follows:                                                                  

                                                                [Download Table]

                                      2010  2009  2008  2007   2006 
--------------------------------------------------------------------
                                                                    
ALLIANCEBERNSTEIN INTERMEDIATE BOND                                 
Class A                              1.11%* 1.11% 1.09% 1.54% 1.34%*
Class B                              1.88%* 1.87% 1.83% 2.29% 2.10%*
Class C                              1.83%* 1.82% 1.80% 2.27% 2.07%*
Advisor Class                         .80%*  .80%  .80% 1.25% 1.02%*
ALLIANCEBERNSTEIN GLOBAL BOND                                       
Class A                              1.02%* 1.00% 1.15%             
Class B                              1.76%* 1.73% 1.88%             
Class C                              1.73%* 1.70% 1.86%             
Advisor Class                         .72%*  .69%  .88%             
ALLIANCEBERNSTEIN DIVERSIFIED YIELD                                 
Class A                              1.55%* 1.69% 1.65%             
Class B                              2.30%* 2.49% 2.41%             
Class C                              2.26%* 2.39% 2.36%             
Advisor Class                        1.23%* 1.28% 1.33%             
ALLIANCEBERNSTEIN HIGH INCOME                                       
Class A                              1.04%* 1.13% 1.13%             
Class B                              1.78%* 1.88% 1.86%             
Class C                              1.73%* 1.83% 1.84%             
Advisor Class                         .73%*  .83%  .80%             

--------                                                                        
*The ratio includes expenses attributable to costs of proxy solicitation. 

(h)Amount includes contribution from Advisor of less than $ .005.               

(i)Net of fees and expenses waived by the distributor.                          

(j)Commencement of distribution.                                                

(k)Annualized.                                                                  

60                                                                              

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

BOND RATINGS                                                                    
MOODY'S INVESTORS SERVICE, INC.                                                 
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry 
the smallest degree of investment risk and are generally referred to as "gilt   
edge." Interest payments are protected by a large or by an exceptionally stable 
margin and principal is secure. While the various protective elements are       
likely to change, such changes as can be visualized are most unlikely to impair 
the fundamentally strong position of such issues.                               

Aa--Bonds which are rated Aa are judged to be of high quality by all standards. 
Together with the Aaa group they comprise what are generally known as high      
grade bonds. They are rated lower than the best bonds because margins of        
protection may not be as large as in Aaa securities or fluctuation of           
protective elements may be of greater amplitude or there may be other elements  
present which make the long-term risks appear somewhat larger than the Aaa      
securities.                                                                     

A--Bonds which are rated A possess many favorable investment attributes and are 
to be considered as upper-medium-grade obligations. Factors giving security to  
principal and interest are considered adequate but elements may be present      
which suggest a susceptibility to impairment some time in the future.           

Baa--Bonds which are rated Baa are considered as medium-grade obligations,      
i.e., they are neither highly protected nor poorly secured. Interest payments   
and principal security appear adequate for the present but certain protective   
elements may be lacking or may be characteristically unreliable over any great  
length of time. Such bonds lack outstanding investment characteristics and in   
fact have speculative characteristics as well.                                  

Ba--Bonds which are rated Ba are judged to have speculative elements; their     
future cannot be considered as well-assured. Often the protection of interest   
and principal payments may be very moderate and thereby not well safeguarded    
during both good and bad times over the future. Uncertainty of position         
characterizes bonds in this class.                                              

B--Bonds which are rated B generally lack characteristics of the desirable      
investment. Assurance of interest and principal payments or of maintenance of   
other terms of the contract over any long period of time may be small.          

Caa--Bonds which are rated Caa are of poor standing. Such issues may be in      
default or there may be present elements of danger with respect to principal or 
interest.                                                                       

Ca--Bonds which are rated Ca represent obligations which are speculative in a   
high degree. Such issues are often in default or have other marked shortcomings.

C--Bonds which are rated C are the lowest rated class of bonds and issues so    
rated can be regarded as having extremely poor prospects of ever attaining any  
real investment standing.                                                       

Absence of Rating--When no rating has been assigned or where a rating has been  
suspended or withdrawn, it may be for reasons unrelated to the quality of the   
issue.                                                                          

Should no rating be assigned, the reason may be one of the following:           

1. An application for rating was not received or accepted.                      

2. The issue or issuer belongs to a group of securities or companies that are   
unrated as a matter of policy.                                            

3. There is a lack of essential data pertaining to the issue or issuer.         

4. The issue was privately placed, in which case the rating is not published in 
Moody's publications.                                                     

Suspension or withdrawal may occur if new and material circumstances arise, the 
effects of which preclude satisfactory analysis; if there is no longer          
available reasonable up-to-date data to permit a judgment to be formed; if a    
bond is called for redemption; or for other reasons.                            

Note--Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating    
classification from Aa through Caa in its corporate bond rating system. The     
modifier 1 indicates that the security ranks in the higher end of its generic   
rating category; the modifier 2 indicates a mid-range ranking; and the modifier 
3 indicates that the issue ranks in the lower end of its generic rating         
category.                                                                       

STANDARD & POOR'S RATINGS SERVICES                                              
AAA--Debt rated AAA has the highest rating assigned by S&P. Capacity to pay     
interest and repay principal is extremely strong.                               

AA--Debt rated AA has a very strong capacity to pay interest and repay          
principal and differs from the highest rated issues only in small degree.       

A--Debt rated A has a strong capacity to pay interest and repay principal       
although it is somewhat more susceptible to the adverse effects of changes in   
circumstances and economic conditions than debt in higher rated categories.     

BBB--Debt rated BBB normally exhibits adequate protection parameters. However,  
adverse economic conditions or changing circumstances are more likely to lead   
to a weakened capacity to pay interest and repay principal for debt in this     
category than in higher rated categories.                                       

BB, B, CCC, CC, C--Debt rated BB, B, CCC, CC or C is regarded as having         
significant speculative characteristics. BB indicates the lowest degree of      
speculation and C the highest. While such debt will likely have some quality    
and protective characteristics, these are outweighed by large uncertainties or  
major exposures to adverse conditions.                                          

                                                                           A-1

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BB--Debt rated BB is less vulnerable to nonpayment than other speculative debt. 
However, it faces major ongoing uncertainties or exposure to adverse business,  
financial or economic conditions which could lead to an inadequate capacity to  
pay interest and repay principal.                                               

B--Debt rated B is more vulnerable to nonpayment than debt rated BB, but there  
is capacity to pay interest and repay principal. Adverse business, financial or 
economic conditions will likely impair the capacity or willingness to pay       
principal or repay interest.                                                    

CCC--Debt rated CCC is currently vulnerable to nonpayment, and is dependent     
upon favorable business, financial and economic conditions to pay interest and  
repay principal. In the event of adverse business, financial or economic        
conditions, there is not likely to be capacity to pay interest or repay         
principal.                                                                      

CC--Debt rated CC is currently highly vulnerable to nonpayment.                 

C--The C rating may be used to cover a situation where a bankruptcy petition    
has been filed or similar action has been taken, but payments are being         
continued.                                                                      

D--The D rating, unlike other ratings, is not prospective; rather, it is used   
only where a default has actually occurred.                                     

Plus (+) or Minus (-)--The ratings from AA to CCC may be modified by the        
addition of a plus or minus sign to show relative standing within the major     
rating categories.                                                              

NR--Not rated.                                                                  

FITCH RATINGS                                                                   
AAA--Bonds considered to be investment grade and of the highest credit quality. 
The obligor has an exceptionally strong ability to pay interest and repay       
principal, which is unlikely to be affected by reasonably foreseeable events.   

AA--Bonds considered to be investment grade and of very high credit quality.    
The obligor's ability to pay interest and repay principal is very strong,       
although not quite as strong as bonds rated AAA. Because bonds rated in the AAA 
and AA categories are not significantly vulnerable to foreseeable future        
developments, short-term debt of these issuers is generally rated F1+.          

A--Bonds considered to be investment grade and of high credit quality. The      
obligor's ability to pay interest and repay principal is considered to be       
strong, but may be more vulnerable to adverse changes in economic conditions    
and circumstances than bonds with higher ratings.                               

BBB--Bonds considered to be investment grade and of satisfactory credit         
quality. The obligor's ability to pay interest and repay principal is           
considered to be adequate. Adverse changes in economic conditions and           
circumstances, however, are more likely to have adverse impact on these bonds,  
and therefore impair timely payment. The likelihood that the ratings of these   
bonds will fall below investment grade is higher than for bonds with higher     
ratings.                                                                        

BB--Bonds are considered speculative. The obligor's ability to pay interest and 
repay principal may be affected over time by adverse economic changes. However, 
business and financial alternatives can be identified which could assist the    
obligor in satisfying its debt service requirements.                            

B--Bonds are considered highly speculative. While bonds in this class are       
currently meeting debt service requirements, the probability of continued       
timely payment of principal and interest reflects the obligor's limited margin  
of safety and the need for reasonable business and economic activity throughout 
the life of the issue.                                                          

CCC--Bonds have certain identifiable characteristics which, if not remedied,    
may lead to default. The ability to meet obligations requires an advantageous   
business and economic environment.                                              

CC--Bonds are minimally protected. Default in payment of interest and/or        
principal seems probable over time.                                             

C--Bonds are in imminent default in payment of interest or principal.           

DDD, DD, D--Bonds are in default on interest and/or principal payments. Such    
bonds are extremely speculative and should be valued on the basis of their      
ultimate recovery value in liquidation or reorganization of the obligor. DDD    
represents the highest potential for recovery on these bonds, and D represents  
the lowest potential for recovery.                                              

Plus (+) Minus (-)--Plus and minus signs are used with a rating symbol to       
indicate the relative position of a credit within the rating category. Plus and 
minus signs, however, are not used in the AAA category or in categories below B.

NR--Indicates that Fitch does not rate the specific issue.                      

DOMINION BOND RATING SERVICE LIMITED                                            
Each rating category is denoted by the subcategories "high" and "low". The      
absence of either a "high" or "low" designation indicates the rating is in the  
"middle" of the category. The AAA and D categories do not utilize "high",       
"middle", and "low" as differential grades.                                     

AAA--Long-term debt rated AAA is of the highest credit quality, with            
exceptionally strong protection for the timely repayment of principal and       
interest. Earnings are considered stable, the structure of the industry in      
which the entity operates is strong, and the outlook for future profitability   
is favorable. There are few qualifying factors present that would detract from  
the performance of the entity. The strength of liquidity and coverage ratios is 
unquestioned and the entity has established a credible track record of superior 
performance. Given the extremely high standard that Dominion has set for this   
category, few entities are able to achieve a AAA rating.                        

AA--Long-term debt rated AA is of superior credit quality, and protection of    
interest and principal is considered high. In many cases they differ from       
long-term debt rated AAA only to a small degree. Given the extremely            
restrictive definition Dominion has for the AAA category, entities rated AA are 
also                                                                            

A-2                                                                             

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considered to be strong credits, typically exemplifying above-average strength  
in key areas of consideration and unlikely to be significantly affected by      
reasonably foreseeable events.                                                  

A--Long-term debt rated A is of satisfactory credit quality. Protection of      
interest and principal is still substantial, but the degree of strength is less 
than that of AA rated entities. While A is a respectable rating, entities in    
this category are considered to be more susceptible to adverse economic         
conditions and have greater cyclical tendencies than higher-rated securities.   

BBB--Long-term debt rated BBB is of adequate credit quality. Protection of      
interest and principal is considered acceptable, but the entity is fairly       
susceptible to adverse changes in financial and economic conditions, or there   
may be other adverse conditions present which reduce the strength of the entity 
and its rated securities.                                                       

BB--Long-term debt rated BB is defined to be speculative and non-investment     
grade, where the degree of protection afforded interest and principal is        
uncertain, particularly during periods of economic recession. Entities in the   
BB range typically have limited access to capital markets and additional        
liquidity support. In many cases, deficiencies in critical mass,                
diversification, and competitive strength are additional negative               
considerations.                                                                 

B--Long-term debt rated B is considered highly speculative and there is a       
reasonably high level of uncertainty as to the ability of the entity to pay     
interest and principal on a continuing basis in the future, especially in       
periods of economic recession or industry adversity.                            

CCC, CC and C--Long-term debt rated in any of these categories is very highly   
speculative and is in danger of default of interest and principal. The degree   
of adverse elements present is more severe than long-term debt rated B.         
Long-term debt rated below B often have features which, if not remedied, may    
lead to default. In practice, there is little difference between these three    
categories, with CC and C normally used for lower ranking debt of companies for 
which the senior debt is rated in the CCC to B range.                           

D--A security rated D implies the issuer has either not met a scheduled payment 
of interest or principal or that the issuer has made it clear that it will miss 
such a payment in the near future. In some cases, Dominion may not assign a D   
rating under a bankruptcy announcement scenario, as allowances for grace        
periods may exist in the underlying legal documentation. Once assigned, the D   
rating will continue as long as the missed payment continues to be in arrears,  
and until such time as the rating is suspended, discontinued, or reinstated by  
Dominion.                                                                       

                                                                           A-3

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APPENDIX B                                                                      
--------------------------------------------------------------------------------

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

The settlement agreement between the Adviser and the New York State Attorney    
General requires the Funds 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 the Summary Information at the beginning of this       
Prospectus about the effect of a Fund's expenses, including investment advisory 
fees and other Fund costs, on each Fund's returns over a 10-year period. The    
chart shows the estimated expenses that would be charged on a hypothetical      
investment of $10,000 in Class A shares of each Fund assuming a 5% return each  
year, including an initial sales charge of 4.25%. 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    
each Fund is the same as stated under "Financial Highlights." If you wish to    
obtain hypothetical investment information for other classes of shares of each  
Fund, please refer to the "Mutual Fund Fees & Expenses Calculators" on          
www.AllianceBernstein.com. Your actual expenses may be higher or lower.         

ALLIANCEBERNSTEIN SHORT DURATION PORTFOLIO                                      
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT              HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS     EXPENSES    INVESTMENT 
---------------------------------------------------------------------
                                                                     
1       $10,000.00   $  478.75   $10,053.75  $  519.51    $ 9,959.24 
2         9,959.24      497.96    10,457.20      98.30     10,358.90 
3        10,358.90      517.95    10,876.85     102.24     10,774.81 
4        10,774.61      538.73    11,313.34     106.35     11,206.99 
5        11,206.99      560.35    11,767.34     110.61     11,656.73 
6        11,656.73      582.84    12,239.57     115.05     12,124.52 
7        12,124.52      606.23    12,730.75     119.67     12,611.08 
8        12,611.08      630.55    13,241.63     124.47     13,117.16 
9        13,117.16      655.86    13,773.02     129.47     13,643.55 
10       13,643.55      682.18    14,325.73     134.66     14,191.07 
---------------------------------------------------------------------
Total                $5,751.40               $1,560.33               

ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT               HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER     HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS     EXPENSES*    INVESTMENT 
----------------------------------------------------------------------
                                                                      
1       $10,000.00   $  478.75   $10,053.75   $  514.48    $ 9,964.27 
2         9,964.27      498.21    10,462.48      116.13     10,346.35 
3        10,346.35      517.32    10,863.67      120.59     10,743.08 
4        10,743.08      537.15    11,280.23      125.21     11,155.02 
5        11,155.02      557.75    11,712.77      130.01     11,582.76 
6        11,582.76      579.14    12,161.90      135.00     12,026.90 
7        12,026.90      601.35    12,628.25      140.17     12,488.08 
8        12,488.08      624.40    13,112.48      145.55     12,966.93 
9        12,966.93      648.35    13,615.28      151.13     13,464.15 
10       13,464.15      673.21    14,137.36      156.92     13,980.44 
----------------------------------------------------------------------
Total                $5,715.63                $1,735.19               

ALLIANCEBERNSTEIN GLOBAL BOND FUND                                              
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT               HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER     HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS     EXPENSES*    INVESTMENT 
----------------------------------------------------------------------
                                                                      
1       $10,000.00   $  478.75   $10,053.75   $  523.53    $ 9,955.22 
2         9,955.22      497.76    10,452.98      106.62     10,346.36 
3        10,346.36      517.32    10,863.68      110.81     10,752.87 
4        10,752.87      537.64    11,290.51      115.16     11,175.35 
5        11,175.35      558.77    11,734.12      119.69     11,614.43 
6        11,614.43      580.72    12,195.15      124.39     12,070.76 
7        12,070.76      603.54    12,674.30      129.28     12,545.02 
8        12,545.02      627.25    13,172.27      134.36     13,037.91 
9        13,037.91      651.90    13,689.81      139.64     13,550.17 
10       13,550.17      677.51    14,227.68      145.12     14,082.56 
----------------------------------------------------------------------
Total                $5,731.16                $1,648.60               

B-1                                                                             

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ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND                                        
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT               HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER     HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS     EXPENSES*    INVESTMENT 
----------------------------------------------------------------------
                                                                      
1       $10,000.00   $  478.75   $10,053.75   $  515.48    $ 9,963.27 
2         9,963.27      498.16    10,461.43      162.15     10,299.28 
3        10,299.28      514.96    10,814.24      167.62     10,646.62 
4        10,646.62      532.33    11,178.95      173.27     11,005.68 
5        11,005.68      550.28    11,555.96      179.12     11,376.84 
6        11,376.84      568.84    11,945.68      185.16     11,760.52 
7        11,760.52      588.03    12,348.55      191.40     12,157.15 
8        12,157.15      607.86    12,765.01      197.86     12,567.15 
9        12,567.15      628.36    13,195.51      204.53     12,990.98 
10       12,990.98      649.55    13,640.53      211.43     13,429.10 
----------------------------------------------------------------------
Total                $5,617.12                $2,188.02               

ALLIANCEBERNSTEIN HIGH INCOME FUND                                              
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT               HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER     HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS     EXPENSES*    INVESTMENT 
----------------------------------------------------------------------
                                                                      
1       $10,000.00   $  478.75   $10,053.75   $  524.53    $ 9,954.22 
2         9,954.22      497.71    10,451.93      108.70     10,343.23 
3        10,343.23      517.16    10,860.39      112.95     10,747.44 
4        10,747.44      537.37    11,284.81      117.36     11,167.45 
5        11,167.45      558.37    11,725.82      121.95     11,603.87 
6        11,603.87      580.19    12,184.06      126.71     12,057.35 
7        12,057.35      602.87    12,660.22      131.67     12,528.55 
         12,528.55      626.43    13,154.98      136.81     13,018.17 
9        13,018.17      650.91    13,669.08      142.16     13,526.92 
10       13,526.92      676.35    14,203.27      147.71     14,055.56 
----------------------------------------------------------------------
Total                $5,726.11                $1,670.55               

* Expenses are net of any fee waiver or expense waiver for the first year.      
Thereafter, the expense ratio reflects the Fund's operating expenses as     
reflected under "Fees and Expenses of the Fund" before waiver in the Summary
Information at the beginning of this Prospectus.                            

                                                                           B-2

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

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

..  STATEMENT OF ADDITIONAL INFORMATION (SAI)                                   
The Funds have SAIs, which contains more detailed information about the Funds,  
including their operations and investment policies. The Funds' SAIs and the     
independent registered public accounting firms' reports and financial           
statements in each Fund's most recent annual report to shareholders are         
incorporated by reference into (and are legally part of) this Prospectus.       

You may request a free copy of the current annual/semi-annual report or the     
SAIs, or make inquiries concerning the Funds, by contacting your broker or      
other financial intermediary, or by contacting the Adviser:                     

                                                                [Download Table]
                                                               
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 these documents 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 Funds 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 20549-1520.                      

You also may find these documents and more information about the Adviser and    
the Funds on the Internet at: www.AllianceBernstein.com.                        

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

                                                                [Download Table]

FUND               SEC FILE NO.
-------------------------------
                               
Short Duration      811-05555  
Intermediate Bond   811-02383  
Global Bond         811-06554  
Diversified Yield   811-07391  
High Income         811-08188  

                                                                 PRO-0115-0111

 [GRAPHIC]

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BOND FUNDS - RETIREMENT SHARES -- (CLASS A, R, K AND I SHARES)                  

PROSPECTUS  |  JANUARY 31, 2011                                                 

The AllianceBernstein Bond Funds                                                

                                                        [Enlarge/Download Table]
                                                                                                    
Core                                               High Income                                      
(Shares Offered--Exchange Ticker Symbol)           (Shares Offered--Exchange Ticker Symbol)         

    AllianceBernstein Intermediate Bond Portfolio      AllianceBernstein High Income Fund           
    (Class A-ABQUX; Class R-ABQRX; Class K-ABQKX;      (Class A-AGDAX; Class R-AGDRX; Class K-AGDKX;
     Class I-ABQIX)                                     Class I-AGDIX)                              

    AllianceBernstein Global Bond Fund                                                              
    (Class A-ANAGX; Class R-ANARX; Class K-ANAKX;                                                   
     Class I-ANAIX)                                                                                 

Absolute Return                                                                                     
(Shares Offered--Exchange Ticker Symbol)                                                            

    AllianceBernstein Diversified Yield Fund                                                        
    (Class A-AGSAX; Class R-AGSRX; Class K-AGSKX;                                                   
     Class I-AGLIX)                                                                                 

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

[LOGO]                                                                
AB                                                                
ALLIANCEBERNSTEIN                                                               

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INVESTMENT PRODUCTS OFFERED                                                     
..  ARE NOT FDIC INSURED                                                        
..  MAY LOSE VALUE                                                              
..  ARE NOT BANK GUARANTEED                                                     

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TABLE OF CONTENTS                                                               
--------------------------------------------------------------------------------

                                                                [Download Table]

                                                               Page
                                                                   
SUMMARY INFORMATION...........................................   4 
CORE                                                               
  ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO...............   4 
  ALLIANCEBERNSTEIN GLOBAL BOND FUND..........................   8 
ABSOLUTE RETURN                                                    
  ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND....................  12 
HIGH INCOME                                                        
  ALLIANCEBERNSTEIN HIGH INCOME FUND..........................  16 
ADDITIONAL INFORMATION ABOUT THE FUNDS' RISKS AND INVESTMENTS.  21 
INVESTING IN THE FUNDS........................................  30 
  How to Buy Shares...........................................  30 
  The Different Share Class Expenses..........................  30 
  Distribution Arrangements for Group Retirement Plans........  31 
  Payments to Financial Intermediaries........................  31 
  How to Exchange Shares......................................  32 
  How to Sell or Redeem Shares................................  32 
  Frequent Purchases and Redemptions of Fund Shares...........  32 
  How the Funds Value Their Shares............................  34 
MANAGEMENT OF THE FUNDS.......................................  35 
DIVIDENDS, DISTRIBUTIONS AND TAXES............................  39 
GENERAL INFORMATION...........................................  40 
GLOSSARY OF INVESTMENT TERMS..................................  41 
FINANCIAL HIGHLIGHTS..........................................  43 
APPENDIX A--BOND RATINGS...................................... A-1 
APPENDIX B--HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION... B-1 

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SUMMARY INFORMATION                                                             
--------------------------------------------------------------------------------

ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate income and price appreciation    
without assuming what the Adviser considers undue risk.                         

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.                                                             

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                CLASS A  CLASS R CLASS K CLASS I
                                                                                SHARES   SHARES  SHARES  SHARES 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                
(as a percentage of offering price)                                              None     None    None    None  
----------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                            
(as a percentage of offering price or redemption proceeds, whichever is lower)   None(a)  None    None    None  
----------------------------------------------------------------------------------------------------------------
Exchange Fee                                                                     None     None    None    None  

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

                                                        [Enlarge/Download Table]

                                                                                        CLASS A CLASS R CLASS K CLASS I
-----------------------------------------------------------------------------------------------------------------------
                                                                                                                       
Management Fees                                                                           .45%    .45%    .45%    .45% 
Distribution and/or Service (12b-1) Fees                                                  .30%    .50%    .25%   None  
Other Expenses:                                                                                                        
  Transfer Agent                                                                          .17%    .26%    .20%    .11% 
  Interest Expense and Related Expenses                                                   .06%    .03%    .06%    .12% 
  Other Expenses                                                                          .13%    .13%    .13%    .13% 
                                                                                         ----    ----    ----    ----  
Total Other Expenses                                                                      .36%    .42%    .39%    .36% 
                                                                                         ----    ----    ----    ----  
Total Annual Fund Operating Expenses                                                     1.11%   1.37%   1.09%    .81% 
                                                                                         ====    ====    ====    ====  
Fee Waiver and/or Expense Reimbursement (b)                                              (.20)%  (.29)%  (.23)%  (.14)%
                                                                                         ----    ----    ----    ----  
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement (c)    .91%   1.08%    .86%    .67% 
                                                                                         ====    ====    ====    ====  
-----------------------------------------------------------------------------------------------------------------------

(a)In some cases, a 1%, 1-year contingent deferred sales charge, or CDSC, may   
apply for Class A shares.                                                 

(b)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(c)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS R CLASS K CLASS I
-------------------------------
                               
 .85%    1.05%    .80%    .55% 

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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS R CLASS K CLASS I
-----------------------------------------------
                                               
After 1 Year    $   93  $  110  $   88   $ 68  
After 3 Years   $  333  $  405  $  324   $245  
After 5 Years   $  592  $  722  $  579   $436  
After 10 Years  $1,334  $1,621  $1,308   $989  
-----------------------------------------------

4                                                                               

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PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 99% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund invests, under normal circumstances, at least 80% of its net assets in 
fixed-income securities. The Fund expects to invest in readily marketable       
fixed-income securities with a range of maturities from short- to long-term and 
relatively attractive yields that do not involve undue risk of loss of capital. 
The Fund expects to invest in fixed-income securities with a dollar-weighted    
average maturity of between three to ten years and an average duration of three 
to six years. The Fund may invest up to 25% of its net assets in below          
investment grade bonds. The Fund may use leverage for investment purposes.      

The Fund may invest without limit in U.S. Dollar-denominated foreign            
fixed-income securities and may invest up to 25% of its assets in               
non-U.S. Dollar-denominated foreign fixed-income securities. These investments  
may include, in each case, developed and emerging market debt securities.       

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund intends, among other things,  
to enter into transactions such as reverse repurchase agreements and dollar     
rolls. The Fund may invest, without limit, in derivatives, such as options,     
futures, forwards, or swap agreements.                                          

The Fund expects to engage in active and frequent trading of portfolio          
securities to achieve its principal investment strategies. A higher rate of     
portfolio turnover increases transaction expenses, which may negatively affect  
the Fund's performance. High portfolio turnover also may result in the          
realization of substantial net short-term capital gains, which, when            
distributed, are taxable to shareholders.                                       

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

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

                                                                           5

497 73rd "Page" of 133 TOC 1st Previous Next Bottom Just 73rd

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  PREPAYMENT RISK: The value of mortgage-related or 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.                           

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

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

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

[CHART]           

01     02     03     04     05     06     07     08     09     10           
----   ----   ----   ----   ----   ----   ----  -----  -----   ----           
7.36   7.67   3.69   3.48   1.94   3.97   5.68  -8.26  19.18   9.20           

Calendar Year End (%)         

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 7.86% IN THE 3RD QUARTER, 2009; AND WORST QUARTER WAS DOWN  
-4.57% IN THE 3RD QUARTER, 2008.                                                

6                                                                               

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PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                                [Download Table]

                                                      1 YEAR 5 YEARS* 10 YEARS*
-------------------------------------------------------------------------------
                                                                               
Class A                                               8.20%   5.58%     5.19%  
-------------------------------------------------------------------------------
Class R                                               8.99%   5.36%     4.98%  
-------------------------------------------------------------------------------
Class K                                               9.25%   5.61%     5.24%  
-------------------------------------------------------------------------------
Class I                                               9.52%   5.89%     5.51%  
-------------------------------------------------------------------------------
Barclays Capital U.S. Aggregate Index                                          
(reflects no deduction for fees, expenses, or taxes)  6.54%   5.80%     5.84%  
-------------------------------------------------------------------------------

* Inception Dates for Class R shares: 11/03/03, and Class K and Class I shares: 
3/1/05. Performance information for periods prior to the inception of Class 
 R, Class K and Class I shares is the performance of the Fund's Class A shares
adjusted to reflect the higher expense ratio of Class R shares and the lower
expense ratio of Class K and Class I shares, respectively.                  

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

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

                                                                [Download Table]

EMPLOYEE            LENGTH OF SERVICE  TITLE                               
---------------------------------------------------------------------------
                                                                           
Paul J. DeNoon         Since 2009      Senior Vice President of the Adviser

Shawn E. Keegan        Since 2005      Vice President of the Adviser       

Alison M. Martier      Since 2005      Senior Vice President of the Adviser

Douglas J. Peebles     Since 2007      Senior Vice President of the Adviser

Greg J. Wilensky       Since 2005      Senior Vice President of the Adviser

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 20 in this Prospectus.                                     

                                                                           7

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ALLIANCEBERNSTEIN GLOBAL BOND FUND                                              
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate current income consistent with   
preservation of capital.                                                        

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.                                                             

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                CLASS A  CLASS R CLASS K CLASS I
                                                                                SHARES   SHARES  SHARES  SHARES 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                
(as a percentage of offering price)                                              None     None    None    None  
----------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                            
(as a percentage of offering price or redemption proceeds, whichever is lower)   None(a)  None    None    None  
----------------------------------------------------------------------------------------------------------------
Exchange Fee                                                                     None     None    None    None  

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

                                                        [Enlarge/Download Table]
                                                                                                                      
----------------------------------------------------------------------------------------------------------------------
                                                                                       CLASS A CLASS R CLASS K CLASS I
----------------------------------------------------------------------------------------------------------------------
Management Fees                                                                          .50%    .50%    .50%    .50% 
Distribution and/or Service (12b-1) Fees                                                 .30%    .50%    .25%   None  
Other Expenses:                                                                                                       
  Transfer Agent                                                                         .10%    .24%    .20%    .02% 
  Interest Expense and Related Expenses                                                  .08%    .05%    .05%    .06% 
  Other Expenses                                                                         .04%    .06%    .06%    .05% 
                                                                                        ----    ----    ----    ----  
Total Other Expenses                                                                     .22%    .35%    .31%    .13% 
                                                                                        ----    ----    ----    ----  
Total Annual Fund Operating Expenses                                                    1.02%   1.35%   1.06%    .63% 
                                                                                        ====    ====    ====    ====  
Fee Waiver and/or Expense Reimbursement(b)                                              (.04)%  (.20)%  (.16)%  (.00)%
                                                                                        ----    ----    ----    ----  
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(c)    .98%   1.15%    .90%    .63% 
                                                                                        ====    ====    ====    ====  
----------------------------------------------------------------------------------------------------------------------

(a)In some cases, a 1%, 1-year CDSC may apply for Class A shares.               

(b)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(c)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS R CLASS K CLASS I
-------------------------------
                               
 .90%    1.10%   .85%    .57%  

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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS R CLASS K CLASS I
-----------------------------------------------
                                               
After 1 Year    $  100  $  117  $   92   $ 64  
After 3 Years   $  321  $  408  $  321   $202  
After 5 Years   $  559  $  720  $  569   $351  
After 10 Years  $1,244  $1,606  $1,280   $786  
-----------------------------------------------

8                                                                               

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PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 69% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund invests, under normal circumstances, at least 80% of its net assets in 
fixed-income securities. Under normal market conditions, the Fund invests       
significantly in fixed-income securities of non-U.S. companies. In addition,    
the Fund invests, under normal circumstances, in the fixed-income securities of 
companies located in at least three countries. The Fund may invest in a broad   
range of fixed-income securities in both developed and emerging markets. The    
Fund may invest across all fixed-income sectors, including U.S. and non-U.S.    
government and corporate debt securities. The Fund's investments may be         
denominated in local currency or U.S. Dollar-denominated. The Fund may invest   
in debt securities with a range of maturities from short- to long-term. The     
Fund may use borrowings or other leverage for investment purposes.              

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Adviser will actively manage the Fund's assets in relation to market        
conditions and general economic conditions and adjust the Fund's investments in 
an effort to best enable the Fund to achieve its investment objective. Thus,    
the percentage of the Fund's assets invested in a particular country or         
denominated in a particular currency will vary in accordance with the Adviser's 
assessment of the relative yield and appreciation potential of such securities  
and the relationship of the country's currency to the U.S. Dollar.              

Under normal circumstances, the Fund invests at least 75% of its net assets in  
fixed-income securities rated investment grade at the time of investment and    
may invest up to 25% of its net assets in below investment grade fixed-income   
securities.                                                                     

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund intends, among other things,  
to enter into transactions such as reverse repurchase agreements and dollar     
rolls. The Fund may invest, without limit, in derivatives, such as options,     
futures, forwards, or swap agreements.                                          

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

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

                                                                           9

497 77th "Page" of 133 TOC 1st Previous Next Bottom Just 77th

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its net   
asset value, or NAV, may be more volatile because leverage tends to       
exaggerate the effect of changes in interest rates and any increase or    
decrease in the value of the Fund's investments.                          

..  DIVERSIFICATION RISK: The Fund may have more risk because it is             
"non-diversified," meaning that it can invest more of its assets in a     
smaller number of issuers and that adverse changes in the value of one    
security could have a more significant effect on the Fund's NAV.          

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

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

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

[CHART]             

01     02     03     04     05     06     07     08      09     10            
----  -----  -----   ----   ----   ----   ----  ------  -----   ----            
0.31  10.68  15.13   6.87   9.71   6.57   9.90  -10.71  23.96   9.53            

Calendar Year End (%)       

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 11.30% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN 
-5.57% IN THE 4TH QUARTER, 2008.                                                

10                                                                              

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PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                                [Download Table]

                                                       1 YEAR 5 YEARS* 10 YEARS*
--------------------------------------------------------------------------------
                                                                                
Class A                                                 8.53%  7.26%     7.84%  
--------------------------------------------------------------------------------
Class R                                                 9.30%  7.18%     7.49%  
--------------------------------------------------------------------------------
Class K                                                 9.59%  7.33%     7.90%  
--------------------------------------------------------------------------------
Class I                                                10.04%  7.60%     8.18%  
--------------------------------------------------------------------------------
Barclays Capital Global Aggregate Index (U.S. hedged)                           
(reflects no deduction for fees, expenses, or taxes)   -1.33%  3.50%     4.33%  
--------------------------------------------------------------------------------

* Inception dates for Class R, Class K and Class I shares: 11/5/07. Performance 
information for periods prior to the inception of Class R, Class K and Class
I shares is the performance of the Fund's Class A shares adjusted to reflect
the higher expense ratio of Class R shares and the lower expense ratio of   
Class K and Class I shares, respectively.                                   

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

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

                                                                [Download Table]

EMPLOYEE             LENGTH OF SERVICE  TITLE                                
-----------------------------------------------------------------------------
                                                                             
Paul J. DeNoon          Since 2002      Senior Vice President of the Adviser 

Scott DiMaggio          Since 2005      Senior Vice President of the Adviser 

Michael L. Mon          Since 2003      Vice President of the Adviser        

Douglas J. Peebles      Since 1992      Senior Vice President of the Adviser 

Matthew S. Sheridan     Since 2007      Vice President of the Adviser        

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 20 in this Prospectus.                                     

                                                                            11

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ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND                                        
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to generate current income consistent with   
preservation of capital.                                                        

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.                                                             

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                CLASS A  CLASS R CLASS K CLASS I
                                                                                SHARES   SHARES  SHARES  SHARES 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                
(as a percentage of offering price)                                              None     None    None    None  
----------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                            
(as a percentage of offering price or redemption proceeds, whichever is lower)   None(a)  None    None    None  
----------------------------------------------------------------------------------------------------------------
Exchange Fee                                                                     None     None    None    None  

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

                                                        [Enlarge/Download Table]

                                                                                    CLASS A CLASS R CLASS K CLASS I
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
Management Fees                                                                       .50%    .50%    .50%    .50% 
Distribution and/or Service (12b-1) Fees                                              .30%    .50%    .25%    None 
Other Expenses:                                                                                                    
  Transfer Agent                                                                      .12%    .26%    .19%    .05% 
  Other Expenses                                                                      .63%    .62%    .35%    .63% 
                                                                                    ------  ------  ------  ------ 
Total Other Expenses                                                                  .75%    .88%    .54%    .68% 
                                                                                    ------  ------  ------  ------ 
Total Annual Fund Operating Expenses                                                 1.55%   1.88%   1.29%   1.18% 
                                                                                    ======  ======  ======  ====== 
Fee Waiver and/or Expense Reimbursement(b)                                          (.65)%  (.78)%  (.44)%  (.58)% 
                                                                                    ------  ------  ------  ------ 
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement    .90%   1.10%    .85%    .60% 
                                                                                    ======  ======  ======  ====== 
-------------------------------------------------------------------------------------------------------------------

(a)In some cases, a 1%, 1-year CDSC may apply for Class A shares.               

(b)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS R CLASS K CLASS I
-----------------------------------------------
                                               
After 1 Year    $   92  $  112  $   87  $   61 
After 3 Years   $  426  $  515  $  366  $  317 
After 5 Years   $  783  $  944  $  665  $  593 
After 10 Years  $1,790  $2,137  $1,518  $1,380 
-----------------------------------------------

PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 54% of the average value of its portfolio.                    

12                                                                              

497 80th "Page" of 133 TOC 1st Previous Next Bottom Just 80th

PRINCIPAL STRATEGIES                                                            
The Fund employs a dynamic risk allocation, meaning that the Fund's risk        
profile may vary significantly over time based upon market conditions. The Fund 
invests in a portfolio of fixed-income securities of U.S. and non-U.S.          
companies, U.S. and non-U.S. government entities and supranational entities,    
including lower-rated securities. The Fund limits its investments in the        
securities of any one non-U.S. government to 25% of its total assets. The Fund  
may invest in debt securities with a range of maturities from short- to         
long-term.                                                                      

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund typically maintains at least 50% of its net assets in investment grade 
securities. The Fund may invest up to 50% of its net assets in below investment 
grade securities, such as corporate high yield fixed-income securities,         
sovereign debt obligations and fixed-income securities of issuers located in    
emerging markets.                                                               

The Fund may also invest in mortgage-related and other asset-backed securities, 
loan participations, inflation-protected securities, structured securities,     
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund may make short sales of       
securities or currencies or maintain a short position. The Fund may use         
borrowings or other leverage for investment purposes. The Fund intends, among   
other things, to enter into transactions such as reverse repurchase agreements  
and dollar rolls. The Fund may invest, without limit, in derivatives, such as   
options, futures, forwards, or swap agreements.                                 

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

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its NAV   
may be more volatile because leverage tends to exaggerate the effect of   
changes in interest rates and any increase or decrease in the value of the
Fund's investments.                                                       

..  PREPAYMENT RISK: The value of mortgage-related or 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

                                                                            13

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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.                                                                  

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

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

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

[CHART]         

01     02     03     04     05     06     07     08      09     10          
-----   ----  -----   ----   ----   ----   ----  ------  -----   ----           
-2.81   5.04  15.61   6.13   4.81   4.46   6.38  -16.52  19.20   7.38           

Calendar Year End (%)       

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 8.57% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN  
-9.62% IN THE 4TH QUARTER, 2008.                                                

PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                    1 YEAR 5 YEARS* 10 YEARS*
---------------------------------------------------------------------------------------------
                                                                                             
Class A                                                             6.38%   3.49%     4.54%  
---------------------------------------------------------------------------------------------
Class R                                                             7.28%   3.27%     4.31%  
---------------------------------------------------------------------------------------------
Class K                                                             7.63%   3.59%     4.61%  
---------------------------------------------------------------------------------------------
Class I                                                             7.76%   3.83%     4.86%  
---------------------------------------------------------------------------------------------
Barclays Capital Global Aggregate Index                                                      
(U.S. hedged) (reflects no deduction for fees, expenses, or taxes)  4.61%   4.85%     5.20%  
---------------------------------------------------------------------------------------------
BofA Merrill Lynch 3-Month T-Bill Index                             0.13%   2.43%     2.38%  
---------------------------------------------------------------------------------------------

* Inception Dates for Class R, Class K and Class I shares: 3/1/05. Performance  
information for periods prior to the inception of Class R, Class K and Class
I shares is the performance of the Fund's Class A shares adjusted to reflect
the higher expense ratio of Class R shares and the lower expense ratio of   
Class K and Class I shares, respectively.                                   

14                                                                              

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

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

                                                                [Download Table]

EMPLOYEE             LENGTH OF SERVICE  TITLE                                
-----------------------------------------------------------------------------
                                                                             
Paul J. DeNoon          Since 2005      Senior Vice President of the Adviser 

Joran Laird             Since 2009      Vice President of the Adviser        

Douglas J. Peebles      Since 1996      Senior Vice President of the Adviser 

Matthew S. Sheridan     Since 2006      Vice President of the Adviser        

Greg J. Wilensky        Since 2008      Senior Vice President of the Adviser 

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 20 in this Prospectus.                                     

                                                                            15

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ALLIANCEBERNSTEIN HIGH INCOME FUND                                              
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE                                                            
The Fund's investment objective is to seek to maximize total returns from price 
appreciation 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.                                                             

SHAREHOLDER FEES (fees paid directly from your investment)                      

                                                        [Enlarge/Download Table]

                                                                                CLASS A  CLASS R CLASS K CLASS I
                                                                                SHARES   SHARES  SHARES  SHARES 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
Maximum Sales Charge (Load) Imposed on Purchases                                                                
(as a percentage of offering price)                                              None     None    None    None  
----------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)                                                                            
(as a percentage of offering price or redemption proceeds, whichever is lower)   None(a)  None    None    None  
----------------------------------------------------------------------------------------------------------------
Exchange Fee                                                                     None     None    None    None  

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

                                                        [Enlarge/Download Table]

                                                                                       CLASS A CLASS R CLASS K CLASS I
                                                                                                                      
----------------------------------------------------------------------------------------------------------------------
Management Fees                                                                          .50%    .50%    .50%    .50% 
Distribution and/or Service (12b-1) Fees                                                 .30%    .50%    .25%   None  
Other Expenses:                                                                                                       
  Transfer Agent                                                                         .12%    .25%    .20%    .12% 
  Interest Expense and Related Expenses                                                  .04%    .03%    .05%    .02% 
Other Expenses                                                                           .08%    .09%    .08%    .08% 
                                                                                        ----    ----    ----    ----  
Total Other Expenses                                                                     .24%    .37%    .33%    .22% 
                                                                                        ----    ----    ----    ----  
Total Annual Fund Operating Expenses                                                    1.04%   1.37%   1.08%    .72% 
                                                                                        ====    ====    ====    ====  
  Fee Waiver and/or Expense Reimbursement(a)                                            (.05)%  (.19)%  (.13)%  (.05)%
                                                                                        ----    ----    ----    ----  
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement(b)    .99%   1.18%    .95%    .67% 
                                                                                        ====    ====    ====    ====  
----------------------------------------------------------------------------------------------------------------------

(a)In some cases, a 1%, 1-year CDSC may apply for Class A shares.               

(b)The fee waiver and/or expense reimbursements will remain in effect until     
January 31, 2012 and will continue thereafter from year-to-year unless the
Adviser provides notice of termination 60 days prior to the end of the    
Fund's fiscal year.                                                       

(c)If interest expenses were excluded, net expenses would be as follows:        

                                                                [Download Table]

CLASS A CLASS R CLASS K CLASS I
-------------------------------
                               
 .95%    1.15%   .90%    .65%  

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 is in effect for only the first year. Although 
your actual costs may be higher or lower, based on these assumptions your costs 
would be:                                                                       

                                                                [Download Table]

                CLASS A CLASS R CLASS K CLASS I
-----------------------------------------------
                                               
After 1 Year    $  101  $  120  $   97   $ 68  
After 3 Years   $  326  $  416  $  331   $225  
After 5 Years   $  569  $  733  $  583   $396  
After 10 Years  $1,267  $1,632  $1,307   $890  
-----------------------------------------------

16                                                                              

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PORTFOLIO TURNOVER                                                              
The Fund will pay transaction costs, such as commissions, when it buys or sells 
securities (or "turns over" its portfolio). A higher portfolio turnover 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. During the most recent fiscal year, the Fund's portfolio    
turnover rate was 26% of the average value of its portfolio.                    

PRINCIPAL STRATEGIES                                                            
The Fund pursues income opportunities from government, corporate, emerging      
market and high yield sources. It has the flexibility to invest in a broad      
range of fixed-income securities in both developed and emerging market          
countries. The Fund's investments may include U.S. and non-U.S. corporate debt  
securities and sovereign debt securities. The Fund may invest, without          
limitation, in either U.S. Dollar-denominated or non-U.S. Dollar-denominated    
fixed-income securities.                                                        

The Adviser selects securities for purchase or sale based on its assessment of  
the securities' risk and return characteristics as well as the securities'      
impact on the overall risk and return characteristics of the Fund. In making    
this assessment, the Adviser takes into account various factors including the   
credit quality and sensitivity to interest rates of the securities under        
consideration and of the Fund's other holdings.                                 

The Fund may invest in debt securities with a range of maturities from short-   
to long-term. Substantially all of the Fund's assets may be invested in         
lower-rated securities, which may include securities having the lowest rating   
for non-subordinated debt instruments (i.e., rated C by Moody's or CCC+ or      
lower by S&P and Fitch) and unrated securities of equivalent investment         
quality. The Fund also may invest in investment grade securities and unrated    
securities.                                                                     

The Fund may also make short sales of securities or maintain a short position.  
The Fund is non-diversified, meaning it may invest more of its assets in a      
fewer number of issuers.                                                        

The Fund may invest in mortgage-related and other asset-backed securities, loan 
participations, inflation-protected securities, structured securities,          
variable, floating, and inverse floating rate instruments and preferred stock,  
and may use other investment techniques. The Fund may use borrowings or other   
leverage for investment purposes. The Fund intends, among other things, to      
enter into transactions such as reverse repurchase agreements and dollar rolls. 
The Fund may invest, without limit, in derivatives, such as options, futures,   
forwards, or swap agreements.                                                   

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

..  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.                                                             

..  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: Investments in fixed-income securities   
with lower ratings (commonly known as "junk bonds") tend to have a 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 corporate developments, interest rate         
  sensitivity, negative perceptions of the junk bond market generally and less
secondary market liquidity.                                               

..  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 if the Fund invests a significant portion of its assets in        
fixed-income securities with longer maturities.                           

..  FOREIGN (NON-U.S.) RISK: Investments in securities of non-U.S. issuers may  
  involve more risk than those of U.S. issuers. These securities may fluctuate
  more widely in price and may be less liquid due to adverse market, economic,
political, regulatory or other factors.                                   

..  EMERGING MARKET RISK: Investments in emerging market countries may have more
  risk because the markets are less developed and less liquid as well as being
  subject to increased economic, political, regulatory or other uncertainties.

                                                                            17

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..  CURRENCY RISK: Fluctuations in currency exchange rates may negatively affect
the value of the Fund's investments or reduce its returns.                

..  LEVERAGE RISK: To the extent the Fund uses leveraging techniques, its NAV   
may be more volatile because leverage tends to exaggerate the effect of   
changes in interest rates and any increase or decrease in the value of the
Fund's investments.                                                       

..  DIVERSIFICATION RISK: The Fund may have more risk because it is             
"non-diversified," meaning that it can invest more of its assets in a     
smaller number of issuers and that adverse changes in the value of one    
security could have a more significant effect on the Fund's NAV.          

..  DERIVATIVES RISK: Investments in 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.           

BAR CHART AND PERFORMANCE INFORMATION                                           
The bar chart and performance information provide an indication of the          
historical risk of an investment in the Fund by showing:                        

..  how the Fund's performance changed from year to year over ten years; and    

..  how the Fund's average annual returns for one, five and ten years compare to
those of a broad-based securities market index.                           

You may obtain updated performance information on the Fund's website at         
www.AllianceBernstein.com (click on "Pricing & Performance").                   

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

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

[CHART]             

01     02     03     04     05     06     07     08      09      10           
----  -----  -----  -----  -----  -----   ----  ------  -----   -----           
6.10  18.70  38.42  11.09  10.16  11.85   7.29  -26.52  61.74   16.80           

Calendar Year End (%)           

During the period shown in the bar chart, the Fund's:                           

BEST QUARTER WAS UP 23.96% IN THE 2ND QUARTER, 2009; AND WORST QUARTER WAS DOWN 
-17.75% IN THE 4TH QUARTER, 2008.                                               

18                                                                              

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PERFORMANCE TABLE                                                               
AVERAGE ANNUAL TOTAL RETURNS                                                    
(For the periods ended December 31, 2010)                                       

                                                        [Enlarge/Download Table]

                                                                                         1 YEAR 5 YEARS* 10 YEARS*
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
Class A                                                                                  15.80%  10.75%   13.52%  
------------------------------------------------------------------------------------------------------------------
Class R                                                                                  16.58%  10.54%   13.30%  
------------------------------------------------------------------------------------------------------------------
Class K                                                                                  16.89%  10.82%   13.59%  
------------------------------------------------------------------------------------------------------------------
Class I                                                                                  17.31%  11.11%   13.87%  
------------------------------------------------------------------------------------------------------------------
JPMorgan Emerging Markets Bond Index Global ("EMBI Global") (U.S. Dollar-denominated)    12.04%   8.36%   10.29%  
------------------------------------------------------------------------------------------------------------------
JPMorgan Government Bond Index Emerging Markets ("GBI-EM") (local currency-denominated)                           
(reflects no deduction for fees, expenses, or taxes)                                     13.08%   9.82%      N/A  
------------------------------------------------------------------------------------------------------------------
Barclays Capital High Yield Index (2% Constrained) ("BC High Yield")                                              
(reflects no deduction for fees, expenses, or taxes)                                     14.94%   8.91%    9.01%  
------------------------------------------------------------------------------------------------------------------
Composite Benchmark                                                                                               
(equal weighted blend of EMBI Global, GBI-EM and BC High Yield)                          13.43%   9.19%      N/A  
------------------------------------------------------------------------------------------------------------------

* Inception date for Class R, Class K and Class I shares: 1/28/08. Performance  
information for periods prior to the inception of Class R, Class K and Class
I shares is the performance of the Class A shares adjusted to reflect the   
 higher expense ratio of Class R shares and the lower expense ratio of Class K
and Class I shares, respectively.                                           

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

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

                                                                [Download Table]

EMPLOYEE               LENGTH OF SERVICE  TITLE                                
-------------------------------------------------------------------------------
                                                                               
Paul J. DeNoon            Since 2002      Senior Vice President of the Adviser 

Gershon M. Distenfeld     Since 2008      Senior Vice President of the Adviser 

Douglas J. Peebles        Since 2002      Senior Vice President of the Adviser 

Marco Santamaria          Since 2010      Vice President of the Adviser        

Matthew S. Sheridan       Since 2005      Vice President of the Adviser        

ADDITIONAL INFORMATION                                                          
For important information about the purchase and sale of Fund shares, tax       
information and financial intermediary compensation, please turn to ADDITIONAL  
INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL         
INTERMEDIARIES, page 20 in this Prospectus.                                     

                                                                            19

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ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF FUND SHARES, TAXES AND        
FINANCIAL INTERMEDIARIES                                                        

.   PURCHASE AND SALE OF FUND SHARES                                  

PURCHASE MINIMUMS                                                               
Class A, Class R, Class K and Class I shares are available at NAV, without an   
initial sales charge, to 401(k) plans, 457 plans, employer-sponsored 403(b)     
plans, profit-sharing and money purchase pension plans, defined benefit plans,  
and non-qualified deferred compensation plans where plan level or omnibus       
accounts are held on the books of a Fund.                                       

You may sell (redeem) your shares each day the New York Stock Exchange is open. 
You may sell your shares through your financial intermediary.                   

.   TAX INFORMATION                                                   

Each Fund may make income dividends or 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 FINANCIAL INTERMEDIARIES                              

Financial intermediaries market and sell shares of the Funds. A 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 financial intermediary to recommend the Fund over another       
investment.                                                                     

20                                                                              

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ADDITIONAL INFORMATION ABOUT THE FUNDS' RISKS AND INVESTMENTS                   
--------------------------------------------------------------------------------

This section of the Prospectus provides additional information about the Funds' 
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 a Fund's investment practices and      
additional information about each Fund's risks and investments can be found in  
the Funds' SAI.                                                                 

DERIVATIVES                                                                     
Each Fund may, but is not required to, use derivatives for 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. A Fund may use derivatives to earn   
income and enhance returns, to hedge or adjust the risk profile of its          
portfolio, to replace more traditional direct investments and to obtain         
exposure to otherwise inaccessible markets.                                     

There are four principal types of derivatives, including options, futures,      
forwards and swaps, which are described below. Derivatives may be               
(i) standardized, exchange-traded contracts or (ii) customized, privately       
negotiated contracts. Exchange-traded derivatives tend to be more liquid and    
subject to less credit risk than those that are privately negotiated.           

A 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 Funds' 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 is either settled by physical delivery of 
  the commodity or tangible asset to an agreed-upon location at a future date,
rolled forward into a new forward contract or, in the case of a           
non-deliverable forward, by a cash payment at maturity. The Funds'        
investments in forward contracts may include the following:               

- Forward Currency Exchange Contracts. A Fund may purchase or sell forward    
currency exchange contracts for hedging purposes to minimize the risk from
adverse changes in the relationship between the U.S. Dollar and other     
currencies or for non-hedging purposes as a means of making direct        
investments in foreign currencies, as described below under "Other        
  Derivatives and Strategies--Currency Transactions." A Fund, for example, may
enter into a forward contract as a transaction hedge (to "lock in" the    
U.S. Dollar price of a non-U.S. Dollar security), as a position hedge (to 
protect the value of securities the Fund owns that are denominated in a   
foreign currency against substantial changes in the value of the foreign  
currency) or as a cross-hedge (to protect the value of securities the Fund
 owns that are denominated in a foreign currency against substantial changes
in the value of that foreign currency by entering into a forward contract 
for a different foreign currency that is expected to change in the same   
direction as the currency in which the securities are denominated).       

..  FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS--A futures contract is an
  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. A Fund may purchase or
sell futures contracts and options thereon to hedge against changes in    
  interest rates, securities (through index futures or options) or currencies.
  A Fund may also purchase or sell futures contracts for foreign currencies or
options thereon for non-hedging purposes as a means of making direct      
investments in foreign currencies, as described below under "Other        
Derivatives and Strategies--Currency Transactions."                       

..  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. A 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 a Fund were permitted to expire without being sold or        
exercised, its premium would represent a loss to the Fund. The Funds'     
investments in options include the following:                             

- Options on Foreign Currencies. A Fund may invest in options on foreign      
currencies that are privately negotiated or traded on U.S. or foreign     
exchanges for hedging purposes to protect against declines in the         
 U.S. Dollar value of foreign currency denominated securities held by a Fund

                                                                            21

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 and against increases in the U.S. Dollar cost of securities to be acquired.
 The purchase of an option on a foreign currency may constitute an effective
hedge against fluctuations in exchange rates, although if rates move      
 adversely, a Fund may forfeit the entire amount of the premium plus related
transaction costs. A Fund may also invest in options on foreign currencies
 for non-hedging purposes as a means of making direct investments in foreign
currencies, as described below under "Other Derivatives and               
Strategies--Currency Transactions."                                       

- Options on Securities. A Fund may purchase or write a put or call option on 
 securities. A Fund may write covered options, which means writing an option
for securities the Fund owns, and uncovered options.                      

- 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   
 (interest rates in the case of interest rate swaps, currency exchange rates
  in the case of currency swaps) for a specified amount of an underlying asset
(the "notional" principal amount). Swaps are entered into on a net basis  
(i.e., the two payment streams are netted out, with a Fund receiving or   
  paying, as the case may be, only the net amount of the two payments). Except
for currency swaps, the notional principal amount is used solely to       
calculate the payment stream, but is not exchanged. The Funds' investments
in swap transactions include the following:                               

- Interest Rate Swaps, Swaptions, Caps and Floors. Interest rate swaps involve
the exchange by a 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 a Fund. The value of these transactions will fluctuate based
on changes in interest rates.                                             

Interest rate swap, swaption, cap and floor transactions may be used to   
preserve a return or spread on a particular investment or a portion of a  
Fund's portfolio or to protect against an increase in the price of        
securities a Fund anticipates purchasing at a later date.                 

- 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 a 
Fund against an unexpected change in the rate of inflation measured by an 
 inflation index since the value of these agreements is expected to increase
if unexpected inflation increases.                                        

- Credit Default Swap Agreements. The "buyer" in a credit default swap        
  contract is obligated to pay the "seller" a periodic stream of payments over
the term of the contract in return for a contingent payment upon the      
occurrence of a credit event with respect to an underlying reference      
obligation. Generally, a credit event means bankruptcy, failure to pay,   
 obligation acceleration or modified restructuring. A Fund may be either the
  buyer or seller in the transaction. If a Fund is a seller, the Fund receives
 a fixed rate of income throughout the term of the contract, which typically
is between one month and five years, provided that no credit event occurs.
If a credit event occurs, a Fund typically must pay the contingent payment
to the buyer, which is typically the "par value" (full notional value) of 
  the reference obligation. The contingent payment may be a cash settlement or
by physical delivery of the reference obligation in return for payment of 
the face amount of the obligation. The value of the reference obligation  
received by a Fund coupled with the periodic payments previously received 
 may be less than the full notional value it pays to the buyer, resulting in
a loss of value to the Fund. If the reference obligation is a defaulted   
security, physical delivery of the security will cause a Fund to hold a   
defaulted security. If a Fund is a buyer and no credit event occurs, the  
Fund will lose its periodic                                               

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  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 a Fund had invested
in the reference obligation directly. Credit default swaps are subject to 
general market risk, liquidity risk and credit risk.                      

- Currency Swaps. A Fund may invest in currency swaps for hedging purposes to 
protect against adverse changes in exchange rates between the U.S. Dollar 
  and other currencies or for non-hedging purposes as a means of making direct
investments in foreign currencies, as described below under "Other        
Derivatives and Strategies--Currency Transactions." Currency swaps involve
the individually negotiated exchange by a Fund with another party of a    
series of payments in specified currencies. Actual principal amounts of   
currencies may be exchanged by the counterparties at the initiation, and  
again upon the termination, of the transaction. Therefore, the entire     
principal value of a currency swap is subject to the risk that the swap   
 counterparty will default on its contractual delivery obligations. If there
is a default by the counterparty to the transaction, the Fund will have   
contractual remedies under the transaction agreements.                    

- Total Return Swaps. A Fund may enter into total return swaps, under which   
one party agrees to pay the other the total return of a defined underlying
asset, such as a security or basket of securities, or non-asset reference,
such as a securities index, during the specified period in return for     
periodic payments based on a fixed or variable interest rate or the total 
return from different underlying assets or references. Total return swaps 
  could result in losses if the underlying asset or reference does not perform
as anticipated.                                                           

..  OTHER DERIVATIVES AND STRATEGIES--                                          

- Eurodollar Instruments. Eurodollar instruments are essentially              
 U.S. Dollar-denominated futures contracts or options that are linked to the
London Interbank Offered Rate (LIBOR). Eurodollar futures contracts enable
purchasers to obtain a fixed rate for the lending of funds and sellers to 
obtain a fixed rate for borrowings.                                       

- Structured Instruments. As part of its investment program and to maintain   
  greater flexibility, a Fund may invest in structured instruments. Structured
instruments, including indexed or structured securities, combine the      
elements of futures contracts or options with those of debt, preferred    
equity or a depositary instrument. Generally, a structured instrument will
be a debt security, preferred stock, depositary share, trust certificate, 
 certificate of deposit or other evidence of indebtedness on which a portion
of or all interest payments, and/or the principal or stated amount payable
  at maturity, redemption or retirement, is determined by reference to prices,
  changes in prices, or differences between prices, of securities, currencies,
intangibles, goods, articles or commodities (collectively "Underlying     
Assets") or by another objective index, economic factor or other measure, 
such as interest rates, currency exchange rates, commodity indices, and   
securities indices (collectively, "Benchmarks"). Thus, structured         
  instruments may take a variety of forms, including, but not limited to, debt
instruments with interest or principal payments or redemption terms       
determined by reference to the value of a currency or commodity or        
securities index at a future point in time, preferred stock with dividend 
rates determined by reference to the value of a currency, or convertible  
securities with the conversion terms related to a particular commodity.   

Structured instruments are potentially more volatile and carry greater    
market risks than traditional debt instruments. Depending on the structure
of the particular structured instrument, changes in a Benchmark may be    
magnified by the terms of the structured instrument and have an even more 
  dramatic and substantial effect upon the value of the structured instrument.
Also, the prices of the structured instrument and the Benchmark or        
Underlying Asset may not move in the same direction or at the same time.  

Structured instruments can have volatile prices and limited liquidity, and
  their use by a Fund may not be successful. The risk of these investments can
be substantial; possibly all of the principal is at risk. No Fund will    
invest more than 20% of its total assets in these investments.            

- Currency Transactions. A Fund may invest in non-U.S. Dollar-denominated     
  securities on a currency hedged or un-hedged basis. The Adviser may actively
 manage a Fund's currency exposures and may seek investment opportunities by
taking long or short positions in currencies through the use of           
  currency-related derivatives, including forward currency exchange contracts,
futures and options on futures, swaps and options. The Adviser may enter  
into transactions for investment opportunities when it anticipates that a 
foreign currency will appreciate or depreciate in value but securities    
denominated in that currency are not held by a Fund and do not present    
  attractive investment opportunities. Such transactions may also be used when
 the Adviser believes that it may be more efficient than a direct investment
  in a foreign currency-denominated security. A Fund may also conduct currency
exchange contracts on a spot basis (i.e., for cash at the spot rate       
   prevailing in the currency exchange market for buying or selling currencies).

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

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A Fund may invest significantly in TBA-mortgage-backed securities. A TBA or "To 
Be Announced" trade represents a contract for the purchase or sale of           
mortgage-backed securities to be delivered at a future agreed-upon date;        
however, the specific mortgage pool numbers or the number of pools that will be 
delivered to fulfill the trade obligation or terms of the contract are unknown  
at the time of the trade. Mortgage pools (including fixed rate or variable rate 
mortgages) guaranteed by the Government National Mortgage Association, or GNMA, 
the Federal National Mortgage Association, or FNMA, or the Federal Home Loan    
Mortgage Corporation, or FHLMC, are subsequently allocated to the TBA           
transactions.                                                                   

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 a Fund to protect against anticipated changes in interest     
rates and prices.                                                               

ILLIQUID SECURITIES                                                             
Under current Securities and Exchange Commission ("Commission") guidelines, the 
Funds limit their investments in illiquid securities to 15% of their 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 a Fund has valued the securities. A Fund that invests  
in illiquid securities 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 (the "Securities Act") or certain commercial paper)  
may be treated as liquid, although they may be less liquid than registered      
securities traded on established secondary markets.                             

INDEXED COMMERCIAL PAPER                                                        
Indexed commercial paper may have its principal linked to changes in foreign    
currency exchange rates whereby its principal amount is adjusted upwards or     
downwards (but not below zero) at maturity to reflect changes in the referenced 
exchange rate. A Fund will receive interest and principal payments on such      
commercial paper in the currency in which such commercial paper is denominated, 
but the amount of principal payable by the issuer at maturity will change in    
proportion to the change (if any) in the exchange rate between the two          
specified currencies between the date the instrument is issued and the date the 
instrument matures. While such commercial paper entails the risk of loss of     
principal, the potential for realizing gains as a result of changes in foreign  
currency exchange rates enables a Fund to hedge (or cross-hedge) against a      
decline in the U.S. Dollar value of investments denominated in foreign          
currencies while providing an attractive money market rate of return. A Fund    
will purchase such commercial paper for hedging purposes only, not for          
speculation.                                                                    

INFLATION-PROTECTED SECURITIES                                                  
Inflation-protected securities, or IPS, are fixed-income securities whose       
principal value is periodically adjusted according to the rate of inflation. If 
the index measuring inflation falls, the principal value of these securities    
will be adjusted downward, and consequently the interest payable on these       
securities (calculated with respect to a smaller principal amount) will be      
reduced.                                                                        

The value of inflation-protected securities tends to react to changes in real   
interest rates. In general, the price of an inflation-protected security can    
fall when real interest rates rise, and can rise when real interest rates fall. 
In addition, the value of inflation-protected securities can fluctuate based on 
fluctuations in expectations of inflation. Interest payments on                 
inflation-protected securities can be unpredictable and will vary as the        
principal and/or interest is adjusted for inflation.                            

INVESTMENT IN OTHER INVESTMENT COMPANIES                                        
The Funds may invest in other investment companies as permitted by the          
Investment Company Act of 1940 (the "1940 Act") or the rules and regulations    
thereunder. The Funds intend to invest uninvested cash balances in an           
affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. If 
a Fund acquires shares in 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. A  
Fund may also invest in exchange-traded funds, subject to the restrictions and  
limitations of the 1940 Act or any applicable rules, exemptive orders or        
regulatory guidance.                                                            

LOAN PARTICIPATIONS                                                             
A Fund may invest in corporate loans either by participating as co-lender at    
the time the loan is originated or by buying an interest in the loan in the     
secondary market from a financial institution or institutional investor. The    
financial status of an institution interposed between a Fund and a borrower may 
affect the ability of the Fund to receive principal and interest payments.      

The success of a Fund may depend on the skill with which an agent bank          
administers the terms of the corporate loan agreements, monitors borrower       
compliance with covenants, collects principal, interest and fee payments from   
borrowers and, where necessary, enforces creditor remedies against borrowers.   
Agent banks typically have broad discretion in enforcing loan agreements.       

MORTGAGE-RELATED AND OTHER ASSET-BACKED SECURITIES                              
A 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                           

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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.                                                          

The value of mortgage-related or 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 a 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, a 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 a Fund's yield to      
maturity from these securities.                                                 

A 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 Funds may invest in other asset-backed   
securities that have been offered to investors.                                 

A 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.                                                    

PREFERRED STOCK                                                                 
A 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 issuer. These investments include convertible preferred stock, which        
includes an option for the holder to convert the preferred stock into the       
issuer's common stock under certain conditions, among which may be the          
specification of a future date when the conversion may begin, a certain number  
of common shares per preferred shares, or a certain price per share for the     
common stock. Convertible preferred stock tends to be more volatile than        
non-convertible preferred stock, because its value is related to the price of   
the issuer's common stock as well as the dividends payable on the preferred     
stock.                                                                          

REPURCHASE AGREEMENTS AND BUY/SELL BACK TRANSACTIONS                            
A Fund may enter into repurchase agreements in which a 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 a 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, a   
Fund would suffer a loss to the extent that the proceeds from the sale of the   
security were less than the repurchase price.                                   

A Fund may enter into buy/sell back transactions, which are similar to          
repurchase agreements. In this type of transaction, a 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.                       

REVERSE REPURCHASE AGREEMENTS, DOLLAR ROLLS AND OTHER BORROWINGS                
A Fund may enter into reverse repurchase agreements and dollar rolls, subject   
to the Fund's limitations on borrowings. A reverse repurchase agreement or      
dollar roll involves the sale of a security by a Fund and its agreement to      
repurchase the instrument at a specified time and price, and may be considered  
a form of borrowing for some purposes. Reverse repurchase agreements, dollar    
rolls and other forms of borrowings may create leverage risk for a Fund. In     
addition, reverse repurchase agreements and dollar rolls involve the risk that  
the market value of the securities a Fund is obligated to repurchase may        
decline below the purchase price.                                               

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

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Reverse repurchase agreements and dollar rolls involve the risk that the market 
value of the securities a Fund is obligated to repurchase under the agreement   
may decline below the repurchase price. In the event the buyer of securities    
under a reverse repurchase agreement or dollar roll files for bankruptcy or     
becomes insolvent, a Fund's use of the proceeds of the agreement may be         
restricted pending a determination by the other party, or its trustee or        
receiver, whether to enforce the Fund's obligation to repurchase the securities.

RIGHTS AND WARRANTS                                                             
Rights and warrants are option securities permitting their holders to subscribe 
for other securities. Rights are similar to warrants except that they have a    
substantially shorter duration. Rights and warrants do not carry with them      
dividend or voting rights with respect to the underlying securities, or any     
rights in the assets of the issuer. As a result, an investment in rights and    
warrants may be considered more speculative than certain other types of         
investments. In addition, the value of a right or a warrant does not            
necessarily change with the value of the underlying securities, and a right or  
a warrant ceases to have value if it is not exercised prior to its expiration   
date.                                                                           

SHORT SALES                                                                     
A Fund may make short sales as a part of overall portfolio management or to     
offset a potential decline in the value of a security. A short sale involves    
the sale of a security that a Fund does not own, or if the Fund owns the        
security, is not to be delivered upon consummation of the sale. When the Fund   
makes a short sale of a security that it does not own, it must borrow from a    
broker-dealer the security sold short and deliver the security to the           
broker-dealer upon conclusion of the short sale.                                

If the price of the security sold short increases between the time of the short 
sale and the time a Fund replaces the borrowed security, the Fund will incur a  
loss; conversely, if the price declines, the Fund will realize a gain. The      
potential for the price of a fixed-income security sold short to rise is a      
function of both the remaining maturity of the obligation, its creditworthiness 
and its yield. Unlike short sales of equities or other instruments, potential   
for the price of a fixed-income security to rise may be limited due to the fact 
that the security will be no more than par at maturity. However, the short sale 
of other instruments or securities generally, including fixed-income securities 
convertible into equities or other instruments, a fixed-income security trading 
at a deep discount from par or that pays a coupon that is high in relative      
and/or absolute terms, or that is denominated in a currency other than the      
U.S. Dollar, involves the possibility of a theoretically unlimited loss since   
there is a theoretically unlimited potential for the market price of the        
security sold short to increase.                                                

STANDBY COMMITMENT AGREEMENTS                                                   
Standby commitment agreements are similar to put options that commit a Fund,    
for a stated period of time, to purchase a stated amount of a security that may 
be issued and sold to the Fund at the option of the issuer. The price and       
coupon of the security are fixed at the time of the commitment. At the time of  
entering into the agreement, the Fund is paid a commitment fee, regardless of   
whether the security ultimately is issued. The Funds will enter into such       
agreements only for the purpose of investing in the security underlying the     
commitment at a yield and price considered advantageous to the Fund and         
unavailable on a firm commitment basis.                                         

There is no guarantee that a security subject to a standby commitment will be   
issued. In addition, the value of the security, if issued, on the delivery date 
may be more or less than its purchase price. Since the issuance of the security 
is at the option of the issuer, a Fund will bear the risk of capital loss in    
the event the value of the security declines and may not benefit from an        
appreciation in the value of the security during the commitment period if the   
issuer decides not to issue and sell the security to the Fund.                  

STRUCTURED SECURITIES AND BASKET SECURITIES                                     
A Fund may 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. A       
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 a 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.

SOVEREIGN DEBT OBLIGATIONS                                                      
No established secondary markets may exist for many sovereign debt obligations. 
Reduced secondary market liquidity may have an adverse effect on the market     
price and a Fund's ability to dispose of particular instruments when necessary  
to meet its liquidity requirements or in response to specific economic events   
such as a deterioration in the creditworthiness of the issuer. Reduced          
secondary market liquidity for certain sovereign debt obligations may also make 
it more difficult for a Fund to                                                 

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obtain accurate market quotations for the purpose of valuing its portfolio.     
Market quotations are generally available on many sovereign debt obligations    
only from a limited number of dealers and may not necessarily represent firm    
bids of those dealers or prices for actual sales.                               

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

The Funds are permitted to invest in sovereign debt obligations that are not    
current in the payment of interest or principal or are in default so long as    
the Adviser believes it to be consistent with the Funds' investment objectives. 
The Funds may have limited legal recourse in the event of a default with        
respect to certain sovereign debt obligations they hold. For example, remedies  
from defaults on certain sovereign debt obligations, unlike those on private    
debt, must, in some cases, be pursued in the courts of the defaulting party     
itself. Legal recourse therefore may be significantly diminished. Bankruptcy,   
moratorium, and other similar laws applicable to issuers of sovereign debt      
obligations may be substantially different from those applicable to issuers of  
private debt obligations. The political context, expressed as the willingness   
of an issuer of sovereign debt obligations to meet the terms of the debt        
obligation, for example, is of considerable importance. In addition, no         
assurance can be given that the holders of commercial bank debt will not        
contest payments to the holders of securities issued by foreign governments in  
the event of default under commercial bank loan agreements.                     

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.                                           

A Fund may also invest in inverse floating rate debt 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 AND PRINCIPAL-ONLY SECURITIES                                       
Zero coupon securities and principal-only (PO) 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.                                                             

ADDITIONAL RISK AND OTHER CONSIDERATIONS                                        
Investments in the Funds involve the special risk considerations described      
below. Certain of these risks may be heightened when investing in emerging      
markets.                                                                        

BORROWING AND LEVERAGE                                                          
The Funds may use borrowings for investment purposes subject to applicable      
statutory or regulatory requirements. Borrowings by a Fund result in leveraging 
of the Fund's shares. A Fund may also use leverage for investment transactions  
by entering into transactions such as reverse repurchase agreements, forward    
contracts and dollar rolls. This means that a Fund uses cash made available     
during the term of these transactions to make investments in other fixed-income 
securities.                                                                     

Utilization of leverage, which is usually considered speculative, involves      
certain risks to a Fund's shareholders. These include a higher volatility of    
the NAV of a Fund's shares and the relatively greater effect on the NAV of the  
shares. So long as a Fund is able to realize a net return on its investment     
portfolio that is higher than the interest expense paid on borrowings or the    
carrying costs of leveraged transactions, the effect of leverage will be to     
cause the Fund's shareholders to realize a higher current net investment income 
than if the Fund were not leveraged. If the interest expense on borrowings or   
the carrying costs of leveraged transactions approaches the net return on a     
Fund's investment portfolio, the benefit of leverage to the Fund's shareholders 
will be reduced. If the interest expense on borrowings or the carrying costs of 
leveraged transactions were to exceed the net return to shareholders, a Fund's  
use of leverage would result in a lower rate of return. Similarly, the effect   
of leverage in a declining market could be a greater decrease in NAV. In an     
extreme case, if a Fund's current investment income were not sufficient to meet 
the interest expense on borrowings or the carrying costs of leveraged           
transactions, it could be necessary for the Fund to liquidate certain of its    
investments, thereby reducing its NAV.                                          

FOREIGN (NON-U.S.) SECURITIES                                                   
Investing in foreign securities involves special risks and considerations not   
typically associated with investing in U.S. securities. The securities markets  
of many foreign countries are relatively small, with the majority of market     
capitalization and trading volume concentrated in a limited number of companies 
representing a small number of industries. A Fund that invests                  

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in foreign fixed-income securities may experience greater price volatility and  
significantly lower liquidity than a portfolio invested solely in securities of 
U.S. companies. These markets may be subject to greater influence by adverse    
events generally affecting the market, and by large investors trading           
significant blocks of securities, than is usual in the United States.           

Securities registration, custody, and settlement may in some instances be       
subject to delays and legal and administrative uncertainties. Foreign           
investment in the securities markets of certain foreign countries is restricted 
or controlled to varying degrees. These restrictions or controls may at times   
limit or preclude investment in certain securities and may increase the cost    
and expenses of a Fund. In addition, the repatriation of investment income,     
capital or the proceeds of sales of securities from certain of the countries is 
controlled under regulations, including in some cases the need for certain      
advance government notification or authority, and if a deterioration occurs in  
a country's balance of payments, the country could impose temporary             
restrictions on foreign capital remittances.                                    

A Fund also could be adversely affected by delays in, or a refusal to grant,    
any required governmental approval for repatriation, as well as by the          
application to it of other restrictions on investment. Investing in local       
markets may require a Fund to adopt special procedures or seek local            
governmental approvals or other actions, any of which may involve additional    
costs to a Fund. These factors may affect the liquidity of a Fund's investments 
in any country and the Adviser will monitor the effect of any such factor or    
factors on a Fund's investments. Transaction costs, including brokerage         
commissions for transactions both on and off the securities exchanges, in many  
foreign countries are generally higher than in the United States.               

Issuers of securities in foreign jurisdictions are generally not subject to the 
same degree of regulation as are U.S. issuers with respect to such matters as   
insider trading rules, restrictions on market manipulation, shareholder proxy   
requirements, and timely disclosure of information. The reporting, accounting,  
and auditing standards of foreign countries may differ, in some cases           
significantly, from U.S. standards in important respects, and less information  
may be available to investors in foreign securities than to investors in U.S.   
securities. Substantially less information is publicly available about certain  
non-U.S. issuers than is available about most U.S. issuers.                     

The economies of individual foreign countries may differ favorably or           
unfavorably from the U.S. economy in such respects as growth of gross domestic  
product or gross national product, rate of inflation, capital reinvestment,     
resource self-sufficiency, and balance of payments position. Nationalization,   
expropriation or confiscatory taxation, currency blockage, political changes,   
government regulation, political or social instability, revolutions, wars or    
diplomatic developments could affect adversely the economy of a foreign         
country. In the event of nationalization, expropriation, or other confiscation, 
a Fund could lose its entire investment in securities in the country involved.  
In addition, laws in foreign countries governing business organizations,        
bankruptcy and insolvency may provide less protection to security holders such  
as the Fund than that provided by U.S. laws.                                    

Investments in securities of companies in emerging markets involve special      
risks. There are approximately 100 countries identified by the World Bank as    
Low Income, Lower Middle Income and Upper Middle Income countries that are      
generally regarded as Emerging Markets. Emerging market countries that the      
Adviser currently considers for investment are listed below. Countries may be   
added to or removed from this list at any time.                                 

                                                                [Download Table]
                                                  
Algeria             Hong Kong    Poland           
Argentina           Hungary      Qatar            
Belize              India        Romania          
Brazil              Indonesia    Russia           
Bulgaria            Israel       Singapore        
Chile               Jamaica      Slovakia         
China               Jordan       Slovenia         
Colombia            Kazakhstan   South Africa     
Costa Rica          Lebanon      South Korea      
Cote D'Ivoire       Malaysia     Taiwan           
Croatia             Mexico       Thailand         
Czech Republic      Morocco      Trinidad & Tobago
Dominican Republic  Nigeria      Tunisia          
Ecuador             Pakistan     Turkey           
Egypt               Panama       Ukraine          
El Salvador         Peru         Uruguay          
Guatemala           Philippines  Venezuela        

Investing in emerging market securities imposes risks different from, or        
greater than, risks of investing in domestic securities or in foreign,          
developed countries. These risks include: smaller market capitalization of      
securities markets, which may suffer periods of relative illiquidity;           
significant price volatility; restrictions on foreign investment; and possible  
repatriation of investment income and capital. In addition, foreign investors   
may be required to register the proceeds of sales; future economic or political 
crises could lead to price controls, forced mergers, expropriation or           
confiscatory taxation, seizure, nationalization or creation of government       
monopolies. The currencies of emerging market countries may experience          
significant declines against the U.S. Dollar, and devaluation may occur         
subsequent to investments in these currencies by a Fund. Inflation and rapid    
fluctuations in inflation rates have had, and may continue to have, negative    
effects on the economies and securities markets of certain emerging market      
countries.                                                                      

Additional risks of emerging market securities may include: greater social,     
economic and political uncertainty and instability; more substantial            
governmental involvement in the economy; less governmental supervision and      
regulation; unavailability of currency hedging techniques; companies that are   
newly organized and small; differences in auditing and financial reporting      
standards, which may result in unavailability of material information about     
issuers; and less developed legal systems. In addition, emerging securities     
markets may have different clearance and settlement procedures, which may be    
unable to keep pace with the volume of securities transactions or otherwise     
make it difficult to engage in such transactions. Settlement problems may cause 
a Fund to miss attractive investment oppor-                                     

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tunities, hold a portion of its assets in cash pending investment, or be        
delayed in disposing of a portfolio security. Such a delay could result in      
possible liability to a purchaser of the security.                              

FOREIGN (NON-U.S.) CURRENCIES                                                   
A Fund that invests some portion of its assets in securities denominated in,    
and receives revenues in, foreign currencies will be adversely affected by      
reductions in the value of those currencies relative to the U.S. Dollar.        
Foreign currency exchange rates may fluctuate significantly. They are           
determined by supply and demand in the foreign exchange markets, the relative   
merits of investments in different countries, actual or perceived changes in    
interest rates, and other complex factors. Currency exchange rates also can be  
affected unpredictably by intervention (or the failure to intervene) by U.S. or 
foreign governments or central banks or by currency controls or political       
developments. In light of these risks, a Fund may engage in certain currency    
hedging transactions, as described above, which involve certain special risks.  

A Fund may also invest directly in foreign currencies for non-hedging purposes  
directly on a spot basis (i.e., cash) or through derivative transactions, such  
as forward currency exchange contracts, futures and options thereon, swaps and  
options as described above. These investments will be subject to the same       
risks. In addition, currency exchange rates may fluctuate significantly over    
short periods of time, causing a Fund's NAV to fluctuate.                       

INVESTMENT IN BELOW INVESTMENT GRADE FIXED-INCOME SECURITIES                    
Investments in securities rated below investment grade (commonly known as "junk 
bonds") 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, a Fund may experience difficulty in valuing such   
securities and, in turn, the Fund's assets.                                     

UNRATED SECURITIES                                                              
A Fund may invest in unrated securities when the Adviser believes that the      
financial condition of the issuers of such securities, or the protection        
afforded by the terms of the securities themselves, limits the risk to the Fund 
to a degree comparable to that of rated securities that are consistent with the 
Fund's objective and policies.                                                  

FUTURE DEVELOPMENTS                                                             
A 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                                   
A 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. 
Unless otherwise noted, all other investment policies of a Fund may be changed  
without shareholder approval.                                                   

TEMPORARY DEFENSIVE POSITION                                                    
For temporary defensive purposes in an attempt to respond to adverse market,    
economic, political or other conditions, each Fund may invest in certain types  
of short-term, liquid, investment grade or high quality (depending on the Fund) 
debt securities. While a Fund is investing for temporary defensive purposes, it 
may not meet its investment objectives.                                         

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

                                                                            29

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INVESTING IN THE FUNDS                                                          
--------------------------------------------------------------------------------

This section discusses how to buy, sell or redeem, or exchange different        
classes of shares of a Fund that are offered in this Prospectus. The Funds      
offer four 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" below.                    

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

Class A, Class R, Class K and Class I shares are available at NAV, without an   
initial sales charge, to 401(k) plans, 457 plans, employer-sponsored 403(b)     
plans, profit-sharing and money purchase pension plans, defined benefit plans,  
and non-qualified deferred compensation plans where plan level or omnibus       
accounts are held on the books of a Fund ("group retirement plans"), as follows:

Class A shares offered through this Prospectus are designed for group           
retirement plans with assets in excess of $10,000,000. Class A shares are also  
available at NAV to the AllianceBernstein Link, AllianceBernstein Individual    
401(k) and AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan    
assets or 100 employees.                                                        

Class R shares are designed for group retirement plans with plan assets up to   
$10,000,000.                                                                    

Class K shares are designed for group retirement plans with at least $1,000,000 
in plan assets.                                                                 

Class I shares are designed for group retirement plans with at least            
$10,000,000 in plan assets and certain related group retirement plans described 
in the Funds' SAI. Class I shares are also available to certain institutional   
clients of the Adviser who invest at least $2 million in a Fund.                

Class A, Class R, Class K and Class I shares are also available to certain      
AllianceBernstein-sponsored group retirement plans. Class R, Class K and        
Class I shares generally are not available to retail non-retirement accounts,   
traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs,          
SAR-SEPs, SIMPLE IRAs, and individual 403(b) plans. Effective October 19, 2005, 
Class I shares were no longer available to AllianceBernstein-sponsored group    
retirement plan programs known as the "Informed Choice" programs.               

REQUIRED INFORMATION                                                            
A 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). A 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 a 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.                                                             

A 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                                                                         
AllianceBernstein Investments, Inc., or ABI, may refuse any order to purchase   
shares. Each 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 (Rule 12b-1) fees or CDSCs.                 

WHAT IS A RULE 12B-1 FEE? 
A Rule 12b-1 fee is a fee deducted from a 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
amount of each share class's Rule 12b-1 fee, if any, is disclosed below and 
in a Fund's fee table included in Summary Information section above.        

ASSET-BASED SALES CHARGES OR DISTRIBUTION AND/OR SERVICE (RULE 12B-1) FEES      
Each 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:                                             

                                                                [Download Table]

         DISTRIBUTION AND/OR SERVICE
           (RULE 12B-1) FEE (AS A   
           PERCENTAGE OF AGGREGATE  
          AVERAGE DAILY NET ASSETS) 
------------------------------------
                                    
Class A             .30%            
Class R             .50%            
Class K             .25%            
Class I             None            

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Because these fees are paid out of a 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 R shares are subject to higher     
Rule 12b-1 fees than Class A shares. Because higher fees mean a higher expense  
ratio, Class R shares pay correspondingly lower dividends and may have a lower  
NAV (and returns) than Class A shares. Conversely, Class K and Class I shares   
have a lower or no Rule 12b-1 fee. Therefore, Class K and Class I shares have a 
lower expense ratio and may have a higher NAV (and returns) than Class A or     
Class R shares. All or some of these fees may be paid to financial              
intermediaries, including your financial intermediary.                          

CLASS A SHARES                                                                  
Class A shares offered through this Prospectus do not have an initial sales     
charge. Class A shares may be subject to a CDSC of up to 1%. Purchases of       
Class A shares by AllianceBernstein or non-AllianceBernstein-sponsored group    
retirement plans may be subject to a 1% CDSC if terminated within one year. The 
CDSC is applied to the lesser of NAV at the time of redemption of shares or the 
original cost of shares being redeemed.                                         

CLASS R, CLASS K AND CLASS I SHARES                                             
Class R, Class K and Class I shares do not have an initial sales charge or CDSC.

DISTRIBUTION ARRANGEMENTS FOR GROUP RETIREMENT PLANS                            
Each Fund offers distribution arrangements for group retirement plans. Plan     
sponsors, plan fiduciaries and other financial intermediaries may establish     
requirements for group retirement plans as to the purchase, sale or exchange of 
shares of a Fund, including maximum and minimum initial investment              
requirements, that are different from those described in this Prospectus and    
the Funds' SAI. Group retirement plans also may not offer all classes of shares 
of a Fund. A Fund is not responsible for, and has no control over, the decision 
of any plan sponsor or fiduciary to impose such differing requirements.         

PAYMENTS TO FINANCIAL INTERMEDIARIES                                            
Financial intermediaries market and sell shares of the Funds. These financial   
intermediaries may receive compensation for selling shares of the Funds. This   
compensation is paid from various sources, including any CDSC, and/or Rule      
12b-1 fee that you or the Funds may pay.                                        

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

ABI may pay financial intermediaries selling Class A shares a fee of up to 1%.  
Up to 100% of the Rule 12b-1 fees applicable to Class A shares each year may be 
paid to financial intermediaries, including your financial intermediary, that   
sell Class A shares.                                                            

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

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

- 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 Rule 12b-1 fees described above, some or all of which may be 
paid to financial intermediaries, 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 2011, ABI's additional payments to these firms for distribution services    
and educational support related to the AllianceBernstein Mutual Funds are       
expected to be approximately 0.04% of the average monthly assets of the         
AllianceBernstein Mutual Funds, or approximately $18.0 million. In 2010, ABI    
paid approximately 0.04% of the average monthly assets of the AllianceBernstein 
Mutual Funds or approximately $16.5 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 Mu-                                     

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tual 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         
intermediaries 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 Funds 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 Funds--Transfer Agency and           
Retirement Plan Services" below. These expenses paid by the Funds are included  
in "Other Expenses" under "Fees and Expenses of the Fund--Annual Fund Operating 
Expenses" in the Summary Information at the beginning of the Prospectus.        

IF ONE MUTUAL FUND SPONSOR MAKES GREATER DISTRIBUTION ASSISTANCE PAYMENTS   
THAN ANOTHER, YOUR FINANCIAL INTERMEDIARY MAY HAVE AN INCENTIVE TO RECOMMEND
ONE FUND COMPLEX OVER ANOTHER. SIMILARLY, IF YOUR FINANCIAL ADVISOR AND HIS 
OR HER FIRM RECEIVES MORE DISTRIBUTION ASSISTANCE FOR ONE SHARE CLASS VERSUS
ANOTHER, THE FINANCIAL INTERMEDIARY MAY HAVE AN INCENTIVE TO RECOMMEND THAT 
CLASS.                                                                      

As of the date of the 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                                                                
Bank of America                                                             
Cadaret, Grant & Co.                                                        
CCO Investment Services Corp.                                               
Chase Investment Services                                                   
Commonwealth Financial Network                                              
Donegal Securities                                                          
Financial Network Investment Company                                        
LPL Financial Corporation                                                   
Merrill Lynch                                                               
Morgan Stanley Smith Barney                                                 
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                                                        
Wells Fargo Investments                                                     

Although the Funds may use brokers and dealers that sell shares of the Funds to 
effect portfolio transactions, the Funds do 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. All exchanges are subject to the minimum 
investment restrictions set forth in the prospectus for the AllianceBernstein   
Mutual Fund whose shares are being acquired. Your exchange of shares is priced  
at the next-determined NAV after your order is received in proper form. You may 
request an exchange by mail or telephone. In order to receive a day's NAV,      
AllianceBernstein Investor Services, Inc., or ABIS, must receive and confirm    
your telephone exchange request by 4:00 p.m., Eastern time, on that day. The    
Funds 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 a Fund) on any day the  
New York Stock Exchange, or Exchange, is open. 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).                                  

Your financial intermediary must receive your sales request by 4:00 p.m.,       
Eastern time, and submit it to the Fund by a pre-arranged time for you to       
receive the next-determined NAV, less any applicable CDSC. Your financial       
intermediary is responsible for submitting all necessary documentation to the   
Fund and may charge you a fee for this service.                                 

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES                               
Each 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 Funds will be able 
to detect excessive or short-term trading and 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. Each 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.            

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RISKS ASSOCIATED WITH EXCESSIVE OR SHORT-TERM TRADING GENERALLY. While the      
Funds 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 a 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 a Fund to sell shares at       
inopportune times to accommodate redemptions relating to short-term trading. In 
particular, a 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, a 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.                                                          

Funds that may invest significantly in foreign securities may be particularly   
susceptible to short-term trading strategies. This is because foreign           
securities are typically traded on markets that close well before the time a    
Fund 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 foreign securities established some time before the Fund      
calculates its own share price (referred to as "time zone arbitrage"). The      
Funds have procedures, referred to as fair value pricing, designed to adjust    
closing market prices of foreign securities to reflect what is believed to be   
the fair value of those securities at the time a Fund calculates its NAV. While 
there is no assurance, the Funds expect 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 a Fund  
that does not invest primarily in foreign securities. 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"). All Funds may be adversely      
affected by price arbitrage.                                                    

POLICY REGARDING SHORT-TERM TRADING. Purchases and exchanges of shares of the   
Funds should be made for investment purposes only. The Funds will seek to       
prevent patterns of excessive purchases and sales of Fund shares to the extent  
they are detected by the procedures described below. The Funds reserve 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 Funds, through their 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 90-day period
 or purchases of shares followed by a sale within 90 days will be identified
by these surveillance procedures. For purposes of these transaction       
  surveillance procedures, the Funds may consider trading activity in multiple
accounts under common ownership, control or influence. Trading activity   
 identified by either, or a combination, of these factors, or as a result of
 any other information available at the time, will be evaluated to determine
whether such activity might constitute excessive or short-term trading.   
These surveillance procedures may be modified from time to time, as       
  necessary or appropriate to improve the detection of excessive or short-term
trading or to address specific circumstances.                             

..  ACCOUNT BLOCKING PROCEDURES. If the Funds determine, in their sole          
discretion, that a particular transaction or pattern of transactions      
identified by the transaction surveillance procedures described above is  
  excessive or short-term trading in nature, the relevant Fund account(s) will
  be immediately "blocked" and no future purchase or exchange activity will be
 permitted. However, sales of Fund shares back to a 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. In the event an account is blocked,
certain account-related privileges, such as the ability to place purchase,
sale and exchange orders over the internet or by phone, may also be       
 suspended. A blocked account will generally remain blocked unless and until
the account holder or the associated 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 Funds, particularly among certain brokers, dealers and other financial
intermediaries, including sponsors of retirement plans and variable       
insurance products. The Funds apply their surveillance procedures to these
omnibus account arrangements. As required by Commission rules, the Funds  
  have entered into agreements with all of their financial intermediaries that
 require the financial intermediaries to provide the Funds, upon the request
of the Funds or their agents, with individual account level information   
about their trans-                                                        

                                                                            33

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actions. If the Funds detect excessive trading through their monitoring of    
omnibus accounts, including trading at the individual account level, the      
financial intermediaries will also execute instructions from the Funds 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 Funds 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 FUNDS VALUE THEIR SHARES                                                
Each Fund's NAV is calculated at the close of regular trading on the Exchange   
(ordinarily, 4:00 p.m., Eastern time), only on days when the Exchange is open   
for business. To calculate NAV, a Fund's assets are valued and totaled,         
liabilities are subtracted, and the balance, called net assets, is divided by   
the number of shares outstanding. If a 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 Funds value their 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 each Fund's      
Board. When a Fund uses fair value pricing, it may take into account any        
factors it deems appropriate. A Fund may determine fair value based upon        
developments related to a specific security, current valuations of foreign      
stock indices (as reflected in U.S. futures markets) and/or U.S. sector or      
broader stock market indices. The prices of securities used by the 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.                    

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

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

34                                                                              

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MANAGEMENT OF THE FUNDS                                                         
--------------------------------------------------------------------------------

INVESTMENT ADVISER                                                              
Each Fund's adviser is AllianceBernstein L.P., 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, 2010, totaling      
approximately $484 billion (of which more than $81 billion represented assets   
of investment companies). As of September 30, 2010, the Adviser managed         
retirement assets for many of the largest public and private employee benefit   
plans (including 33 of the nation's FORTUNE 100 companies), for public employee 
retirement funds in 38 states, for investment companies, and for foundations,   
endowments, banks and insurance companies worldwide. Currently, the 35          
registered investment companies managed by the Adviser, comprising 115 separate 
investment portfolios, have approximately 3.2 million retail accounts.          

The Adviser provides investment advisory services and order placement           
facilities for each of the Funds. For these advisory services, each Fund paid   
the Adviser during the most recent fiscal year a management fee as a percentage 
of average daily net assets as follows:                                         

                                                                [Download Table]

                                     FEE AS A PERCENTAGE OF            
                                       AVERAGE DAILY NET    FISCAL YEAR
FUND                                         ASSETS            ENDED   
-----------------------------------------------------------------------
                                                                       
AllianceBernstein Intermediate Bond           .25%*          10/31/10  
AllianceBernstein Global Bond                 .45%            9/30/10  
AllianceBernstein Diversified Yield           .00%*          10/31/10  
AllianceBernstein High Income                 .45%           10/31/10  

*Fee stated net of any waivers and/or reimbursements. See "Fees and Expenses of 
the Fund" in the Summary Information at the beginning of the Prospectus for   
more information about fee waivers.                                           

A discussion regarding the basis for the Board's approval of each Fund's        
investment advisory agreement is available in the Fund's semi-annual report to  
shareholders.                                                                   

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 Funds. Certain other clients of the Adviser may have       
investment objectives and policies similar to those of a 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 a 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 a Fund. When two or more of the clients of the Adviser (including a   
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 management of, and investment decisions for, the Funds' portfolios are made 
by certain Investment Policy Teams. Each Investment Policy Team relies heavily  
on the fundamental analysis and research of the Adviser's large internal        
research staff. No one person is principally responsible for coordinating each  
Fund's investments.                                                             

The following table lists the Investment Policy Teams, the person within each   
Investment Policy Team with the most significant responsibility for day-to-day  
management of each 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:                                

     FUND AND                                    PRINCIPAL OCCUPATION(S)
    RESPONSIBLE                                   DURING THE PAST FIVE (5)
TEAM             EMPLOYEE; YEAR; TITLE             YEARS  
----------------------------------------------------------------------------- 
AllianceBernstein         Alison M. Martier; since  Senior Vice President of  
Intermediate Bond         2005; Senior Vice         the Adviser, with which   
Portfolio                 President of the Adviser  she has been associated   
U.S. Investment Grade     and Director of the       in a substantially        
Core Fixed Income Team    Fixed Income Senior       similar capacity to her   
                      Portfolio Management Team current position since
                                        prior to 2006.

                        Greg J. Wilensky; since   Senior Vice President of
                       2005; Senior Vice         the Adviser, with which
                      President of the Adviser  he has been associated
                  and Director of Stable    in a substantially
                       Value Investments         similar capacity to his
                                                current position since
                                        prior to 2006.

                     Shawn E. Keegan; since    Vice President of the
                      2005; Vice President of   Adviser, with which he
                        the Adviser               has been associated in a
                                               substantially similar
                                                 capacity to his current
                                                 position since prior to
                               2006.

                        Douglas J. Peebles;       Senior Vice President of
                       since 2007; Senior Vice   the Adviser, with which
                      President of the          he has been associated
                  Adviser; and Chief        in a substantially
                       Investment Officer and    similar capacity to his
                      Head of Fixed Income      current position since
                                        prior to 2006.

                        Paul J. DeNoon; since     Senior Vice President of
                       2009; Senior Vice         the Adviser, with which
                      President of the Adviser  he has been associated
                  and Director of Emerging  in a substantially
                       Market Debt               similar capacity to his
                                                current position since
                                        prior to 2006.

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     FUND AND                                    PRINCIPAL OCCUPATION(S)
    RESPONSIBLE                                   DURING THE PAST FIVE (5)
TEAM             EMPLOYEE; YEAR; TITLE             YEARS  
----------------------------------------------------------------------------- 
AllianceBernstein Global  Paul J. DeNoon; since     (see above)               
Bond Fund                 2002; (see above)                                   
Global Fixed Income                                 Senior Vice President of  
Investment Team           Scott DiMaggio; since     the Adviser, with which   
                      2005; Senior Vice         he has been associated
                  President of the Adviser  in a substantially
                       and Director of Canada    similar capacity to his
                      Fixed Income              current position since
                                        prior to 2006.

                     Michael L. Mon; since     Vice President of the
                      2003; Vice President of   Adviser, with which he
                        the Adviser               has been associated in a
                                               substantially similar
                                                 capacity to his current
                                                 position since prior to
                               2006.

           Douglas J. Peebles;       (see above)
since 1992; (see above)   

                     Matthew S. Sheridan;      Vice President of the
                      since 2007; Vice          Adviser, with which he
                        President of the Adviser  has been associated in a
                                               substantially similar
                                                 capacity to his current
                                                 position since prior to
                               2006.

AllianceBernstein         Paul J. DeNoon; since     (see above)               
Diversified Yield Fund    2005; (see above)         Vice President of the     
Global Fixed Income       Joran Laird; since 2009;  Adviser, with which he    
Investment Team and       Vice President of the     has been associated in a  
Global Credit Investment  Adviser                   substantially similar     
Team                                                capacity to his current   
                                                 position since prior to
                               2006.

           Douglas J. Peebles;       (see above)
since 1996; (see above)   

           Matthew S. Sheridan;      (see above)
since 2006; (see above)   

           Greg J. Wilensky; since   (see above)
2008; (see above)         

AllianceBernstein High    Paul J. DeNoon; since     (see above)               
Income Fund               2002; (see above)         Senior Vice President of  
Global Fixed Income       Gershon M. Distenfeld;    the Adviser, with which   
Investment Team and       since 2008; Senior Vice   he has been associated    
Global Credit Investment  President of the Adviser  in a substantially        
Team                                                similar capacity to his   
                                                current position since
                                        prior to 2006.

           Douglas J. Peebles;       (see above)
since 2002; (see above)   

                     Marco Santamaria; since   Vice President of the
                      2010; Vice President of   Adviser, with which he
                        the Adviser               has been associated in a
                                               substantially similar
                                                 capacity to his current
                                             position since June
                                                 2010. Prior thereto, he
                                                was a founding partner
                                              at Global Securities
                                      Advisors, an
                                                  emerging-market-oriented
                                                 fixed-income hedge fund
                                              since prior to 2006.

           Matthew S. Sheridan;      (see above)
since 2005; (see above)   

Additional information about the portfolio managers may be found in the Funds'  
SAI.                                                                            

PERFORMANCE OF A SIMILARLY MANAGED PORTFOLIO                                    
The investment teams employed by the Adviser to manage ALLIANCEBERNSTEIN HIGH   
INCOME FUND and ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO have substantial  
experience in managing discretionary accounts of institutional clients, pooled  
investment vehicles and/or other registered investment companies 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 Funds. The Historical Accounts that are not        
registered investment companies are not subject to certain limitations,         
diversification requirements and other restrictions imposed under the 1940 Act  
and the Internal Revenue Code (the "Code") to which the Funds, as registered    
investment companies, are subject and which, if applicable to the Historical    
Accounts, may have adversely affected the performance of the Historical         
Accounts. With respect to ALLIANCEBERNSTEIN HIGH INCOME FUND, the Historical    
Accounts' performance information is representative solely of the performance   
of a pooled investment vehicle that is not offered for sale in the United       
States.                                                                         

Set forth below is performance data provided by the Adviser relating to the     
Historical Accounts managed by the investment team that manages each Fund's     
assets. Performance data is shown for the period during which the investment    
teams of the Adviser managed the Historical Accounts through December 31, 2010. 
The aggregate assets for the Historical Accounts managed by the High Income     
investment team and the Intermediate Bond investment team as of September 30,   
2010 were approximately $26.6 billion and $15.6 billion, respectively. The      
investment teams' Historical Accounts have a nearly identical composition of    
representative investment holdings and related percentage weightings.           

The performance data is net of all fees (including any portfolio transaction    
costs) charged to the Historical Accounts, calculated on a monthly basis. The   
highest fee payable for the Historical Accounts is 2.04% of assets for          
ALLIANCEBERNSTEIN HIGH INCOME FUND and .91% of assets for ALLIANCEBERNSTEIN     
INTERMEDIATE BOND PORTFOLIO, annually. Net-of-fee performance figures reflect   
the compounding effect of such fees.                                            

The data has not been adjusted to reflect any fees that will be payable by the  
Funds, which may be higher than the fees imposed on the Historical Accounts,    
and will reduce the returns of the Funds. Expenses associated with the          
distribution of Class A, Class R and Class K shares of the Funds in accordance  
with the plans adopted by the Boards of the Funds under                         

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Commission Rule 12b-1 are also excluded. Except as noted, 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 Funds 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.              

A composite benchmark, comprised of the JPMorgan Emerging Markets Bond Index    
Global ("EMBI Global"), the JPMorgan Government Bond Index-Emerging Markets     
("GBI-EM") and the Barclays Capital High Yield Index (2% Constrained) ("BC High 
Yield") on an equal weighted basis (the "High Income Composite Benchmark") is   
used by High Income and its Historical Account, for purposes of this example,   
as a benchmark to measure its relative performance. EMBI Global tracks total    
returns for traded external debt instruments in the emerging markets, GBI-EM    
tracks total returns for local currency government bonds issued by emerging     
markets, and BC High                                                            
Yield tracks the U.S. Dollar-denominated, non-investment grade, fixed-rate,     
taxable corporate bond market.                                                  

The Barclays Capital Aggregate Index ("BC Aggregate Index") is used by          
ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO as a benchmark to measure its     
relative performance and is composed of securities from Barclays Capital        
Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the      
Asset-Backed Securities Index. The index's total return consists of price       
appreciation/depreciation plus income as a percentage of the original           
investment. Indices are rebalanced monthly by market capitalization.            

To the extent the investment teams utilize investment techniques such as swaps, 
futures or options, the performance of the High Income Composite Benchmark and  
the BC Aggregate Index may not be substantially comparable to the performance   
of the investment teams' Historical Accounts. The High Income Composite         
Benchmark and the BC Aggregate Index do 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      
teams' performance in managing the Historical Accounts as measured against a    
broad based market index. The performance of the Funds will be affected by the  
performance of the investment teams managing the Funds' assets. If the          
investment teams were to perform relatively poorly, the performance of the      
Funds would suffer. Investors should not rely on the performance data of the    
Historical Accounts as an indication of future performance of the Funds.        

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    
Funds' performance. The use of methodology different from that used to          
calculate performance could result in different performance data.               

SCHEDULE OF HISTORICAL PERFORMANCE - HISTORICAL ACCOUNTS*                       

                                                        [Enlarge/Download Table]

                                                              HIGH INCOME     HIGH INCOME                                     
                                                           HISTORICAL ACCOUNT  COMPOSITE                           BC HIGH    
                                                             TOTAL RETURN**    BENCHMARK  EMBI GLOBAL*** GBI-EM YIELD INDEX***
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
Year Ended December 31:                                                                                                       
2010                                                             15.62%          14.01%       12.04%     13.08%     14.94%    
2009                                                             60.62%          33.73%       28.18%     16.56%     58.76%    
2008                                                            -32.27%         -14.79%      -10.91%     -6.93%    -25.88%    
2007                                                              5.91%           8.19%        6.28%     16.28%      2.26%    
2006                                                             12.56%          10.97%        9.88%     11.96%     10.76%    
2005                                                              7.99%           5.46%       10.73%      2.87%      2.76%    
2004                                                             11.11%          15.36%       11.73%     23.12%     11.14%    
2003                                                             36.36%          24.06%       25.66%     17.79%     28.78%    
2002                                                              5.26%          13.66%       13.11%     29.11%      -.24%    
2001                                                            -10.44%             N/A        1.36%        N/A      5.46%    
2000                                                             -4.25%             N/A       14.41%        N/A     -5.79%    
1999                                                             18.76%             N/A       24.18%        N/A      2.39%    
1998                                                            -15.60%             N/A      -11.54%        N/A      1.87%    
Cumulative total return for the period September 22, 1997                                                                     
 (inception of Historical Account) to December 31, 2010         121.73%             N/A      234.63%***     N/A    132.90%*** 
------------------------------------------------------------------------------------------------------------------------------

*  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 all fees.                                                             

***Net inception cumulative index returns are from December 31, 1997.           

                                                                            37

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                                                        [Enlarge/Download Table]

                                                              INTERMEDIATE BOND   BC U.S. 
                                                             HISTORICAL ACCOUNTS AGGREGATE
                                                               TOTAL RETURN**      INDEX  
------------------------------------------------------------------------------------------
                                                                                          
Year Ended December 31:                                                                   
2010                                                                9.45%          6.54%  
2009                                                               18.77%          5.93%  
2008                                                               -5.41%          5.24%  
2007                                                                5.60%          6.97%  
2006                                                                5.26%          4.33%  
2005                                                                3.22%          2.43%  
2004                                                                5.48%          4.34%  
2003                                                                8.45%          4.10%  
2002                                                                7.93%         10.26%  
Cumulative total return for the period June 30, 2001                                      
 (inception of Historical Accounts) to December 31, 2010           81.89%         70.18%  
------------------------------------------------------------------------------------------

*  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 all fees.                                                             

AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 2010                            

                                                                [Download Table]

                                                                   SINCE  
                                 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
--------------------------------------------------------------------------
                                                                          
High Income Historical Account   15.62%  7.94%   8.44%    8.75%    6.18%* 
High Income Composite Benchmark  14.01%  9.12%   9.30%      N/A      N/A  
  EMBI Global                    12.04%  8.56%   8.36%   10.29%    9.74%**
  GBI-EM                         13.08%  7.06%   9.82%      N/A      N/A  
  BC High Yield                  14.94% 10.59%   8.91%    9.01%    6.72%**
--------------------------------------------------------------------------

*  Inception date of Historical Account is September 22, 1997.                  

** Since inception average annual total returns are from December 31, 1997.     

                                                                [Download Table]

                                                                SINCE  
                                       1 YEAR 3 YEARS 5 YEARS INCEPTION
-----------------------------------------------------------------------
                                                                       
Intermediate Bond Historical Accounts  9.45%   7.13%   6.45%    6.50%* 
BC U.S. Aggregate Index                6.54%   5.90%   5.80%    5.76%* 

*  Inception date of Historical Accounts is June 30, 2001.                      

TRANSFER AGENCY AND RETIREMENT PLAN SERVICES                                    
ABIS acts as the transfer agent for the Funds. 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.                                                                   

Retirement plans may also hold Fund shares in the name of the plan, rather than 
the participant. Plan recordkeepers, who may have affiliated financial          
intermediaries who sell shares of the Funds, may be paid for each participant   
fund account in amounts up to $19 per customer fund account per annum and/or up 
to 0.25% per annum of the average daily assets held in the plan. To the extent  
any of these payments for recordkeeping services, transfer agency services or   
retirement plan accounts are made by the Funds, 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 the 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.     

38                                                                              

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

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

If you receive an income dividend or capital gains distribution in cash you     
may, within 120 days following the date of its payment, reinvest the dividend   
or distribution in additional shares of that Fund without charge by returning   
to 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 that Fund.                                                         

While it is the intention of each Fund to distribute to its shareholders        
substantially all of each fiscal year's net income and net realized capital     
gains, if any, the amount and timing of any dividend or distribution will       
depend on the realization by the Fund of income and capital gains from          
investments. There is no fixed dividend rate and there can be no assurance that 
a Fund will pay any dividends or realize any capital gains. The final           
determination of the amount of a Fund's return of capital distributions for the 
period will be made after the end of each calendar year. Investments made       
through a 401(k) plan, 457 plan, employer sponsored 403(b) plan, profit sharing 
and money purchase plan, defined benefit plan or nonqualified deferred          
compensation plan are subject to special United States federal income tax       
rules. Therefore, the federal income tax consequences described below apply     
only to investments made other than by such plans.                              

You will normally have to pay federal income tax, and any state or local income 
taxes, on the distributions you receive from a Fund, whether you take the       
distributions in cash or reinvest them in additional shares. Distributions of   
net capital gains from the sale of investments that a Fund owned for more than  
one year and that are properly designated as capital gain dividends are taxable 
as long-term capital gains. For taxable years beginning on or before            
December 31, 2012, distributions of dividends to a Fund's non-corporate         
shareholders may be treated as "qualified dividend income," which is taxed at   
reduced rates, if such distributions are derived from, and designated by a Fund 
as, "qualified dividend income" and provided that holding period and other      
requirements are met by both the shareholder and the Fund. "Qualified dividend  
income" generally is income derived from dividends from U.S. corporations and   
"qualified foreign corporations." Other distributions by a Fund are generally   
taxable to you as ordinary income. Dividends declared in October, November, or  
December and paid in January of the following year are taxable as if they had   
been paid the previous December. A Fund will notify you as to how much of the   
Fund's distributions, if any, qualify for these reduced tax rates.              

Investment income received by a Fund from sources within foreign countries may  
be subject to foreign income taxes withheld at the source. To the extent that   
any Fund is liable for foreign income taxes withheld at the source, the Fund    
intends, if possible, to operate so as to meet the requirements of the Code to  
"pass through" to the Fund's shareholders credits for foreign income taxes paid 
(or to permit shareholders to claim a deduction for such foreign taxes), but    
there can be no assurance that any Fund will be able to do so, and Funds that   
invest primarily in U.S. securities will not do so. Furthermore, a              
shareholder's ability to claim a foreign tax credit or deduction for foreign    
taxes paid by a Fund may be subject to certain limitations imposed by the Code, 
as a result of which a shareholder may not be permitted to claim a credit or    
deduction for all or a portion of the amount of such taxes.                     

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

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

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

Each year shortly after December 31, each Fund will send you tax information    
stating the amount and type of all its distributions for the year. You are      
encouraged to consult your tax adviser about the federal, state, and local tax  
consequences in your particular circumstances, as well as about any possible    
foreign tax consequences.                                                       

NON-U.S. SHAREHOLDERS                                                           
If you are a nonresident alien individual or a foreign corporation for federal  
income tax purposes, please see the Funds' SAI for information on how you will  
be taxed as a result of holding shares in the Funds.                            

                                                                            39

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

Under unusual circumstances, a Fund may suspend redemptions or postpone payment 
for up to seven days or longer, as permitted by federal securities law. The     
Funds reserve the right to close an account that 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 Funds, 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.                                         

40                                                                              

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GLOSSARY OF INVESTMENT TERMS                                                    
--------------------------------------------------------------------------------

BONDS are interest-bearing or discounted government or corporate securities     
that obligate the issuer to pay the bond holder a specified sum of money,       
usually at specified intervals, and to repay the principal amount of the loan   
at maturity.                                                                    

FIXED-INCOME SECURITIES are investments, such as bonds, that pay a fixed rate   
of return.                                                                      

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

SOVEREIGN DEBT OBLIGATIONS are foreign government debt securities, loan         
participations between foreign governments and financial institutions, and      
interests in entities organized and operated for the purpose of restructuring   
the investment characteristics of foreign government securities.                

SUPRANATIONAL ENTITIES are international organizations formed by two or more    
governments. Examples of supranational entities include the International Bank  
for Reconstruction and Development, the Inter-American Development Bank, the    
Asian Development Bank, the African Development Bank, the International Finance 
Corporation and the European Bank for Reconstruction and Development.           

U.S. GOVERNMENT SECURITIES are securities issued or guaranteed by the U.S.      
Government, its agencies or instrumentalities, including obligations that are   
issued by private issuers that are guaranteed as to principal or interest by    
the U.S. Government, its agencies or instrumentalities, or by certain           
government-sponsored entities (entities chartered by or sponsored by Act of     
Congress). These securities include securities backed by the full faith and     
credit of the United States, those supported by the right of the issuer to      
borrow from the U.S. Treasury, and those backed only by the credit of the       
issuing agency or entity itself. The first category includes U.S. Treasury      
securities (which are U.S. Treasury bills, notes, and bonds) and certificates   
issued by GNMA. U.S. Government securities not backed by the full faith and     
credit of the United States or a right to borrow from the U.S. Treasury include 
certificates issued by FNMA and FHLMC.                                          

THE BOFA MERRILL LYNCH 3-MONTH T-BILL INDEX is an unmanaged index that measures 
returns of three-month Treasury Bills.                                          

THE BARCLAYS CAPITAL U.S. AGGREGATE INDEX is a broad-based bond index comprised 
of government, corporate, mortgage and asset-backed issues, rated investment    
grade or higher, and having at least one year to maturity.                      

THE BARCLAYS CAPITAL GLOBAL AGGREGATE INDEX is a macro index of global          
government and corporate bond markets, and is composed of various indices       
calculated by Barclays Capital, including the U.S. Aggregate Index, the         
Pan-European Aggregate Index, the Global Treasury Index, the Asian-Pacific      
Aggregate Index, the Eurodollar Index and the U.S. Investment-Grade 144A Index. 

THE BARCLAYS CAPITAL HIGH YIELD INDEX is an unmanaged index generally           
representative of corporate bonds rated below investment grade.                 

THE JPMORGAN EMERGING MARKETS BOND INDEX GLOBAL is a broad-based, unmanaged     
index which tracks total return for external currency denominated debt in       
emerging markets.                                                               

THE JPMORGAN GOVERNMENT BOND INDEX-EMERGING MARKETS is a definitive local       
emerging markets debt benchmark that tracks local currency government bonds     
issued by emerging markets.                                                     

                                                                            41

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FINANCIAL HIGHLIGHTS                                                            
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand each Fund's   
financial performance for the past five years (or, if shorter, the period of    
the Fund's operations). Certain information reflects financial results for a    
single share of a class of each Fund. The total returns in the table represent  
the rate that an investor would have earned (or lost) on an investment in the   
Fund (assuming reinvestment of all dividends and distributions). This           
information has been audited by Ernst & Young, LLP, the independent registered  
public accounting firm for all Funds, whose reports, along with each Fund's     
financial statements, are included in each Fund's Annual Report, which is       
available upon request.                                                         

                                                                            43

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                                                        [Enlarge/Download Table]

                                  INCOME FROM INVESTMENT OPERATIONS           LESS: DIVIDENDS AND DISTRIBUTIONS       
                               -----------------------------------     ---------------------------------------------- 
                                                         NET INCREASE                                                 
                     NET ASSET             NET REALIZED   (DECREASE)   DIVIDENDS    TAX   DISTRIBUTIONS               
                      VALUE,      NET     AND UNREALIZED IN NET ASSET   FROM NET  RETURN     FROM NET        TOTAL    
FISCAL YEAR OR       BEGINNING INVESTMENT GAIN (LOSS) ON  VALUE FROM   INVESTMENT   OF    REALIZED GAIN  DIVIDENDS AND
PERIOD               OF PERIOD INCOME (a)  INVESTMENTS    OPERATIONS     INCOME   CAPITAL ON INVESTMENTS DISTRIBUTIONS
----------------------------------------------------------------------------------------------------------------------
                                                                                                                      
INTERMEDIATE BOND                                                                                                     
CLASS A                                                                                                               
Year Ended 10/31/10   $10.28      $.42(c)     $  .70        $ 1.12       $(.42)    $(.00)     $0.00          $(.42)   
Year Ended 10/31/09     8.77       .44(c)       1.53          1.97        (.46)     (.00)      0.00           (.46)   
Year Ended 10/31/08    10.24       .50(c)      (1.49)         (.99)(h)    (.48)     (.00)      0.00           (.48)   
Year Ended 10/31/07    10.18       .42(c)        .06           .48        (.42)     (.00)      0.00           (.42)   
Year Ended 10/31/06    10.15       .41(c)        .04           .45        (.42)     (.00)      0.00           (.42)   

CLASS R                                                                                                               
Year Ended 10/31/10   $10.28      $.37(c)     $  .73        $ 1.10       $(.40)    $(.00)     $0.00          $(.40)   
Year Ended 10/31/09     8.77       .43(c)       1.51          1.94        (.43)     (.00)      0.00           (.43)   
Year Ended 10/31/08    10.24       .46(c)      (1.47)        (1.01)(h)    (.46)     (.00)      0.00           (.46)   
Year Ended 10/31/07    10.18       .44(c)        .02           .46        (.40)     (.00)      0.00           (.40)   
Year Ended 10/31/06    10.15       .39(c)        .04           .43        (.40)     (.00)      0.00           (.40)   

CLASS K                                                                                                               
Year Ended 10/31/10   $10.29      $.43(c)     $  .70        $ 1.13       $(.43)    $(.00)     $0.00          $(.43)   
Year Ended 10/31/09     8.78       .45(c)       1.52          1.97        (.46)     (.00)      0.00           (.46)   
Year Ended 10/31/08    10.25       .48(c)      (1.47)         (.99)(h)    (.48)     (.00)      0.00           (.48)   
Year Ended 10/31/07    10.19       .42(c)        .06           .48        (.42)     (.00)      0.00           (.42)   
Year Ended 10/31/06    10.16       .42(c)        .03           .45        (.42)     (.00)      0.00           (.42)   

CLASS I                                                                                                               
Year Ended 10/31/10   $10.29      $.49(c)     $  .68        $ 1.17       $(.46)    $(.00)     $0.00          $(.46)   
Year Ended 10/31/09     8.78       .47(c)       1.52          1.99        (.48)     (.00)      0.00           (.48)   
Year Ended 10/31/08    10.24       .50(c)      (1.45)         (.95)(h)    (.51)     (.00)      0.00           (.51)   
Year Ended 10/31/07    10.18       .45(c)        .06           .51        (.45)     (.00)      0.00           (.45)   
Year Ended 10/31/06    10.16       .44(c)        .03           .47        (.45)     (.00)      0.00           (.45)   

DIVERSIFIED YIELD                                                                                                     
CLASS A                                                                                                               
Year Ended 10/31/10   $ 8.10      $.24        $  .39        $  .63       $(.23)    $(.00)     $0.00          $(.23)   
Year Ended 10/31/09     7.39       .32           .71          1.03        (.28)     (.04)      0.00           (.32)   
Year Ended 10/31/08     9.02       .36         (1.63)        (1.27)(h)    (.36)     (.00)      0.00           (.36)   
Year Ended 10/31/07     8.62       .34           .40           .74        (.34)     (.00)      0.00           (.34)   
Year Ended 10/31/06     8.70       .34           .14           .48        (.34)     (.00)      (.22)          (.56)   

CLASS R                                                                                                               
Year Ended 10/31/10   $ 8.07      $.22        $  .39        $  .61       $(.21)    $(.00)     $0.00          $(.21)   
Year Ended 10/31/09     7.37       .30           .70          1.00        (.26)     (.04)      0.00           (.30)   
Year Ended 10/31/08     8.99       .34         (1.62)        (1.28)(h)    (.34)     (.00)      0.00           (.34)   
Year Ended 10/31/07     8.61       .35           .34           .69        (.31)     (.00)      0.00           (.31)   
Year Ended 10/31/06     8.69       .31           .14           .45        (.31)     (.00)      (.22)          (.53)   

CLASS K                                                                                                               
Year Ended 10/31/10   $ 8.10      $.23        $  .41        $  .64       $(.24)    $(.00)     $0.00          $(.24)   
Year Ended 10/31/09     7.39       .32           .71          1.03        (.28)     (.04)      0.00           (.32)   
Year Ended 10/31/08     9.00       .38         (1.63)        (1.25)(h)    (.36)     (.00)      0.00           (.36)   
Year Ended 10/31/07     8.61       .32           .40           .72        (.33)     (.00)      0.00           (.33)   
Year Ended 10/31/06     8.69       .29           .19           .48        (.34)     (.00)      (.22)          (.56)   

CLASS I                                                                                                               
Year Ended 10/31/10   $ 8.08      $.26        $  .40        $  .66       $(.26)    $(.00)     $0.00          $(.26)   
Year Ended 10/31/09     7.38       .34           .70          1.04        (.30)     (.04)      0.00           (.34)   
Year Ended 10/31/08     9.00       .38         (1.62)        (1.24)(h)    (.38)     (.00)      0.00           (.38)   
Year Ended 10/31/07     8.61       .36           .40           .76        (.37)     (.00)      0.00           (.37)   
Year Ended 10/31/06     8.69       .37           .14           .51        (.37)     (.00)      (.22)          (.59)   
----------------------------------------------------------------------------------------------------------------------

Please refer to the footnotes on pages 47 through 48.                           

44                                                                              

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                                                                [Download Table]

                                          RATIOS/SUPPLEMENTAL DATA                  
                         ---------------------------------------------------------- 
              TOTAL                                        RATIO OF NET             
            INVESTMENT                      RATIO OF        INVESTMENT              
NET ASSET  RETURN BASED    NET ASSETS,      EXPENSES          INCOME       PORTFOLIO
VALUE, END ON NET ASSET   END OF PERIOD    TO AVERAGE       TO AVERAGE     TURNOVER 
OF PERIOD   VALUE (b)    (000'S OMITTED)   NET ASSETS       NET ASSETS       RATE   
------------------------------------------------------------------------------------
                                                                                    
  $10.98       11.17%(d)    $418,023         .91%(e)(f)(g)     3.98%(c)(e)     99%  
   10.28       23.01(d)      419,319         .89(f)(g)         4.71(c)         95   
    8.77      (10.15)(d)     360,606         .85(f)            4.68(c)        184   
   10.24        4.79(d)       41,696         .98(f)            4.13(c)        173   
   10.18        4.51          44,409         .98(e)(f)         4.08(c)(e)     446   

  $10.98       10.94%(d)    $    759        1.08%(e)(f)(g)     3.49%(c)(e)     99%  
   10.28       22.74(d)          156        1.11(f)(g)         4.39(c)         95   
    8.77      (10.33)(d)          73        1.05(f)            4.45(c)        184   
   10.24        4.57(d)          577        1.18(f)            3.97(c)        173   
   10.18        4.31              13        1.18(e)(f)         3.89(c)(e)     446   

  $10.99       11.21%(d)    $  4,359         .86%(e)(f)(g)     4.02%(c)(e)     99%  
   10.29       23.05(d)        4,434         .84(f)(g)         4.76(c)         95   
    8.78      (10.09)(d)       3,784         .80(f)            4.69(c)        184   
   10.25        4.84(d)        7,222         .93(f)            4.39(c)        173   
   10.19        4.54              10         .93(e)(f)         4.13(c)(e)     446   

  $11.00       11.59%(d)    $  1,348         .67%(e)(f)(g)     4.60%(c)(e)     99%  
   10.29       23.36(d)        5,095         .59(f)(g)         5.02(c)         95   
    8.78       (9.78)(d)       5,115         .55(f)            4.98(c)        184   
   10.24        5.10(d)        5,368         .68(f)            4.44(c)        173   
   10.18        4.71           5,913         .68(e)(f)         4.37(c)(e)     446   

  $ 8.50        7.88%(d)    $ 42,733         .90%(e)(f)        2.83%(c)(e)     54%  
    8.10       14.45(d)       46,138         .90(f)            4.24(c)         86   
    7.39      (14.57)(d)      39,639         .90(f)            4.13(c)         81   
    9.02        8.60(d)       48,542        1.47               3.81           134   
    8.62        5.61          25,348        1.78(e)(g)         3.93(e)        169   

  $ 8.47        7.68%(d)    $    516        1.10%(e)(f)        2.61%(c)(e)     54%  
    8.07       14.12(d)          364        1.10(f)            4.02(c)         86   
    7.37      (14.65)(d)         252        1.10(f)            3.98(c)         81   
    8.99        8.15(d)          187        1.58               4.08           134   
    8.61        5.32              20        2.03(e)(g)         3.64(e)        169   

  $ 8.50        8.00%(d)    $    205         .85%(e)(f)        2.73%(c)(e)     54%  
    8.10       14.45(d)           25         .85(f)            4.29(c)         86   
    7.39      (14.28)(d)          21         .85(f)            4.02(c)         81   
    9.00        8.46(d)           57        1.59               3.47           134   
    8.61        5.61             141        1.80(e)(g)         3.63(e)        169   

  $ 8.48        8.26%(d)    $     10         .60%(e)(f)        3.13%(c)(e)     54%  
    8.08       14.69(d)            9         .60(f)            4.57(c)         86   
    7.38      (14.21)(d)           8         .60(f)            4.45(c)         81   
    9.00        8.92(d)           10        1.14               4.06           134   
    8.61        5.95              10        1.46(e)(g)         4.25(e)        169   
------------------------------------------------------------------------------------

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                                      INCOME FROM INVESTMENT OPERATIONS           LESS: DIVIDENDS AND DISTRIBUTIONS       
                                   -----------------------------------     ---------------------------------------------- 
                                                             NET INCREASE                                                 
                         NET ASSET             NET REALIZED   (DECREASE)   DIVIDENDS    TAX   DISTRIBUTIONS               
                          VALUE,      NET     AND UNREALIZED IN NET ASSET   FROM NET  RETURN     FROM NET        TOTAL    
                         BEGINNING INVESTMENT GAIN (LOSS) ON  VALUE FROM   INVESTMENT   OF    REALIZED GAIN  DIVIDENDS AND
FISCAL YEAR OR PERIOD    OF PERIOD INCOME (a)  INVESTMENTS    OPERATIONS     INCOME   CAPITAL ON INVESTMENTS DISTRIBUTIONS
--------------------------------------------------------------------------------------------------------------------------
                                                                                                                          
GLOBAL BOND                                                                                                               
CLASS A                                                                                                                   
Year Ended 9/30/10         $7.87      $.32(c)     $  .63        $  .95       $(.32)    $(.00)     $0.00          $(.32)   
Year Ended 9/30/09          7.39       .40(c)        .60          1.00        (.40)     (.00)      (.12)          (.52)   
Year Ended 9/30/08          8.07       .42(c)       (.70)         (.28)       (.40)     (.00)      0.00           (.40)   
Year Ended 9/30/07          7.54       .40           .52           .92        (.39)     (.00)      0.00           (.39)   
Year Ended 9/30/06          7.69       .44          (.15)          .29        (.44)     (.00)      0.00           (.44)   

CLASS R                                                                                                                   
Year Ended 9/30/10         $7.87      $.30(c)     $  .64        $  .94       $(.31)    $(.00)     $0.00          $(.31)   
Year Ended 9/30/09          7.39       .37(c)        .61           .98        (.38)     (.00)      (.12)          (.50)   
11/5/07(i) to 9/30/08       8.14       .35(c)       (.75)         (.40)       (.35)     (.00)      0.00           (.35)   

CLASS K                                                                                                                   
Year Ended 9/30/10         $7.87      $.32(c)     $  .64        $  .96       $(.33)    $(.00)     $0.00          $(.33)   
Year Ended 9/30/09          7.38       .40(c)        .61          1.01        (.40)     (.00)      (.12)          (.52)   
11/5/07(i) to 9/30/08       8.14       .36(c)       (.75)         (.39)       (.37)     (.00)      0.00           (.37)   

CLASS I                                                                                                                   
Year Ended 9/30/10         $7.87      $.34(c)     $  .64        $  .98       $(.35)    $(.00)     $0.00          $(.35)   
Year Ended 9/30/09          7.39       .36(c)        .66          1.02        (.42)     (.00)      (.12)          (.54)   
11/5/07(i) to 9/30/08       8.14       .47(c)       (.83)         (.36)       (.39)     (.00)      0.00           (.39)   

HIGH INCOME                                                                                                               
CLASS A                                                                                                                   
Year Ended 10/31/10        $8.24      $.69(c)     $  .96        $ 1.65(h)    $(.70)    $(.00)     $0.00          $(.70)   
Year Ended 10/31/09         5.85       .67(c)       2.44          3.11        (.69)     (.01)      (.02)          (.72)   
Year Ended 10/31/08         9.02       .61(c)      (2.87)        (2.26)(h)    (.68)     (.00)      (.23)          (.91)   
Year Ended 10/31/07         8.97       .56           .41           .97        (.57)     (.00)      (.35)          (.92)   
Year Ended 10/31/06         8.70       .55           .43           .98        (.57)     (.00)      (.14)          (.71)   

CLASS R                                                                                                                   
Year Ended 10/31/10        $8.24      $.67(c)     $  .96        $ 1.63(h)    $(.68)    $(.00)     $0.00          $(.68)   
Year Ended 10/31/09         5.85       .67(c)       2.43          3.10        (.68)     (.01)      (.02)          (.71)   
1/28/08(g) to 10/31/08      8.52       .46(c)      (2.66)        (2.20)(h)    (.47)     (.00)      0.00           (.47)   

CLASS K                                                                                                                   
Year Ended 10/31/10        $8.24      $.69(c)     $  .96        $ 1.65(h)    $(.70)    $(.00)     $0.00          $(.70)   
Year Ended 10/31/09         5.85       .68(c)       2.44          3.12        (.70)     (.01)      (.02)          (.73)   
1/28/08(i) to 10/31/08      8.52       .47(c)      (2.66)        (2.19)(h)    (.48)     (.00)      0.00           (.48)   

CLASS I                                                                                                                   
Year Ended 10/31/10        $8.25      $.71(c)     $  .97        $ 1.68(h)    $(.73)    $(.00)     $0.00          $(.73)   
Year Ended 10/31/09         5.85       .70(c)       2.44          3.14        (.71)     (.01)      (.02)          (.74)   
1/28/08(i) to 10/31/08      8.52       .49(c)      (2.67)        (2.18)(h)    (.49)     (.00)      0.00           (.49)   
--------------------------------------------------------------------------------------------------------------------------

Please refer to the footnotes on pages 47 through 48.                           

46                                                                              

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                                                        [Enlarge/Download Table]

                                            RATIOS/SUPPLEMENTAL DATA                    
                         -------------------------------------------------------------- 
              TOTAL                                           RATIO OF NET              
            INVESTMENT                       RATIO OF          INVESTMENT               
NET ASSET  RETURN BASED    NET ASSETS,       EXPENSES            INCOME        PORTFOLIO
VALUE, END ON NET ASSET   END OF PERIOD     TO AVERAGE         TO AVERAGE      TURNOVER 
OF PERIOD   VALUE (b)    (000'S OMITTED)    NET ASSETS         NET ASSETS        RATE   
----------------------------------------------------------------------------------------
                                                                                        
  $8.50        12.38%      $1,744,323        .98%(e)(f)(g)       3.98%(c)(e)       69%  
   7.87        14.65        1,367,036        .93(f)(g)           5.65(c)           91   
   7.39        (3.75)       1,425,649       1.04(f)(g)           5.19(c)          140   
   8.07        12.47        1,071,398       1.80(g)              5.09             170   
   7.54         3.90          935,901       1.04(e)              5.81(e)          104   

  $8.50        12.15%      $   11,857       1.15%(e)(f)(g)       3.66%(c)(e)       69%  
   7.87        14.38            2,302       1.15(f)(g)           5.35(c)           91   
   7.39        (5.15)             122       1.24(f)(g)(j)        4.92(c)(j)       140   

  $8.50        12.46%      $    1,261        .90%(e)(f)(g)       3.88%(c)(e)       69%  
   7.87        14.88              392        .89(f)(g)           5.63(c)           91   
   7.38        (5.07)              59        .99(f)(g)(j)        5.06(c)(j)       140   

  $8.50        12.77%      $    9,931        .63%(e)             4.17%(c)(e)       69%  
   7.87        15.00            2,897        .60(f)(g)           5.88(c)           91   
   7.39        (4.72)              67        .74(f)(g)(j)        5.45(c)(j)       140   

  $9.19        20.85%(d)   $1,326,974        .99%(e)(f)(g)       7.93%(c)(e)       26%  
   8.24        57.11(d)       780,222        .99(f)(g)          10.13(c)           46   
   5.85       (27.49)(d)      450,517       1.03(e)(f)(g)        7.65(c)(e)        74   
   9.02        11.54          281,677       1.41(e)(g)           6.24(e)           67   
   8.97        11.87          235,763       1.48(g)              6.32              75   

  $9.19        20.62%(d)   $   13,250       1.18%(e)(f)(g)       7.70%(c)(e)       26%  
   8.24        56.83(d)         3,754       1.19(f)(g)           9.86(c)           46   
   5.85       (27.09)(d)        1,443       1.18(e)(f)(g)(j)     7.62(c)(e)(j)     74   

  $9.19        20.94%(d)   $    1,624        .95%(e)(f)(g)       8.04%(c)(e)       26%  
   8.24        57.24(d)         1,328        .94(f)(g)          10.18(c)           46   
   5.85       (26.94)(d)          753        .93(e)(f)(g)(j)     8.01(c)(e)(j)     74   

  $9.20        21.23%(d)   $   17,272        .67%(e)(f)(g)       8.03%(c)(e)       26%  
   8.25        57.79(d)           306        .69(f)(g)          10.45(c)           46   
   5.85       (26.84)(d)          165        .69(e)(f)(g)(j)     8.09(c)(e)(j)     74   
----------------------------------------------------------------------------------------

(a)Based on average shares outstanding.                                         

(b)Total investment return is calculated assuming an initial investment is made 
  at the NAV at the beginning of the period, reinvestment of all dividends and
  distributions at the NAV during the period, and a redemption on the last day
of the period. Initial sales charges or CDSC, if applicable, are not      
reflected in the calculation of total investment return. Total investment 
 return does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Total investment  
returns calculated for periods of less than one year are not annualized.  

(c)Net of fees waived and expenses reimbursed by the Adviser.                   

(d)Includes the impact of proceeds received, and credited to the Fund resulting 
 from class action settlements, which enhanced the performance of each share
class.                                                                    

                                                                            47

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                                                                [Download Table]

                                     FOR FISCAL YEAR ENDED      
----------------------------------------------------------------
                                                                
ALLIANCEBERNSTEIN INTERMEDIATE BOND    October 31, 2010     .01%
                                       October 31, 2009     .01%
                                       October 31, 2008     .21%
                                       October 31, 2007     .61%
ALLIANCEBERNSTEIN DIVERSIFIED YIELD    October 31, 2010     .55%
                                       October 31, 2009     .57%
                                       October 31, 2008     .81%
                                       October 31, 2007    4.31%
ALLIANCEBERNSTEIN HIGH INCOME          October 31, 2010     .15%
                                       October 31, 2009     .05%
                                       October 31, 2008     .41%

(e)The ratio includes expenses attributable to costs of proxy solicitation.     

(f)Net of expenses assumed and/or waived/reimbursed. If the following Funds had 
 borne all expenses for the respective years ended, the expense ratios would
have been as follows:                                                     

                                                                [Download Table]

                                      2010  2009   2008   2007   2006 
----------------------------------------------------------------------
                                                                      
ALLIANCEBERNSTEIN INTERMEDIATE BOND                                   
Class A                              1.11%* 1.11% 1.09%   1.54% 1.34%*
Class R                              1.37%* 1.38% 1.25%   1.74% 1.57%*
Class K                              1.09%* 1.05% 1.02%   1.53% 1.27%*
Class I                               .81%*  .72%  .64%   1.09%  .88%*
ALLIANCEBERNSTEIN DIVERSIFIED YIELD                                   
Class A                              1.55%* 1.69% 1.65%               
Class R                              1.88%* 1.96% 1.88%               
Class K                              1.29%* 1.68% 1.53%               
Class I                              1.18%* 1.25% 1.28%               
ALLIANCEBERNSTEIN GLOBAL BOND                                         
Class A                              1.02%* 1.00% 1.15%               
Class R                              1.35%* 1.31% 1.48%+              
Class K                              1.06%*  .98% 1.09%+              
Class I                               .63%   .60%  .77%+              
ALLIANCEBERNSTEIN HIGH INCOME                                         
Class A                              1.04%* 1.13% 1.13%*+             
Class R                              1.37%* 1.36% 1.43%*+             
Class K                              1.08%* 1.10% 1.12%*+             
Class I                               .72%*  .72%  .79%*+             

--------                                                                        
*The ratio includes expenses attributable to costs of proxy solicitation. 
+Annualized.                                                              

(g)Includes interest expense. For the following Funds, the ratio of gross       
 expenses to average net assets, excluding interest expense (and any related
expenses), would have been as follows:                                    

                                                                [Download Table]

                                      2010  2009    2008     2007   2006 
-------------------------------------------------------------------------
                                                                         
ALLIANCEBERNSTEIN INTERMEDIATE BOND                                      
Class A                              1.05%* 1.07%                        
Class R                              1.34%* 1.33%                        
Class K                              1.03%* 1.01%                        
Class I                               .69%*  .68%                        
ALLIANCEBERNSTEIN DIVERSIFIED YIELD                                      
Class A                                                            1.72%*
Class R                                                            1.98%*
Class K                                                            1.75%*
Class I                                                            1.41%*
ALLIANCEBERNSTEIN GLOBAL BOND                                            
Class A                               .95%*  .97% 1.01%(j)  1.05%        
Class R                              1.29%* 1.27% 1.34%(j)               
Class K                              1.01%*  .93%  .95%(j)               
Class I                               .57%*  .54%  .63%(j)               
ALLIANCEBERNSTEIN HIGH INCOME                                            
Class A                              1.00%* 1.09% 1.07%*(j) 1.14%* 1.14% 
Class R                              1.34%* 1.32% 1.40%*(j)              
Class K                              1.03%* 1.06% 1.09%*(j)              
Class I                               .71%*  .68%  .75%*(j)              

--------                                                                        
*The ratio includes expenses attributable to costs of proxy solicitation. 

(h)Amount includes contribution from the Adviser of less than $.005.            

(i)Commencement of distribution.                                                

(j)Annualized.                                                                  

48                                                                              

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

BOND RATINGS                                                                    
MOODY'S INVESTORS SERVICE, INC.                                                 
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry 
the smallest degree of investment risk and are generally referred to as "gilt   
edge." Interest payments are protected by a large or by an exceptionally stable 
margin and principal is secure. While the various protective elements are       
likely to change, such changes as can be visualized are most unlikely to impair 
the fundamentally strong position of such issues.                               

Aa--Bonds which are rated Aa are judged to be of high quality by all standards. 
Together with the Aaa group they comprise what are generally known as high      
grade bonds. They are rated lower than the best bonds because margins of        
protection may not be as large as in Aaa securities or fluctuation of           
protective elements may be of greater amplitude or there may be other elements  
present which make the long-term risks appear somewhat larger than the Aaa      
securities.                                                                     

A--Bonds which are rated A possess many favorable investment attributes and are 
to be considered as upper-medium-grade obligations. Factors giving security to  
principal and interest are considered adequate but elements may be present      
which suggest a susceptibility to impairment some time in the future.           

Baa--Bonds which are rated Baa are considered as medium-grade obligations,      
i.e., they are neither highly protected nor poorly secured. Interest payments   
and principal security appear adequate for the present but certain protective   
elements may be lacking or may be characteristically unreliable over any great  
length of time. Such bonds lack outstanding investment characteristics and in   
fact have speculative characteristics as well.                                  

Ba--Bonds which are rated Ba are judged to have speculative elements; their     
future cannot be considered as well-assured. Often the protection of interest   
and principal payments may be very moderate and thereby not well safeguarded    
during both good and bad times over the future. Uncertainty of position         
characterizes bonds in this class.                                              

B--Bonds which are rated B generally lack characteristics of the desirable      
investment. Assurance of interest and principal payments or of maintenance of   
other terms of the contract over any long period of time may be small.          

Caa--Bonds which are rated Caa are of poor standing. Such issues may be in      
default or there may be present elements of danger with respect to principal or 
interest.                                                                       

Ca--Bonds which are rated Ca represent obligations which are speculative in a   
high degree. Such issues are often in default or have other marked shortcomings.

C--Bonds which are rated C are the lowest rated class of bonds and issues so    
rated can be regarded as having extremely poor prospects of ever attaining any  
real investment standing.                                                       

Absence of Rating--When no rating has been assigned or where a rating has been  
suspended or withdrawn, it may be for reasons unrelated to the quality of the   
issue.                                                                          

Should no rating be assigned, the reason may be one of the following:           

1. An application for rating was not received or accepted.                      

2. The issue or issuer belongs to a group of securities or companies that are   
unrated as a matter of policy.                                            

3. There is a lack of essential data pertaining to the issue or issuer.         

4. The issue was privately placed, in which case the rating is not published in 
Moody's publications.                                                     

Suspension or withdrawal may occur if new and material circumstances arise, the 
effects of which preclude satisfactory analysis; if there is no longer          
available reasonable up-to-date data to permit a judgment to be formed; if a    
bond is called for redemption; or for other reasons.                            

Note--Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating    
classification from Aa through Caa in its corporate bond rating system. The     
modifier 1 indicates that the security ranks in the higher end of its generic   
rating category; the modifier 2 indicates a mid-range ranking; and the modifier 
3 indicates that the issue ranks in the lower end of its generic rating         
category.                                                                       

STANDARD & POOR'S RATINGS SERVICES                                              
AAA--Debt rated AAA has the highest rating assigned by S&P. Capacity to pay     
interest and repay principal is extremely strong.                               

AA--Debt rated AA has a very strong capacity to pay interest and repay          
principal and differs from the highest rated issues only in small degree.       

A--Debt rated A has a strong capacity to pay interest and repay principal       
although it is somewhat more susceptible to the adverse effects of changes in   
circumstances and economic conditions than debt in higher rated categories.     

BBB--Debt rated BBB normally exhibits adequate protection parameters. However,  
adverse economic conditions or changing circumstances are more likely to lead   
to a weakened capacity to pay interest and repay principal for debt in this     
category than in higher rated categories.                                       

BB, B, CCC, CC, C--Debt rated BB, B, CCC, CC or C is regarded as having         
significant speculative characteristics. BB indicates the lowest degree of      
speculation and C the highest. While such debt will likely have some quality    
and protective characteristics, these are outweighed by large uncertainties or  
major exposures to adverse conditions.                                          

BB--Debt rated BB is less vulnerable to nonpayment than other speculative debt. 
However, it faces major ongoing                                                 

                                                                           A-1

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uncertainties or exposure to adverse business, financial or economic conditions 
which could lead to an inadequate capacity to pay interest and repay principal. 

B--Debt rated B is more vulnerable to nonpayment than debt rated BB, but there  
is capacity to pay interest and repay principal. Adverse business, financial or 
economic conditions will likely impair the capacity or willingness to pay       
principal or repay interest.                                                    

CCC--Debt rated CCC is currently vulnerable to nonpayment, and is dependent     
upon favorable business, financial and economic conditions to pay interest and  
repay principal. In the event of adverse business, financial or economic        
conditions, there is not likely to be capacity to pay interest or repay         
principal.                                                                      

CC--Debt rated CC is currently highly vulnerable to nonpayment.                 

C--The C rating may be used to cover a situation where a bankruptcy petition    
has been filed or similar action has been taken, but payments are being         
continued.                                                                      

D--The D rating, unlike other ratings, is not prospective; rather, it is used   
only where a default has actually occurred.                                     

Plus (+) or Minus (-)--The ratings from AA to CCC may be modified by the        
addition of a plus or minus sign to show relative standing within the major     
rating categories.                                                              

NR--Not rated.                                                                  

FITCH RATINGS                                                                   
AAA--Bonds considered to be investment grade and of the highest credit quality. 
The obligor has an exceptionally strong ability to pay interest and repay       
principal, which is unlikely to be affected by reasonably foreseeable events.   

AA--Bonds considered to be investment grade and of very high credit quality.    
The obligor's ability to pay interest and repay principal is very strong,       
although not quite as strong as bonds rated AAA. Because bonds rated in the AAA 
and AA categories are not significantly vulnerable to foreseeable future        
developments, short-term debt of these issuers is generally rated F1+.          

A--Bonds considered to be investment grade and of high credit quality. The      
obligor's ability to pay interest and repay principal is considered to be       
strong, but may be more vulnerable to adverse changes in economic conditions    
and circumstances than bonds with higher ratings.                               

BBB--Bonds considered to be investment grade and of satisfactory credit         
quality. The obligor's ability to pay interest and repay principal is           
considered to be adequate. Adverse changes in economic conditions and           
circumstances, however, are more likely to have adverse impact on these bonds,  
and therefore impair timely payment. The likelihood that the ratings of these   
bonds will fall below investment grade is higher than for bonds with higher     
ratings.                                                                        

BB--Bonds are considered speculative. The obligor's ability to pay interest and 
repay principal may be affected over time by adverse economic changes. However, 
business and financial alternatives can be identified which could assist the    
obligor in satisfying its debt service requirements.                            

B--Bonds are considered highly speculative. While bonds in this class are       
currently meeting debt service requirements, the probability of continued       
timely payment of principal and interest reflects the obligor's limited margin  
of safety and the need for reasonable business and economic activity throughout 
the life of the issue.                                                          

CCC--Bonds have certain identifiable characteristics which, if not remedied,    
may lead to default. The ability to meet obligations requires an advantageous   
business and economic environment.                                              

CC--Bonds are minimally protected. Default in payment of interest and/or        
principal seems probable over time.                                             

C--Bonds are in imminent default in payment of interest or principal.           

DDD, DD, D--Bonds are in default on interest and/or principal payments. Such    
bonds are extremely speculative and should be valued on the basis of their      
ultimate recovery value in liquidation or reorganization of the obligor. DDD    
represents the highest potential for recovery on these bonds, and D represents  
the lowest potential for recovery.                                              

Plus (+) Minus (-)--Plus and minus signs are used with a rating symbol to       
indicate the relative position of a credit within the rating category. Plus and 
minus signs, however, are not used in the AAA category or in categories below B.

NR--Indicates that Fitch does not rate the specific issue.                      

DOMINION BOND RATING SERVICE LIMITED                                            
Each rating category is denoted by the subcategories "high" and "low". The      
absence of either a "high" or "low" designation indicates the rating is in the  
"middle" of the category. The AAA and D categories do not utilize "high",       
"middle", and "low" as differential grades.                                     

AAA--Long-term debt rated AAA is of the highest credit quality, with            
exceptionally strong protection for the timely repayment of principal and       
interest. Earnings are considered stable, the structure of the industry in      
which the entity operates is strong, and the outlook for future profitability   
is favorable. There are few qualifying factors present that would detract from  
the performance of the entity. The strength of liquidity and coverage ratios is 
unquestioned and the entity has established a credible track record of superior 
performance. Given the extremely high standard that Dominion has set for this   
category, few entities are able to achieve a AAA rating.                        

AA--Long-term debt rated AA is of superior credit quality, and protection of    
interest and principal is considered high. In many cases they differ from       
long-term debt rated AAA only to a small degree. Given the extremely            
restrictive definition Dominion has for the AAA category, entities rated AA are 
also considered to be strong credits, typically exemplifying above-average      
strength in key areas of consideration and unlikely to be significantly         
affected by reasonably foreseeable events.                                      

A-2                                                                             

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A--Long-term debt rated A is of satisfactory credit quality. Protection of      
interest and principal is still substantial, but the degree of strength is less 
than that of AA rated entities. While A is a respectable rating, entities in    
this category are considered to be more susceptible to adverse economic         
conditions and have greater cyclical tendencies than higher-rated securities.   

BBB--Long-term debt rated BBB is of adequate credit quality. Protection of      
interest and principal is considered acceptable, but the entity is fairly       
susceptible to adverse changes in financial and economic conditions, or there   
may be other adverse conditions present which reduce the strength of the entity 
and its rated securities.                                                       

BB--Long-term debt rated BB is defined to be speculative and non-investment     
grade, where the degree of protection afforded interest and principal is        
uncertain, particularly during periods of economic recession. Entities in the   
BB range typically have limited access to capital markets and additional        
liquidity support. In many cases, deficiencies in critical mass,                
diversification, and competitive strength are additional negative               
considerations.                                                                 

B--Long-term debt rated B is considered highly speculative and there is a       
reasonably high level of uncertainty as to the ability of the entity to pay     
interest and principal on a continuing basis in the future, especially in       
periods of economic recession or industry adversity.                            

CCC, CC and C--Long-term debt rated in any of these categories is very highly   
speculative and is in danger of default of interest and principal. The degree   
of adverse elements present is more severe than long-term debt rated B.         
Long-term debt rated below B often have features which, if not remedied, may    
lead to default. In practice, there is little difference between these three    
categories, with CC and C normally used for lower ranking debt of companies for 
which the senior debt is rated in the CCC to B range.                           

D--A security rated D implies the issuer has either not met a scheduled payment 
of interest or principal or that the issuer has made it clear that it will miss 
such a payment in the near future. In some cases, Dominion may not assign a D   
rating under a bankruptcy announcement scenario, as allowances for grace        
periods may exist in the underlying legal documentation. Once assigned, the D   
rating will continue as long as the missed payment continues to be in arrears,  
and until such time as the rating is suspended, discontinued, or reinstated by  
Dominion.                                                                       

                                                                           A-3

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APPENDIX B                                                                      
--------------------------------------------------------------------------------

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

The settlement agreement between the Adviser and the New York State Attorney    
General requires the Funds 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 the Summary Information at the beginning of this       
Prospectus about the effect of a Fund's expenses, including investment advisory 
fees and other Fund costs, on each Fund's returns over a 10-year period. The    
chart shows the estimated expenses that would be charged on a hypothetical      
investment of $10,000 in Class A shares of each Fund assuming a 5% return each  
year. 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 each Fund is the same as stated under "Financial       
Highlights." If you wish to obtain hypothetical investment information for      
other classes of shares of each Fund, please refer to the "Mutual Fund Fees &   
Expenses Calculators" on www.AllianceBernstein.com. Your actual expenses may be 
higher or lower.                                                                

ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT              HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS    EXPENSES*    INVESTMENT 
---------------------------------------------------------------------
                                                                     
1       $10,000.00   $  500.00   $10,500.00  $   93.45    $10,406.55 
2        10,406.55      520.33    10,926.88     121.29     10,805.59 
3        10,805.59      540.28    11,345.87     125.94     11,219.93 
4        11,219.93      561.00    11,780.93     130.77     11,650.16 
5        11,650.16      582.51    12,232.67     135.78     12,096.89 
6        12,096.89      604.84    12,701.73     140.99     12,560.74 
7        12,560.74      628.04    13,188.78     146.40     13,042.38 
8        13,042.38      652.12    13,694.50     152.01     13,542.49 
9        13,542.49      677.12    14,219.61     157.84     14,061.77 
10       14,061.77      703.09    14,764.86     163.89     14,600.97 
---------------------------------------------------------------------
Total                $5,969.33               $1,368.36               

ALLIANCEBERNSTEIN GLOBAL BOND FUND                                              
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT              HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS    EXPENSES*    INVESTMENT 
---------------------------------------------------------------------
                                                                     
1       $10,000.00   $  500.00   $10,500.00  $  102.90    $10,397.10 
2        10,397.10      519.86    10,916.96     111.35     10,805.61 
3        10,805.61      540.28    11,345.89     115.73     11,230.16 
4        11,230.16      561.51    11,791.67     120.28     11,671.39 
5        11,671.39      583.57    12,254.96     125.00     12,129.96 
6        12,129.96      606.50    12,736.46     129.91     12,606.55 
7        12,606.55      630.33    13,236.88     135.02     13,101.86 
8        13,101.86      655.09    13,756.95     140.32     13,616.63 
9        13,616.63      680.83    14,297.46     145.83     14,151.63 
10       14,151.63      707.58    14,859.21     151.56     14,707.65 
---------------------------------------------------------------------
Total                $5,985.55               $1,277.90               

ALLIANCEBERNSTEIN DIVERSIFIED YIELD FUND                                        
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT              HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS    EXPENSES*    INVESTMENT 
---------------------------------------------------------------------
                                                                     
1       $10,000.00   $  500.00   $10,500.00  $   94.50    $10,405.50 
2        10,405.50      520.28    10,925.78     169.35     10,756.43 
3        10,756.43      537.82    11,294.25     175.06     11,119.19 
4        11,119.19      555.96    11,675.15     180.96     11,494.19 
5        11,494.19      574.71    12,068.90     187.07     11,881.83 
6        11,881.83      594.09    12,475.92     193.38     12,282.54 
7        12,282.54      614.13    12,896.67     199.90     12,696.77 
8        12,696.77      634.84    13,331.61     206.64     13,124.97 
9        13,124.97      656.25    13,781.22     213.61     13,567.61 
10       13,567.61      678.38    14,245.99     220.81     14,025.18 
---------------------------------------------------------------------
Total                $5,866.46               $1,841.28               

B-1                                                                             

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ALLIANCEBERNSTEIN HIGH INCOME FUND                                              
--------------------------------------------------------------------------------

                                                                [Download Table]

                    HYPOTHETICAL INVESTMENT              HYPOTHETICAL
       HYPOTHETICAL PERFORMANCE    AFTER    HYPOTHETICAL    ENDING   
YEAR    INVESTMENT    EARNINGS    RETURNS    EXPENSES*    INVESTMENT 
---------------------------------------------------------------------
                                                                     
1       $10,000.00   $  500.00   $10,500.00  $  103.95    $10,396.05 
2        10,396.05      519.80    10,915.85     113.52     10,802.33 
3        10,802.33      540.12    11,342.45     117.96     11,224.49 
4        11,224.49      561.22    11,785.71     122.57     11,663.14 
5        11,663.14      583.16    12,246.30     127.36     12,118.94 
6        12,118.94      605.95    12,724.89     132.34     12,592.55 
7        12,592.55      629.63    13,222.18     137.51     13,084.67 
8        13,084.67      654.23    13,738.90     142.88     13,596.02 
9        13,596.02      679.80    14,275.82     148.47     14,127.35 
10       14,127.35      706.37    14,833.72     154.27     14,679.45 
---------------------------------------------------------------------
Total                $5,980.28               $1,300.83               

*Expenses are net of any fee waiver or expense waiver for the first year.       
Thereafter, the expense ratio reflects the Fund's operating expenses as       
reflected under "Fees and Expenses of the Fund" before waiver in the Summary  
Information at the beginning of this Prospectus.                              

                                                                           B-2

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

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

..  STATEMENT OF ADDITIONAL INFORMATION (SAI)                                   
The Funds have an SAI, which contains more detailed information about the       
Funds, including their operations and investment policies. The Funds' SAI and   
independent registered public accounting firm's reports and financial           
statements in each Fund's most recent annual report to shareholders are         
incorporated by reference into (and are legally part of) this Prospectus.       

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

                                                                [Download Table]
                                                               
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 these documents 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 Funds 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, Wash. DC 20549-1520.                            

You also may find these documents and more information about the Adviser and    
the Funds on the Internet at: www.AllianceBernstein.com.                        

AllianceBernstein(R) and the AB logo are registered trademarks and service      
marks used by permission of the owner, AllianceBernstein L.P.                   

                                                                [Download Table]

FUND               SEC FILE NO.
-------------------------------
                               
Intermediate Bond   811-02383  
Global Bond         811-06554  
Diversified Yield   811-07391  
High Income         811-08188  

                                                            PRO-RTMT-0115-0111

 [GRAPHIC]

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[LOGO]            ALLIANCEBERNSTEIN BOND FUND, INC.                             
  -ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO
         (Class A-ABQUX; Class B-ABQBX; Class C-ABQCX; Advisor
             Class-ABQYX; Class R-ABQRX; Class K-ABQKX; Class I-ABQIX)

   ALLIANCEBERNSTEIN UNCONSTRAINED BOND FUND, INC.
         (Class A-AGSAX; Class B-AGSBX; Class C-AGCCX; Advisor
             Class-AGSIX; Class R-AGSRX; Class K-AGSKX; Class I-AGLIX)

ALLIANCEBERNSTEIN HIGH INCOME FUND, INC.    
               (Class A-AGDAX; Class B-AGDBX; Class C-AGDCX; Advisor Class
       AGDYX; Class R-AGDRX; Class K-AGDKX; Class I-AGDIX)

ALLIANCEBERNSTEIN GLOBAL BOND FUND, INC.    
               (Class A-ANAGX; Class B-ANABX; Class C-ANACX; Advisor Class
       ANAYX; Class R-ANARX; Class K-ANAKX; Class I-ANAIX)

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

c/o AllianceBernstein Investor Services, Inc. 
P. O. Box 786003, San Antonio, Texas 78278-6003 
Toll Free: (800) 221-5672 For Literature: Toll
Free (800) 227-4618 

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

STATEMENT OF ADDITIONAL INFORMATION 
January 31, 2011

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

            This Statement of Additional Information ("SAI") is not a prospectus
but supplements and should be read in conjunction with the current prospectus,  
dated January 31, 2011, for the AllianceBernstein Intermediate Bond Portfolio   
("Intermediate Bond") of AllianceBernstein Bond Fund, Inc., AllianceBernstein   
Unconstrained Bond Fund, Inc. ("Unconstrained Bond"), AllianceBernstein Global  
Bond Fund, Inc. ("Global Bond") and AllianceBernstein High Income Fund, Inc.    
("High Income") (each a "Fund" and collectively, the "Funds") that offers Class 
A, Class B, Class C and Advisor Class shares of the Funds and the prospectus,   
dated January 31, 2011, of the Funds that offers Class A, Class R, Class K and  
Class I shares of the Funds (each a "Prospectus" and together, the              
"Prospectuses"). Financial statements for Intermediate Bond, Unconstrained Bond 
and High Income for the year ended October 31, 2010, and financial statements   
for Global Bond for the year ended September 30, 2010, are included in each     
Fund's annual report to shareholders and are incorporated into the SAI by       
reference. Copies of the Prospectuses and each Fund's annual report may be      
obtained by contacting AllianceBernstein Investor Services, Inc., ("ABIS") at   
the address or the "For Literature" telephone number shown above or on the      
Internet at www.AllianceBernstein.com.                                          

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TABLE OF CONTENTS 
----------------- 
                                                                            Page
                                                                            ----

INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS............................  2
INVESTMENTS RESTRICTIONS..................................................... 44
MANAGEMENT OF THE FUNDS...................................................... 47
EXPENSES OF THE FUNDS........................................................ 82
PURCHASE OF SHARES............................................................92
REDEMPTION AND REPURCHASE OF SHARES..........................................117
SHAREHOLDER SERVICES.........................................................120
NET ASSET VALUE..............................................................124
DIVIDENDS, DISTRIBUTIONS AND TAXES...........................................127
FUND TRANSACTIONS............................................................134
GENERAL INFORMATION..........................................................138
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC                
ACCOUNTING FIRM..............................................................157

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

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

INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS 

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

Introduction to the Funds                                                       
-------------------------                                                       

        Except as otherwise noted, each Fund's investment objectives and
policies described below are not "fundamental policies" within the meaning of   
the Investment Company Act of 1940, as amended (the "1940 Act") and may,        
therefore, be changed by the Fund's Board of Directors (the "Board") without    
shareholder approval. However, no Fund will change its investment objective     
without at least 60 days' prior written notice to shareholders. There is no     
guarantee that a Fund will achieve its investment objective. Whenever any       
investment policy or restriction states a percentage of a Fund's assets that may
be invested in any security or other asset, it is intended that such percentage 
limitation be determined immediately after and as a result of a Fund's          
acquisition of such securities or other assets. Accordingly, any later increases
or decreases in percentage beyond the specified limitations resulting from a    
change in values or net assets will not be considered a violation of this       
percentage limitation.                                                          

Additional Investment Policies and Practices                                    
--------------------------------------------                                    

          The following information about the Funds' investment policies and
practices supplements the information set forth in the Prospectuses.            

Derivatives                                                                     
-----------                                                                     

    A Fund may, but is not required to, use derivatives for risk
management purposes or as part of its investment practices. Derivatives are     
financial contracts whose value depends on, or is derived from, the value of an 
underlying asset, reference rate or index. These assets, rates, and indices may 
include bonds, stocks, mortgages, commodities, interest rates, currency exchange
rates, bond indices and stock indices.                                          

    There are four principal types of derivatives, which include
options, futures, forwards and swaps. The four principal types of derivative    
instruments, as well as the methods in which they may be used by a Fund are     
described below. Derivatives may be (i) standardized, exchange-traded contracts 
or (ii) customized, privately-negotiated contracts. Exchange-traded derivatives 
tend to be more liquid and subject to less credit risk than those that are      
privately negotiated. The Funds may use derivatives to earn income and enhance  
returns, to hedge or adjust the risk profile of a portfolio and either to       
replace more traditional direct investments or to obtain exposure to otherwise  
inaccessible markets.                                                           

            Forward Contracts. A forward contract, which may be standardized and
exchange-traded or customized, and privately negotiated, is an agreement for 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  
other tangible asset underlying the forward contract to an agreed upon location 
at a future date (rather than settled by cash) or will be rolled forward into a 
new forward contract. Non-deliverable forwards ("NDFs") specify a cash payment  
upon maturity. NDFs are normally used when the market for physical settlement of
the currency is underdeveloped, heavily regulated or highly taxed.              

     Futures Contracts and Options on Futures Contracts. A futures
contract is an 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 are          
standardized, exchange-traded instruments and are fungible (i.e., considered to 
be perfect substitutes for each other). This fungibility allows futures         
contracts to be readily offset or cancelled through the acquisition of equal but
opposite positions, which is the primary method in which futures contracts are  
liquidated. A cash-settled futures contract does not require physical delivery  
of the underlying asset but instead is settled for cash equal to the difference 
between the values of the contract on the date it is entered into and its       
maturity date.                                                                  

          Options. An option, which may be standardized and exchange-traded,
or customized and privately negotiated, 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") or sell (a "put") 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.      
Likewise, when an option is exercised the writer of the option is obligated to  
sell (in the case of a call option) or to purchase (in the case of a put option)
the underlying asset (or settle for cash an amount based on an underlying asset,
rate or index). Investments in options are considered speculative. A 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.                                 

       Swaps. A swap, which may be standardized and exchange-traded or
customized, and privately negotiated, 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         
(interest rates in the case of interest rate swaps, currency exchange rates in  
the case of currency swaps) for a specified amount of an underlying asset (the  
"notional" principal amount). Swaps are entered into on a net basis (i.e., the  
two payment streams are netted out, with the Funds receiving or paying, as the  
case may be, only the net amount of the two payments). Except for currency      
swaps, the notional principal amount is used solely to calculate the payment    
streams but is not exchanged. With respect to currency swaps, actual principal  
amounts of currencies may be exchanged by the counterparties at the initiation, 
and again upon the termination, of the transaction.                             

  Risks of Derivatives. Investment techniques employing such
derivatives involve risks different from, and, in certain cases, greater than,  
the risks presented by more traditional investments. Following is a general     
discussion of important risk factors and issues concerning the use of           
derivatives.                                                                    

             -- Market Risk. This is the general risk attendant to all
              investments that the value of a particular investment will
     change in a way detrimental to a Fund's interest.

                  -- Management Risk. Derivative products are highly specialized
           instruments that require investment techniques and risk
            analyses different from those associated with stocks and
                bonds. The use of a derivative requires an understanding not
                only of the underlying instrument but also of the derivative
               itself, without the benefit of observing the performance of
           the derivative under all possible market conditions. In
                 particular, the use and complexity of derivatives require the
                maintenance of adequate controls to monitor the transactions
                  entered into, the ability to assess the risk that a derivative
             adds to a Fund's investment portfolio, and the ability to
           forecast price, interest rate or currency exchange rate
movements correctly.                        

                 -- Credit Risk. This is the risk that a loss may be sustained
              by a Fund as a result of the failure of another party to a
                  derivative (usually referred to as a "counterparty") to comply
                  with the terms of the derivative contract. The credit risk for
          exchange-traded derivatives is generally less than for
              privately negotiated derivatives, since the clearinghouse,
               which is the issuer or counterparty to each exchange-traded
         derivative, provides a guarantee of performance. This
                  guarantee is supported by a daily payment system (i.e., margin
                  requirements) operated by the clearinghouse in order to reduce
              overall credit risk. For privately negotiated derivatives,
               there is no similar clearing agency guarantee. Therefore, a
                 Fund considers the creditworthiness of each counterparty to a
                  privately negotiated derivative in evaluating potential credit
risk.                                       

              -- Liquidity Risk. Liquidity risk exists when a particular
                instrument is difficult to purchase or sell. If a derivative
                  transaction is particularly large or if the relevant market is
           illiquid (as is the case with many privately negotiated
                  derivatives), it may not be possible to initiate a transaction
     or liquidate a position at an advantageous price.

            -- Leverage Risk. Since many derivatives have a leverage
           component, adverse changes in the value or level of the
        underlying asset, rate or index can result in a loss
         substantially greater than the amount invested in the
             derivative itself. In the case of swaps, the risk of loss
                generally is related to a notional principal amount, even if
             the parties have not made any initial investment. Certain
                 derivatives have the potential for unlimited loss, regardless
of the size of the initial investment.      

                -- Risk of Potential Governmental Regulation of Derivatives.
                  Recent legislation and regulatory developments will eventually
     require the clearing and exchange trading of most
                 over-the-counter derivatives investments. It is possible that
            new government regulation of various types of derivative
                  instruments, including futures and swap agreements, may affect
             a Fund's ability to use such instruments as a part of its
investment strategy.                        

                -- Other Risks. Other risks in using derivatives include the
               risk of mispricing or improper valuation of derivatives and
            the inability of derivatives to correlate perfectly with
              underlying assets, rates and indices. Many derivatives, in
                particular privately negotiated derivatives, are complex and
                often valued subjectively. Improper valuations can result in
              increased cash payment requirements to counterparties or a
                loss of value to a Fund. Derivatives do not always perfectly
              or even highly correlate or track the value of the assets,
        rates or indices they are designed to closely track.
                  Consequently, a Fund's use of derivatives may not always be an
                effective means of, and sometimes could be counterproductive
   to, furthering the Fund's investment objective.

Use of Options, Futures, Forwards and Swaps by a Fund                           
-----------------------------------------------------                           

          - Forward Currency Exchange Contracts. A forward currency exchange
contract is an obligation by one party to buy, and the other party to sell, a   
specific amount of a currency for an agreed upon price at a future date. A      
forward currency exchange contract may result in the delivery of the underlying 
asset upon maturity of the contract in return for the agreed upon payment. NDFs 
specify a cash payment upon maturity. NDFs are normally used when the market for
physical settlement of the currency is underdeveloped, heavily regulated or     
highly taxed.                                                                   

     A Fund may, for example, enter into forward currency exchange
contracts to attempt to minimize the risk to the Fund from adverse changes in   
the relationship between the U.S. Dollar and other currencies. A Fund may       
purchase or sell forward currency exchange contracts for hedging purposes       
similar to those described below in connection with its transactions in foreign 
currency futures contracts. A Fund may also purchase or sell forward currency   
exchange contracts for non-hedging purposes as a means of making direct         
investments in foreign currencies, as described below under "Currency           
Transactions".                                                                  

          If a hedging transaction in forward currency exchange contracts is
successful, the decline in the value of portfolio securities or the increase in 
the cost of securities to be acquired may be offset, at least in part, by       
profits on the forward currency exchange contract. Nevertheless, by entering    
into such forward currency exchange contracts, a Fund may be required to forego 
all or a portion of the benefits which otherwise could have been obtained from  
favorable movements in exchange rates.                                          

          A Fund may also use forward currency exchange contracts to seek to
increase total return when AllianceBernstein L.P., the Fund's adviser (the      
"Adviser"), anticipates that a foreign currency will appreciate or depreciate in
value but securities denominated in that currency are not held by the Fund and  
do not present attractive investment opportunities. For example, a Fund may     
enter into a foreign currency exchange contract to purchase a currency if the   
Adviser expects the currency to increase in value. The Fund would recognize a   
gain if the market value of the currency is more than the contract value of the 
currency at the time of settlement of the contract. Similarly, a Fund may enter 
into a foreign currency exchange contract to sell a currency if the Adviser     
expects the currency to decrease in value. The Fund would recognize a gain if   
the market value of the currency is less than the contract value of the currency
at the time of settlement of the contract.                                      

          The cost of engaging in forward currency exchange contracts varies
with such factors as the currencies involved, the length of the contract period 
and the market conditions then prevailing. Since transactions in foreign        
currencies are usually conducted on a principal basis, no fees or commissions   
are involved.                                                                   

           - Options on Securities. A Fund may write and purchase call and put
options on securities. In purchasing an option on securities, a 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, 
a 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 a Fund were permitted to expire without being   
sold or exercised, its premium would represent a loss to the Fund.              

            A Fund may write a put or call option in return for a premium, which
is retained by the Fund whether or not the option is exercised. A Fund may write
covered options or uncovered options. A call option written by a Fund is        
"covered" if the Fund owns the underlying security, has an absolute and         
immediate right to acquire that security upon conversion or exchange of another 
security it holds, or holds a call option on the underlying security with an    
exercise price equal to or less than of the call option it has written. A put   
option written by a Fund is covered if the Fund holds a put option on the       
underlying securities with an exercise price equal to or greater than of the put
option it has written. Uncovered options or "naked options" are riskier than    
covered options. For example, if a Fund wrote a naked call option and the price 
of the underlying security increased, the Fund would have to purchase the       
underlying security for delivery to the call buyer and sustain a loss equal to  
the difference between the option price and the market price of the security.   

          A Fund may also, as an example, write combinations of put and call
options on the same security, known as "straddles," with the same exercise and  
expiration date. By writing a straddle, the Fund undertakes a simultaneous      
obligation to sell and purchase the same security in the event that one of the  
options is exercised. If the price of the security subsequently rises above the 
exercise price, the call will likely be exercised and the Fund will be required 
to sell the underlying security at or below market price. This loss may be      
offset, however, in whole or part, by the premiums received on the writing of   
the two options. Conversely, if the price of the security declines by a         
sufficient amount, the put will likely be exercised. The writing of straddles   
will likely be effective, therefore, only where the price of the security       
remains stable and neither the call nor the put is exercised. In those instances
where one of the options is exercised, the loss on the purchase or sale of the  
underlying security may exceed the amount of the premiums received.             

         By writing a call option, a Fund limits its opportunity to profit
from any increase in the market value of the underlying security above the      
exercise price of the option. By writing a put option, a Fund assumes the risk  
that it may be required to purchase the underlying security for an exercise     
price above its then current market value, resulting in a capital loss unless   
the security subsequently appreciates in value. Where options are written for   
hedging purposes, such transactions constitute only a partial hedge against     
declines in the value of portfolio securities or against increases in the value 
of securities to be acquired, up to the amount of the premium. A Fund may       
purchase put options to hedge against a decline in the value of portfolio       
securities. If such decline occurs, the put options will permit the Fund to sell
the securities at the exercise price or to close out the options at a profit. By
using put options in this way, the Fund will reduce any profit it might         
otherwise have realized on the underlying security by the amount of the premium 
paid for the put option and by transaction costs.                               

          A Fund may purchase or write options on securities of the types in
which it is permitted to invest in privately negotiated (i.e., over-the-counter)
transactions. A Fund will effect such transactions only with investment dealers 
and other financial institutions (such as commercial banks or savings and loan  
institutions) deemed creditworthy by the Adviser, and the Adviser has adopted   
procedures for monitoring the creditworthiness of such entities. A Fund may     
purchase or write options on securities of the types in which they are permitted
to invest in privately negotiated (i.e., over-the-counter) transactions. By     
writing a call option, the Fund limits its opportunity to profit from any       
increase in the market value of the underlying security above the exercise price
of the option. By writing a put option, the Fund assumes the risk that it may be
required to purchase the underlying security for an exercise price above its    
then current market value, resulting in a capital loss unless the security      
subsequently appreciates in value. Where options are written for hedging        
purposes, such transactions constitute only a partial hedge against declines in 
the value of portfolio securities or against increases in the value of          
securities to be acquired, up to the amount of the premium. The Fund may        
purchase put options to hedge against a decline in the value of portfolio       
securities. If such decline occurs, the put options will permit the Fund to sell
the securities at the exercise price or to close out the options at a profit. By
using put options in this way, the Fund will reduce any profit it might         
otherwise have realized on the underlying security by the amount of the premium 
paid for the put option and by transaction costs.                               

            A Fund may purchase call options to hedge against an increase in the
price of securities that the Fund anticipates purchasing in the future. If such 
increase occurs, the call option will permit the Fund to purchase the securities
at the exercise price, or to close out the options at a profit. The premium paid
for the call option plus any transaction costs will reduce the benefit, if any, 
realized by the Fund upon exercise of the option, and, unless the price of the  
underlying security rises sufficiently, the option may expire worthless to the  
Fund and the Fund will suffer a loss on the transaction to the extent of the    
premium paid.                                                                   

         A Fund will effect such transactions only with investment dealers
and other financial institutions (such as commercial banks or savings and loan  
institutions) deemed creditworthy by the Adviser, and the Adviser has adopted   
procedures for monitoring the creditworthiness of such entities. Options        
purchased or written in negotiated transactions may be illiquid and it may not  
be possible for the Fund to effect a closing transaction at a time when the     
Adviser believes it would be advantageous to do so.                             

           --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.     

          A Fund may write (sell) call and put options and purchase call and
put options on securities indices. If a Fund purchases put options on securities
indices to hedge its investments against a decline in the value of portfolio    
securities, it will seek to offset a decline in the value of securities it owns 
through appreciation of the put option. If the value of the Fund's investments  
does not decline as anticipated, or if the value of the option does not         
increase, the Fund's loss will be limited to the premium paid for the option.   
The success of this strategy will largely depend on the accuracy of the         
correlation between the changes in value of the index and the changes in value  
of the Fund's security holdings.                                                

           The purchase of call options on securities indices may be used by a
Fund to attempt to reduce the risk of missing a broad market advance, or an     
advance in an industry or market segment, at a time when the Fund holds         
uninvested cash or short-term debt securities awaiting investment. When         
purchasing call options for this purpose, the Fund will also bear the risk of   
losing all or a portion of the premium paid if the value of the index does not  
rise. The purchase of call options on stock indices when a Fund is substantially
fully invested is a form of leverage, up to the amount of the premium and       
related transaction costs, and involves risks of loss and of increased          
volatility similar to those involved in purchasing call options on securities   
the Fund owns.                                                                  

      --Options on Foreign Currencies. A Fund may purchase and write
options on foreign currencies for hedging purposes. For example, a decline in   
the dollar value of a foreign currency in which portfolio securities are        
denominated will reduce the dollar value of such securities, even if their value
in the foreign currency remains constant. In order to protect against such      
diminutions in the value of portfolio securities, the Fund may purchase put     
options on the foreign currency. If the value of the currency does decline, the 
Fund will have the right to sell such currency for a fixed amount in dollars and
could thereby offset, in whole or in part, the adverse effect on its portfolio  
which otherwise would have resulted.                                            

           Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the  
cost of such securities, a Fund may purchase call options thereon. The purchase 
of such options could offset, at least partially, the effects of the adverse    
movements in exchange rates. As in the case of other types of options, however, 
the benefit to the Fund from purchases of foreign currency options will be      
reduced by the amount of the premium and related transaction costs. In addition,
where currency exchange rates do not move in the direction or to the extent     
anticipated, the Fund could sustain losses on transactions in foreign currency  
options which would require it to forego a portion or all of the benefits of    
advantageous changes in such rates.                                             

           A Fund may write options on foreign currencies for hedging purposes
or to increase return. For example, where a Fund anticipates a decline in the   
dollar value of foreign-denominated securities due to adverse fluctuations in   
exchange rates it could, instead of purchasing a put option, write a call option
on the relevant currency. If the expected decline occurs, the option will most  
likely not be exercised, and the diminution in value of portfolio securities    
could be offset by the amount of the premium received.                          

          Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a Fund    
could write a put option on the relevant currency, which, if rates move in the  
manner projected, will expire unexercised and allow the Fund to hedge such      
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only 
a partial hedge up to the amount of the premium, and only if rates move in the  
expected direction. If this does not occur, the option may be exercised and the 
Fund will be required to purchase or sell the underlying currency at a loss     
which may not be offset by the amount of the premium. Through the writing of    
options on foreign currencies, the Fund also may be required to forego all or a 
portion of the benefits that might otherwise have been obtained from favorable  
movements in exchange rates.                                                    

       In addition to using options for the hedging purposes described
above, a Fund may also invest in options on foreign currencies for non-hedging  
purposes as a means of making direct investments in foreign currencies. A Fund  
may use options on currency to seek to increase total return when the Adviser   
anticipates that a foreign currency will appreciate or depreciate in value but  
securities denominated in that currency are not held by the Fund and do not     
present attractive investment opportunities. For example, the Fund may purchase 
call options in anticipation of an increase in the market value of a currency. A
Fund would ordinarily realize a gain if, during the option period, the value of 
such currency exceeded the sum of the exercise price, the premium paid and      
transaction costs. Otherwise, the Fund would realize no gain or a loss on the   
purchase of the call option. Put options may be purchased by a Fund for the     
purpose of benefiting from a decline in the value of a currency that the Fund   
does not own. A Fund would normally realize a gain if, during the option period,
the value of the underlying currency decreased below the exercise price         
sufficiently to more than cover the premium and transaction costs. Otherwise,   
the Fund would realize no gain or loss on the purchase of the put option. For   
additional information on the use of options on foreign currencies for          
non-hedging purposes, see "Currency Transactions" below.                        

Special Risks Associated with Options on Currency. An   
exchange-traded options position may be closed out only on an options exchange  
that provides a secondary market for an option of the same series. Although a   
Fund will generally purchase or sell options for which there appears to be an   
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time. For
some options, no secondary market on an exchange may exist. In such event, it   
might not be possible to effect closing transactions in particular options, with
the result that the Fund would have to exercise its options in order to realize 
any profit and would incur transaction costs on the sale of the underlying      
currency.                                                                       

     --Futures Contracts and Options on Futures Contracts. Futures
contracts that a Fund may buy and sell may include futures contracts on         
fixed-income or other securities, and contracts based on interest rates, foreign
currencies or financial indices, including any index of U.S. Government         
securities. A Fund may, for example, purchase or sell futures contracts and     
options thereon to hedge against changes in interest rates, securities (through 
index futures or options) or currencies.                                        

         Interest rate futures contracts are purchased or sold for hedging
purposes to attempt to protect against the effects of interest rate changes on a
Fund's current or intended investments in fixed-income securities. For example, 
if a Fund owned long-term bonds and interest rates were expected to increase,   
that Fund might sell interest rate futures contracts. Such a sale would have    
much the same effect as selling some of the long-term bonds in that Fund's      
portfolio. However, since the futures market is more liquid than the cash       
market, the use of interest rate futures contracts as a hedging technique allows
a Fund to hedge its interest rate risk without having to sell its portfolio     
securities. If interest rates were to increase, the value of the debt securities
in the portfolio would decline, but the value of that Fund's interest rate      
futures contracts would be expected to increase at approximately the same rate, 
thereby keeping the net asset value ("NAV") of that Fund from declining as much 
as it otherwise would have. On the other hand, if interest rates were expected  
to decline, interest rate futures contracts could be purchased to hedge in      
anticipation of subsequent purchases of long-term bonds at higher prices.       
Because the fluctuations in the value of the interest rate futures contracts    
should be similar to those of long-term bonds, a Fund could protect itself      
against the effects of the anticipated rise in the value of long-term bonds     
without actually buying them until the necessary cash becomes available or the  
market has stabilized. At that time, the interest rate futures contracts could  
be liquidated and that Fund's cash reserves could then be used to buy long-term 
bonds on the cash market.                                                       

           A Fund may purchase and sell foreign currency futures contracts for
hedging purposes in order to protect against fluctuations in currency exchange  
rates. Such fluctuations could reduce the dollar value of portfolio securities  
denominated in foreign currencies, or increase the cost of foreign-denominated  
securities to be acquired, even if the value of such securities in the          
currencies in which they are denominated remains constant. A Fund may sell      
futures contracts on a foreign currency, for example, when it holds securities  
denominated in such currency and it anticipates a decline in the value of such  
currency relative to the dollar. If such a decline were to occur, the resulting 
adverse effect on the value of foreign-denominated securities may be offset, in 
whole or in part, by gains on the futures contracts. However, if the value of   
the foreign currency increases relative to the dollar, a Fund's loss on the     
foreign currency futures contract may or may not be offset by an increase in the
value of the securities because a decline in the price of the security stated in
terms of the foreign currency may be greater than the increase in value as a    
result of the change in exchange rates.                                         

          Conversely, a Fund could protect against a rise in the dollar cost
of non-U.S. Dollar-denominated securities to be acquired by purchasing futures  
contracts on the relevant currency, which could offset, in whole or in part, the
increased cost of such securities resulting from a rise in the dollar value of  
the underlying currencies. When a Fund purchases futures contracts under such   
circumstances, however, and the price in dollars of securities to be acquired   
instead declines as a result of appreciation of the dollar, the Fund will       
sustain losses on its futures position which could reduce or eliminate the      
benefits of the reduced cost of portfolio securities to be acquired.            

       A Fund may also engage in currency "cross hedging" when, in the
opinion of the Adviser, the historical relationship among foreign currencies    
suggests that a Fund may achieve protection against fluctuations in currency    
exchange rates similar to that described above at a reduced cost through the use
of a futures contract relating to a currency other than the U.S. Dollar or the  
currency in which the foreign security is denominated. Such "cross hedging" is  
subject to the same risks as those described above with respect to an           
unanticipated increase or decline in the value of the subject currency relative 
to the U.S. Dollar.                                                             

          A Fund may also use foreign currency futures contracts and options
on such contracts for non-hedging purposes. Similar to options on currencies    
described above, a Fund may use foreign currency futures contracts and options  
on such contracts to seek to increase total return when the Adviser anticipates 
that a foreign currency will appreciate or depreciate in value but securities   
denominated in that currency are not held by the Fund and do not present        
attractive investment opportunities. The risks associated with foreign currency 
futures contracts and options on futures are similar to those associated with   
options on foreign currencies, as described above. For additional information on
the use of options on foreign currencies for non-hedging purposes, see "Currency
Transactions" below.                                                            

          Purchases or sales of stock or bond index futures contracts may be
used for hedging purposes to attempt to protect a Fund's current or intended    
investments from broad fluctuations in stock or bond prices. For example, a Fund
may sell stock or bond index futures contracts in anticipation of or during a   
market decline to attempt to offset the decrease in market value of the Fund's  
portfolio securities that might otherwise result. If such decline occurs, the   
loss in value of portfolio securities may be offset, in whole or part, by gains 
on the futures position. When a Fund is not fully invested in the securities    
market and anticipates a significant market advance, it may purchase stock or   
bond index futures contracts in order to gain rapid market exposure that may, in
whole or in part, offset increases in the cost of securities that the Fund      
intends to purchase. As such purchases are made, the corresponding positions in 
stock or bond index futures contracts will be closed out.                       

          Each Fund has claimed an exclusion from the definition of the term
"commodity pool operator" under the Commodity Exchange Act and therefore is not 
subject to registration or regulation as a pool operator under that Act.        

           Options on futures contracts are options that call for the delivery
of futures contracts upon exercise. Options on futures contracts written or     
purchased by a Fund will be traded on U.S. exchanges.                           

        The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities in a Fund's portfolio. 
If the futures price at expiration of the option is below the exercise price, a 
Fund will retain the full amount of the option premium, which provides a partial
hedge against any decline that may have occurred in the Fund's portfolio        
holdings. The writing of a put option on a futures contract constitutes a       
partial hedge against increasing prices of the securities or other instruments  
required to be delivered under the terms of the futures contract. If the futures
price at expiration of the put option is higher than the exercise price, a Fund 
will retain the full amount of the option premium, which provides a partial     
hedge against any increase in the price of securities which the Fund intends to 
purchase. If a put or call option a Fund has written is exercised, the Fund will
incur a loss which will be reduced by the amount of the premium it receives.    
Depending on the degree of correlation between changes in the value of its      
portfolio securities and changes in the value of its options on futures         
positions, a Fund's losses from exercised options on futures may to some extent 
be reduced or increased by changes in the value of portfolio securities.        

    A Fund may purchase options on futures contracts for hedging
purposes instead of purchasing or selling the underlying futures contracts. For 
example, where a decrease in the value of portfolio securities is anticipated as
a result of a projected market-wide decline or changes in interest or exchange  
rates, a Fund could, in lieu of selling futures contracts, purchase put options 
thereon. In the event that such decrease were to occur, it may be offset, in    
whole or part, by a profit on the option. If the anticipated market decline were
not to occur, the Fund will suffer a loss equal to the price of the put. Where  
it is projected that the value of securities to be acquired by a Fund will      
increase prior to acquisition due to a market advance or changes in interest or 
exchange rates, a Fund could purchase call options on futures contracts, rather 
than purchasing the underlying futures contracts. If the market advances, the   
increased cost of securities to be purchased may be offset by a profit on the   
call. However, if the market declines, the Fund will suffer a loss equal to the 
price of the call, but the securities that the Fund intends to purchase may be  
less expensive.                                                                 

         - Credit Default Swap Agreements. The "buyer" in a credit default
swap contract is obligated to pay the "seller" a periodic stream of payments    
over the term of the contract in return for a contingent payment upon the       
occurrence of a credit event with respect to an underlying reference obligation.
Generally, a credit event means bankruptcy, failure to pay, obligation          
acceleration or modified restructuring. A 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   
five years, provided that no credit event occurs. If a credit event occurs, the 
Fund typically must pay the contingent payment to the buyer, which is typically 
the "par value" (full notional value) of the reference obligation. The          
contingent payment may be a cash settlement or by physical delivery of the      
reference obligation in return for payment of the face amount of the obligation.
The value of the reference obligation received by the Fund as a seller if a     
credit event occurs, coupled with the periodic payments previously received, may
be less than the full notional value it pays to the buyer, resulting in a loss  
of value to the Fund. 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 a Fund had
invested in the reference obligation directly. Credit default swaps are subject 
to general market risk, liquidity risk and credit risk.                         

          - Currency Swaps. A Fund may enter into currency swaps for hedging
purposes in an attempt to protect against adverse changes in exchange rates     
between the U.S. Dollar and other currencies or for non-hedging purposes as a   
means of making direct investments in foreign currencies, as described below    
under "Currency Transactions". Currency swaps involve the exchange by the Fund  
with another party of a series of payments in specified currencies. Actual      
principal amounts of currencies may be exchanged by the counterparties at the   
initiation and again upon termination of the transaction. Since currency swaps  
are individually negotiated, the Fund expects to achieve an acceptable degree of
correlation between its portfolio investments and its currency swaps positions. 
Therefore the entire principal value of a currency swap is subject to the risk  
that the other party to the swap will default on its contractual delivery       
obligations. With respect to Intermediate Bond, the Fund will not enter into any
currency swap unless the credit quality of the unsecured senior debt or the     
claims-paying ability of the other party thereto is rated in the highest rating 
category of at least one nationally recognized statistical rating organization  
at the time of entering into the transaction. If there is a default by the other
party to such a transaction, a Fund will have contractual remedies pursuant to  
the agreements related to the transactions.                                     

           --Swaps: Interest Rate Transactions. A Fund may enter into interest
rate swap, swaptions and cap or floor transactions, which may include preserving
a return or spread on a particular investment or portion of its portfolio or    
protecting against an increase in the price of securities the Fund anticipates  
purchasing at a later date. Unless there is a counterparty default, the risk of 
loss to a Fund from interest rate 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 transaction defaults, the Fund's risk of loss  
consists of the net amount of interest payments that the Fund is contractually  
entitled to receive.                                                            

       Interest rate swaps involve the exchange by a 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) computed based on a 
contractually-based principal (or "notional") amount.                           

      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.                                          

        Interest rate caps and floors are similar to options in that the
purchase of an interest rate cap or floor entitles the purchaser, to the extent 
that a specified index exceeds (in the case of a cap) or falls below (in the    
case of a floor) a predetermined interest rate, to receive payments of interest 
on a notional amount from the party selling the interest rate cap or floor.     

         Caps and floors are less liquid than swaps. These transactions do
not involve the delivery of securities or other underlying assets or principal. 
A Fund will enter into interest rate swap, swaptions, cap or floor transactions 
only with counterparties who have credit ratings of at least A- (or the         
equivalent) from any one NRSRO or counterparties with guarantors with debt      
securities having such a rating.                                                

           - 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 is expected to increase if unexpected 
inflation increases.                                                            

         - Total Return Swaps. A Fund may enter into total return swaps in
order to take a "long" or "short" position with respect to an underlying        
referenced asset. The Fund is subject to market price volatility of the         
underlying referenced asset. A total return swap involves commitments to pay    
interest in exchange for a market linked return based on a notional amount. To  
the extent that the total return of the security group of securities or index   
underlying the transaction exceeds or falls short of the offsetting interest    
obligation, the Fund will receive a payment from or make a payment to the       
counterparty.                                                                   

           Special Risks Associated with Swaps. Risks may arise as a result of
the failure of the counterparty to the swap contract to comply with the terms of
the swap contract. The loss incurred by the failure of a counterparty is        
generally limited to the net interim payment to be received by a Fund, and/or   
the termination value at the end of the contract. Therefore, the Fund considers 
the creditworthiness of each counterparty to a swap contract in evaluating      
potential counterparty risk. The risk is mitigated by having a netting          
arrangement between the Fund and the counterparty and by the posting of         
collateral by the counterparty to the Fund to cover the Fund's exposure to the  
counterparty. Additionally, risks may arise from unanticipated movements in     
interest rates or in the value of the underlying securities. The Fund accrues   
for the interim payments on swap contracts on a daily basis, with the net amount
recorded within unrealized appreciation/depreciation of swap contracts on the   
statement of assets and liabilities. Once the interim payments are settled in   
cash, the net amount is recorded as realized gain/(loss) on swaps on the        
statement of operations, in addition to any realized gain/(loss) recorded upon  
the termination of swap contracts. Fluctuations in the value of swap contracts  
are recorded as a component of net change in unrealized                         
appreciation/depreciation of swap contracts on the statement of operations.     

        - Eurodollar Instruments. Eurodollar instruments are essentially
U.S. Dollar-denominated futures contracts or options thereon that are linked to 
the London Interbank Offered Rate and are subject to the same limitations and   
risks as other futures contracts and options.                                   

- Currency Transactions. A Fund may invest in non-U.S.  
Dollar-denominated securities on a currency hedged or un-hedged basis. The      
Adviser will actively manage the Fund's currency exposures and may seek         
investment opportunities by taking long or short positions in currencies through
the use of currency-related derivatives, including forward currency exchange    
contracts, futures and options on futures, swaps and options. The Adviser may   
enter into transactions for investment opportunities when it anticipates that a 
foreign currency will appreciate or depreciate in value but securities          
denominated in that currency are not held by the Fund and do not present        
attractive investment opportunities. Such transactions may also be used when the
Adviser believes that it may be more efficient than a direct investment in a    
foreign currency-denominated security. The Funds may also conduct currency      
exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing  
in the currency exchange market for buying or selling currencies).              

Forward Commitments and When-Issued and Delayed Delivery Securities             
-------------------------------------------------------------------             

      Forward commitments for the purchase or sale of securities may
include purchases on a "when-issued" basis or purchases or sales on a "delayed  
delivery" basis. In some cases, a forward commitment may be conditioned upon the
occurrence of a subsequent event, such as approval and consummation of a merger,
corporate reorganization or debt restructuring (i.e., a "when, as and if issued"
trade). When forward commitment transactions are negotiated, the price is fixed 
at the time the commitment is made. The Fund assumes the rights and risks of    
ownership of the security, but does not pay for the securities until they are   
received. If a Fund is fully or almost fully invested when forward commitment   
purchases are outstanding, such purchases may result in a form of leverage.     
Leveraging the portfolio in this manner may increase the Fund's volatility of   
returns.                                                                        

           When-issued securities and forward commitments may be sold prior to
the settlement date. If the Fund chooses to dispose of the right to acquire a   
when-issued security prior to its acquisition or dispose of its right to deliver
or receive against a forward commitment, it may incur a gain or loss. Any       
significant commitment of Fund assets to the purchase of securities on a "when, 
as and if issued" basis may increase the volatility of the Fund's NAV.          

        The use of forward commitments enables a Fund to protect against
anticipated changes in exchange rates, interest rates and/or prices. For        
instance, a Fund may enter into a forward contract when it enters into a        
contract for the purchase or sale of a security denominated in a foreign        
currency in order to "lock in" the U.S. Dollar price of the security            
("transaction hedge"). In addition, when a Fund believes that a foreign currency
may suffer a substantial decline against the U.S. Dollar, it may enter into a   
forward sale contract to sell an amount of that foreign currency approximating  
the value of some or all of that Fund's securities denominated in such foreign  
currency, or when the Fund believes that the U.S. Dollar may suffer a           
substantial decline against a foreign currency, it may enter into a forward     
purchase contract to buy that foreign currency for a fixed dollar amount        
("position hedge"). If the Adviser were to forecast incorrectly the direction of
exchange rate movements, a Fund might be required to complete such when-issued  
or forward transactions at prices inferior to the then current market values.   

Forward commitments include "To be announced" ("TBA")   
mortgage-backed securities, which are contracts for the purchase or sale of     
mortgage-backed securities to be delivered at a future agreed-upon date, whereby
the specific mortgage pool number or the number of pools that will be delivered 
to fulfill the trade obligation or terms of the contract are unknown at the time
of the trade. Subsequent to the time of the trade, a mortgage pool or pools     
guaranteed by the Government National Mortgage Association, or GNMA, the Federal
National Mortgage Association, or FNMA, or the Federal Home Loan Mortgage       
Association, or FHLMC (including fixed rate or variable rate mortgages) are     
allocated to the TBA mortgage-backed securities transactions.                   

         At the time a Fund intends to enter into a forward commitment, it
will record the transaction and thereafter reflect the value of the security    
purchased or, if a sale, the proceeds to be received, in determining its NAV.   
Any unrealized appreciation or depreciation reflected in such valuation of a    
"when, as and if issued" security would be canceled in the event that the       
required conditions did not occur and the trade was canceled.                   

            Purchases of securities on a forward commitment or when-issued basis
may involve more risk than other types of purchases. For example, by committing 
to purchase securities in the future, a Fund subjects itself to a risk of loss  
on such commitments as well as on its portfolio securities. Also, a Fund may    
have to sell assets which have been set aside in order to meet redemptions. In  
addition, if a Fund determines it is advisable as a matter of investment        
strategy to sell the forward commitment or "when-issued" or "delayed delivery"  
securities before delivery, that Fund may incur a gain or loss because of market
fluctuations since the time the commitment to purchase such securities was made.
Any such gain or loss would be treated as a capital gain or loss for tax        
purposes. When the time comes to pay for the securities to be purchased under a 
forward commitment or on a "when-issued" or "delayed delivery" basis, the Fund  
will meet its obligations from the then available cash flow or the sale of      
securities, or, although it would not normally expect to do so, from the sale of
the forward commitment or "when-issued" or "delayed delivery" securities        
themselves (which may have a value greater or less than the Fund's payment      
obligation). No interest or dividends accrue to the purchaser prior to the      
settlement date for securities purchased or sold under a forward commitment. In 
addition, in the event the other party to the transaction files for bankruptcy, 
becomes insolvent, or defaults on its obligation, a Fund may be adversely       
affected.                                                                       

Illiquid Securities                                                             
-------------------                                                             

          A Fund will not invest in illiquid securities if immediately after
such investment more than 15% or such other amount permitted by guidance        
regarding the 1940 Act of the Fund's net assets would be invested in such       
securities. For this purpose, illiquid securities include, among others, (a)    
direct placements or other securities which are subject to legal or contractual 
restrictions on resale or for which there is no readily available market (e.g., 
trading in the security is suspended or, in the case of unlisted securities,    
market makers do not exist or will not entertain bids or offers), (b) options   
purchased by the Fund over-the-counter and the cover for options written by the 
Fund over-the-counter, and (c) repurchase agreements not terminable within seven
days. Securities that have legal or contractual restrictions on resale but have 
a readily available market are not deemed illiquid for purposes of this         
limitation.                                                                     

  Mutual funds do not typically hold a significant amount of
restricted securities (securities that are subject to restrictions on resale to 
the general public) or other illiquid securities because of the potential for   
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund   
might be unable to dispose of restricted or other illiquid securities promptly  
or at reasonable prices and might thereby experience difficulty satisfying      
redemptions within seven days. A mutual fund may also have to take certain steps
or wait a certain amount of time in order to remove the transfer restrictions   
for such restricted securities in order to dispose of them, resulting in        
additional expense and delay.                                                   

   Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act") allows a broader institutional trading market for securities  
otherwise subject to restriction on resale to the general public. Rule 144A     
establishes a "safe harbor" from the registration requirements of the Securities
Act for resales of certain securities to qualified institutional buyers. An     
insufficient number of qualified institutional buyers interested in purchasing  
certain restricted securities held by a Fund, however, could affect adversely   
the marketability of such portfolio securities and the Fund might be unable to  
dispose of such securities promptly or at reasonable prices.                    

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

Investments in Other Investment Companies                                       
-----------------------------------------                                       

            A Fund may invest in securities of other investment companies to the
extent permitted under the 1940 Act or the rules and regulations thereunder (as 
such statute, rules or regulations may be amended from time to time) or by      
guidance regarding, interpretations of, or exemptive orders under, the 1940 Act 
or the rules or regulations thereunder published by appropriate regulatory      
authorities. The Funds intend to invest uninvested cash balances in an          
affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act. If 
the Fund acquires shares in 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. A  
Fund may also invest in exchange-traded funds, subject to the restrictions and  
limitations of the 1940 Act.                                                    

Lending of Portfolio Securities                                                 
-------------------------------                                                 

           A Fund may seek to increase income by lending portfolio securities.
A principal risk in lending portfolio securities, as with other extensions of   
credit, consists of the possible loss of rights in the collateral should the    
borrower fail financially. In addition, a Fund may be exposed to the risk that  
the sale of any collateral realized upon the borrower's default will not yield  
proceeds sufficient to replace the loaned securities. In determining whether to 
lend securities to a particular borrower, the Adviser (subject to oversight by  
the Fund's Directors) will consider all relevant facts and circumstances,       
including the creditworthiness of the borrower. The loans would be made only to 
firms deemed by the Adviser to be of good standing, and when, in the judgment of
the Adviser, the consideration that can be earned currently from securities     
loans of this type justifies the attendant risk. A Fund may lend portfolio      
securities to the extent permitted under the 1940 Act or the rules and          
regulations thereunder (as such statute, rules or regulations may be amended    
from time to time) or by guidance regarding, interpretations of, or exemptive   
orders under, the 1940 Act.                                                     

          Under present regulatory policies, including those of the Board of
Governors of the Federal Reserve System and the Commission, such loans may be   
made only to member firms of the New York Stock Exchange (the "Exchange") and   
will be required to be secured continuously by collateral in cash, cash         
equivalents, or U.S. Treasury Bills maintained on a current basis at an amount  
at least equal to the market value of the securities loaned. A Fund will have   
the right to call a loan and obtain the securities loaned at any time on five   
days' notice. While securities are on loan, the borrower will pay the Fund any  
income from the securities. A Fund may invest any cash collateral in portfolio  
securities and earn additional income or receive an agreed-upon amount of income
from a borrower who has delivered equivalent collateral. Any such investment of 
cash collateral will be subject to the Fund's investment risks.                 

           A Fund will not have the right to vote any securities having voting
rights during the existence of the loan. A Fund will have the right to regain   
record ownership of loaned securities or equivalent securities in order to      
exercise ownership rights such as voting rights, subscription rights and rights 
to dividends, interest, or distributions.                                       

         A Fund may pay reasonable finders', administrative, and custodial
fees in connection with a loan.                                                 

Loan Participations and Assignments                                             
-----------------------------------                                             

            A Fund may invest in fixed or floating rate corporate loans ("Loans"
and each, a "Loan") either by participating as co-lender at the time the loan is
originated ("Participations") or by buying an interest in the loan in the       
secondary market from a financial institution or institutional investor         
("Assignments"). These loans may include "bridge loans", which are loans taken  
out for a short period (typically less than six months) pending arrangement of  
more permanent financing through, for example, the issuance of bonds, frequently
high-yield bonds issued for the purposes of acquisitions. The financial status  
of an institution interposed between a Fund and a borrower may affect the       
ability of the Fund to receive principal and interest payments.                 

         The success of a Fund may depend on the skill with which an agent
bank administers the terms of the corporate loan agreements, monitors borrower  
compliance with covenants, collects principal, interest and fee payments from   
borrowers and, where necessary, enforces creditor remedies against borrowers.   
Agent banks typically have broad discretion in enforcing loan agreements.       

          A Fund's investment in Participations typically will result in the
Fund having a contractual relationship only with the financial institution      
arranging the Loan with the borrower (the "Lender") and not with the borrower   
directly. A Fund will have the right to receive payments of principal, interest 
and any fees to which it is entitled only from the Lender selling the           
Participation and only upon receipt by the Lender of the payments from the      
borrower. In connection with purchasing Participations, the Fund generally will 
have no right to enforce compliance by the borrower with the terms of the loan  
agreement relating to the Loan, nor any rights of set-off against the borrower, 
and the Fund may not directly benefit from any collateral supporting the Loan in
which it has purchased the Participation. As a result, the Fund may be subject  
to the credit risk of both the borrower and the Lender that is selling the      
Participation. In the event of the insolvency of the Lender selling a           
Participation, the Fund may be treated as a general creditor of the Lender and  
may not benefit from any set-off between the Lender and the borrower. Certain   
Participations may be structured in a manner designed to avoid purchasers of    
Participations being subject to the credit risk of the Lender with respect to   
the Participation; but even under such a structure, in the event of the Lender's
insolvency, the Lender's servicing of the Participation may be delayed and the  
assignability of the Participation impaired. A Fund will acquire Participations 
only if the Lender interpositioned between the Fund and the borrower is a Lender
having total assets of more than $25 billion and whose senior unsecured debt is 
rated investment grade or higher.                                               

      When a Fund purchases Assignments from Lenders it will acquire
direct rights against the borrower on the Loan. Because Assignments are arranged
through private negotiations between potential assignees and potential          
assignors, however, the rights and obligations acquired by the Fund as the      
purchaser of an assignment may differ from, and be more limited than, those held
by the assigning Lender. The assignability of certain obligations is restricted 
by the governing documentation as to the nature of the assignee such that the   
only way in which the Fund may acquire an interest in a Loan is through a       
Participation and not an Assignment. A Fund may have difficulty disposing of    
Assignments and Participations because to do so it will have to assign such     
securities to a third party. Because there is no liquid market for such         
securities, the Fund anticipates that such securities could be sold only to a   
limited number of institutional investors. The lack of a liquid secondary market
may have an adverse impact on the value of such securities and the Fund's       
ability to dispose of particular Assignments or Participations when necessary to
meet the Fund's liquidity needs in response to a specific economic event such as
a deterioration in the creditworthiness of the borrower. The lack of a liquid   
secondary market for Assignments and Participations also may make it more       
difficult for the Fund to assign a value to these securities for purposes of    
valuing the Fund's portfolio and calculating its asset value.                   

Mortgage-Related Securities and Other Asset-Backed Securities                   
-------------------------------------------------------------                   

            The mortgage-related securities in which a Fund may invest typically
are securities representing interests in pools of mortgage loans made by lenders
such as savings and loan associations, mortgage bankers and commercial banks and
are assembled for sale to investors (such as the Funds) by governmental,        
government-related or private organizations. Private organizations include      
commercial banks, savings associations, mortgage companies, investment banking  
firms, finance companies, special purpose finance entities (called special      
purpose vehicles or SPVs) and other entities that acquire and package loans for 
resales as mortgage-related securities. Specifically, these securities may      
include pass-through mortgage-related securities, collateralized mortgage       
obligations ("CMOs"), CMO residuals, adjustable-rate mortgage securities        
("ARMS"), stripped mortgage-backed securities ("SMBSs"), commercial             
mortgage-backed securities, TBA mortgage-backed securities, mortgage dollar     
rolls, collateralized obligations and other securities that directly or         
indirectly represent a participation in or are secured by and payable from      
mortgage loans on real property and other assets.                               

       Pass-Through Mortgage-Related Securities. Interests in pools of
mortgage-related securities differ from other forms of debt securities, which   
normally provide for periodic payment of interest in fixed amounts with         
principal payments at maturity or specified call dates. Instead, these          
securities provide a monthly payment consisting of both interest and principal  
payments. In effect, these payments are a "pass-through" of the monthly payments
made by the individual borrowers on their residential mortgage loans, net of any
fees paid to the issuer or guarantor of such securities. Additional payments are
caused by repayments of principal resulting from the sale of the underlying     
residential property, refinancing or foreclosure, net of fees or costs that may 
be incurred. Some mortgage-related securities, such as securities issued by     
GNMA, are described as "modified pass-through." These securities entitle the    
holder to receive all interest and principal payments owed on the mortgage pool,
net of certain fees, regardless of whether or not the mortgagor actually makes  
the payment.                                                                    

            The average life of pass-through pools varies with the maturities of
the underlying mortgage instruments. In addition, a pool's term may be shortened
by unscheduled or early payments of principal and interest on the underlying    
mortgages. The occurrence of mortgage prepayments is affected by factors        
including the level of interest rates, general economic conditions, the location
and age of the mortgage and other social and demographic conditions. As         
prepayment rates of individual pools vary widely, it is not possible to         
accurately predict the average life of a particular pool. For pools of          
fixed-rate 30-year mortgages, common industry practice is to assume that        
prepayments will result in a 12-year average life. Pools of mortgages with other
maturities or different characteristics will have varying average life          
assumptions. The assumed average life of pools of mortgages having terms of less
than 30 years, is less than 12 years, but typically not less than 5 years.      

            Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the 
associated average life assumption. In periods of falling interest rates, the   
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities. Conversely, in periods of rising      
interest rates the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the pool. Historically, actual average life has been     
consistent with the 12-year assumption referred to above. Actual prepayment     
experience may cause the yield to differ from the assumed average life yield.   
Reinvestment of prepayments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of the Fund. The compounding      
effect from reinvestment of monthly payments received by the Fund will increase 
the yield to shareholders compared with bonds that pay interest semi-annually.  

      The principal governmental (i.e., backed by the full faith and
credit of the U.S. Government) guarantor of mortgage-related securities is GNMA.
GNMA is a wholly-owned U.S. Government corporation within the Department of     
Housing and Urban Development. GNMA is authorized to guarantee, with the full   
faith and credit of the U.S. Government, the timely payment of principal and    
interest on securities issued by institutions approved by GNMA (such as savings 
and loan institutions, commercial banks and mortgage bankers) and backed by     
pools of FHA-insured or VA-guaranteed mortgages.                                

            Government-related (i.e., not backed by the full faith and credit of
the U.S. Government) guarantors include FNMA and FHLMC. FNMA and FHLMC are a    
government-sponsored corporation or corporate instrumentality of the U.S.       
Government respectively (government-sponsored entities or "GSEs"), which were   
owned entirely by private stockholders until 2008 when they were placed in      
conservatorship by the U.S. Government. After being placed in conservatorship,  
the GSEs issued senior preferred stock and common stock to the U.S. Treasury in 
an amount equal to 79.9% of each GSE in return for certain funding and liquidity
arrangements. The GSEs continue to operate as going concerns while in           
conservatorship and each remains liable for all of its obligations associated   
with its mortgage-backed securities. The U.S. Treasury has provided additional  
funding to the GSEs and their future is unclear as Congress is considering      
whether to adopt legislation that would severely restrict or even terminate     
their operations. FNMA purchases residential mortgages from a list of approved  
seller/servicers which include state and federally-chartered savings and loan   
associations, mutual savings banks, commercial banks and credit unions and      
mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to   
timely payment of principal and interest by FNMA and are now, in effect, backed 
by the full faith and credit of the U.S. Government. Participation certificates 
issued by FHLMC, which represent interests in mortgages from FHLMC's national   
portfolio, are guaranteed by FHLMC as to the timely payment of interest and     
ultimate collection of principal and are now, in effect, backed by the full     
faith and credit of the U.S. Government.                                        

         Commercial banks, savings and loan associations, private mortgage
insurance companies, mortgage bankers and other secondary market issuers create 
pass-through pools of conventional residential mortgage loans. Securities       
representing interests in pools created by non-governmental private issuers     
generally offer a higher rate of interest than securities representing interests
in pools created by governmental issuers because there are no direct or indirect
governmental guarantees of the underlying mortgage payments. However, private   
issuers sometimes obtain committed loan facilities, lines of credit, letters of 
credit, surety bonds or other forms of liquidity and credit enhancement to      
support the timely payment of interest and principal with respect to their      
securities if the borrowers on the underlying mortgages fail to make their      
mortgage payments. The ratings of such non-governmental securities are generally
dependent upon the ratings of the providers of such liquidity and credit support
and would be adversely affected if the rating of such an enhancer were          
downgraded.                                                                     

        The structuring of the pass-through pool may also provide credit
enhancement. Examples of such credit support arising out of the structure of the
transaction include the issue of senior and subordinated securities (e.g., the  
issuance of securities by a SPV in multiple classes or "tranches", with one or  
more classes being senior to other subordinated classes as to payment of        
principal and interest, with the result that defaults on the underlying mortgage
loans are borne first by the holders of the subordinated class); creation of    
"reserve funds" ( in which case cash or investments sometimes funded from a     
portion of the payments on the underlying mortgage loans, are held in reserve   
against future losses); and "overcollateralization" (in which case the scheduled
payments on, or the principal amount of, the underlying mortgage loans exceeds  
that required to make payment of the securities and pay any servicing or other  
fees). There can be no guarantee the credit enhancements, if any will be        
sufficient to prevent losses in the event of defaults on the underlying mortgage
loans.                                                                          

           In addition, mortgage-related securities that are issued by private
issuers are not subject to the underwriting requirements for the underlying     
mortgages that are applicable to those mortgage-related securities that have a  
government or government-sponsored entity guaranteed. As a result, the mortgage 
loans underlying private mortgage-related securities may, and frequently do,    
have less favorable collateral, credit risk or other underwriting               
characteristics than government or government-sponsored mortgage-related        
securities and have wider variances in a number of terms, including interest    
rate, term, size, purposes and borrower characteristics. Privately issued pools 
more frequently include second mortgages, high loan-to-value mortgages and      
manufactured housing loans. The coupon rates and maturities of the underlying   
mortgage loans in a private-label mortgage-related pool may vary to a greater   
extent than those included in a government guaranteed pool, and the pool may    
include subprime mortgage loans. Subprime loans refer to loans made to borrowers
with weakened credit histories or with a lower capacity to make timely payments 
on their loans. For these reasons, the loans underlying these securities have   
had in many cases higher default rates than those loans that meet government    
underwriting requirements.                                                      

Collateralized Mortgage Obligations. Another form of    
mortgage-related security is a "pay-through" security, which is a debt          
obligation of the issuer secured by a pool of mortgage loans pledged as         
collateral that is legally required to be paid by the issuer, regardless of     
whether payments are actually made on the underlying mortgages. CMOs are the    
predominant type of "pay-through" mortgage-related security. In a CMO, a series 
of bonds or certificates is issued in multiple classes. Each class of a CMO,    
often referred to as a "tranche," is issued at a specific coupon rate and has a 
stated maturity or final distribution date. Principal prepayments on collateral 
underlying a CMO may cause one or more tranches of the CMO to be retired        
substantially earlier than the stated maturities or final distribution dates of 
the collateral. Although payment of the principal of, and interest on, the      
underlying collateral securing privately issued CMOs may be guaranteed by GNMA, 
FNMA or FHLMC, these CMOs represent obligations solely of the private issuer and
are not insured or guaranteed by GNMA, FNMA, FHLMC, any other governmental      
agency or any other person or entity.                                           

Adjustable-Rate Mortgage Securities. Another type of    
mortgage-related security, known as adjustable-rate mortgage securities         
("ARMS"), bears interest at a rate determined by reference to a predetermined   
interest rate or index. ARMS may be secured by fixed-rate mortgages or          
adjustable-rate mortgages. ARMS secured by fixed-rate mortgages generally have  
lifetime caps on the coupon rates of the securities. To the extent that general 
interest rates increase faster than the interest rates on the ARMS, these ARMS  
will decline in value. The adjustable-rate mortgages that secure ARMS will      
frequently have caps that limit the maximum amount by which the interest rate or
the monthly principal and interest payments on the mortgages may increase. These
payment caps can result in negative amortization (i.e., an increase in the      
balance of the mortgage loan). Furthermore, since many adjustable-rate mortgages
only reset on an annual basis, the values of ARMS tend to fluctuate to the      
extent that changes in prevailing interest rates are not immediately reflected  
in the interest rates payable on the underlying adjustable-rate mortgages.      

       Stripped Mortgage-Related Securities. Stripped mortgage-related
securities (SMRS) are mortgage related securities that are usually structured   
with separate classes of securities collateralized by a pool of mortgages or a  
pool of mortgage backed bonds or pass-through securities, with each class       
receiving different proportions of the principal and interest payments from the 
underlying assets. A common type of SMRS has one class of interest-only         
securities (IOs) receiving all of the interest payments from the underlying     
assets and one class of principal-only securities (POs) receiving all of the    
principal payments from the underlying assets. IOs and POs are extremely        
sensitive to interest rate changes and are more volatile than mortgage-related  
securities that are not stripped. IOs tend to decrease in value as interest     
rates decrease and are extremely sensitive to the rate of principal payments    
(including prepayments) on the related underlying mortgage assets, and a rapid  
rate of principal prepayments may have a material adverse effect on the yield to
maturity of the IO class. POs generally increase in value as interest rates     
decrease. If prepayments of the underlying mortgages are greater than           
anticipated, the amount of interest earned on the overall pool will decrease due
to the decreasing principal balance of the assets. Due to their structure and   
underlying cash flows, SMRS may be more volatile than mortgage-related          
securities that are not stripped. Changes in the values of IOs and POs can be   
substantial and occur quickly, such as occurred in the first half of 1994 when  
the value of many POs dropped precipitously due to increases in interest rates. 

   A Fund will only invest in SMRS that are issued by the U.S.
Government, its agencies or instrumentalities and supported by the full faith   
and credit of the U.S. Although SMRS are purchased and sold by institutional    
investors through several investment banking firms acting as brokers or dealers,
the complexity of these instruments and the smaller number of investors in the  
sector can lend to illiquid markets in the sector.                              

         Commercial Mortgage-Backed Securities. Commercial mortgage-backed
securities are securities that represent an interest in, or are secured by,     
mortgage loans secured by multifamily or commercial properties, such as         
industrial and warehouse properties, office buildings, retail space and shopping
malls, and cooperative apartments, hotels and motels, nursing homes, hospitals  
and senior living centers. Commercial mortgage-backed securities have been      
issued in public and private transactions by a variety of public and private    
issuers using a variety of structures, some of which were developed in the      
residential mortgage context, including multi-class structures featuring senior 
and subordinated classes. Commercial mortgage-backed securities may pay fixed or
floating-rates of interest. The commercial mortgage loans that underlie         
commercial mortgage-related securities have certain distinct risk               
characteristics. Commercial mortgage loans generally lack standardized terms,   
which may complicate their structure, tend to have shorter maturities than      
residential mortgage loans and may not be fully amortizing. Commercial          
properties themselves tend to be unique and are more difficult to value than    
single-family residential properties. In addition, commercial properties,       
particularly industrial and warehouse properties, are subject to environmental  
risks and the burdens and costs of compliance with environmental laws and       
regulations.                                                                    

          "To Be Announced" Mortgaged-Backed Securities. TBA mortgage-backed
securities are described in "Derivatives--Forward Commitments and When-Issued   
and Delayed Delivery Securities" above.                                         

           Certain Risks. The value of mortgage-related securities is affected
by a number of factors. Unlike traditional debt securities, which have fixed    
maturity dates, mortgage-related securities may be paid earlier than expected as
a result of prepayments of underlying mortgages. Such prepayments generally     
occur during periods of falling mortgage interest rates. If property owners make
unscheduled prepayments of their mortgage loans, these prepayments will result  
in the early payment of the applicable mortgage-related securities. In that     
event, the Fund may be unable to invest the proceeds from the early payment of  
the mortgage-related securities in investments that provide as high a yield as  
the mortgage-related securities. 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. The
level of general interest rates, general economic conditions and other social   
and demographic factors affect the occurrence of mortgage prepayments. During   
periods of falling interest rates, the rate of mortgage prepayments tends to    
increase, thereby tending to decrease the life of mortgage-related securities.  
Conversely, 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.                      

        As with other fixed-income securities, there is also the risk of
nonpayment of mortgage-related securities, particularly for those securities    
that are backed by mortgage pools that contain subprime loans. Market factors   
adversely affecting mortgage loan repayments include a general economic         
downturn, high unemployment, a general slowdown in the real estate market, a    
drop in the market prices of real estate, or higher mortgage payments required  
to be made by holders of adjustable rate mortgages due to scheduled increases or
increases due to higher interest rates.                                         

           Subordinated mortgage-related securities may have additional risks.
The subordinated mortgage-related security may serve as credit support for the  
senior securities purchased by other investors. In addition, the payments of    
principal and interest on these subordinated securities generally will be made  
only after payments are made to the holders of securities senior to the         
subordinated securities. Therefore, if there are defaults on the underlying     
mortgage loans, the holders of subordinated mortgage-related securities will be 
less likely to receive payments of principal and interest and will be more      
likely to suffer a loss.                                                        

     Commercial mortgage-related securities, like all fixed-income
securities, generally decline in value as interest rates rise. Moreover,        
although generally the value of fixed-income securities increases during periods
of falling interest rates, this inverse relationship is not as marked in the    
case of single-family residential mortgage-related securities, due to the       
increased likelihood of prepayments during periods of falling interest rates,   
and may not be as marked in the case of commercial mortgage-related securities. 
The process used to rate commercial mortgage-related securities may focus on,   
among other factors, the structure of the security, the quality and adequacy of 
collateral and insurance, and the creditworthiness of the originators, servicing
companies and providers of credit support.                                      

       Although the market for mortgage-related securities is becoming
increasingly liquid, those issued by certain private organizations may not be   
readily marketable there may be a limited market for these securities,          
especially when there is a perceived weakness in the mortgage and real estate   
market sectors. In particular, the secondary markets for CMOs, IOs and POs may  
be more volatile and less liquid than those for other mortgage-related          
securities, thereby potentially limiting a Fund's ability to buy or sell those  
securities at any particular time. Without an active trading market,            
mortgage-related securities held in a Fund's portfolio may be particularly      
difficult to value because of the complexities involved in the value of the     
underlying mortgages. In addition, the rating agencies may have difficulties in 
rating commercial mortgage-related securities through different economic cycles 
and in monitoring such ratings on a longer-term basis.                          

As with fixed-income securities generally, the value of 
mortgage-related securities can also be adversely affected by increases in      
general interest rates relative to the yield provided by such securities. Such  
an adverse effect is especially possible with fixed-rate mortgage securities. If
the yield available on other investments rises above the yield of the fixed-rate
mortgage securities as a result of general increases in interest rate levels,   
the value of the mortgage-related securities will decline.                      

 Other Asset-Backed Securities. A 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. For   
example, 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, which 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. These asset-backed securities are 
subject to risks associated with changes in interest rates, prepayment of       
underlying obligations and defaults similar to the risks of investment in       
mortgage-related securities discussed above.                                    

    Each type of asset-backed security also entails unique risks
depending on the type of assets involved and the legal structure used. For      
example, credit card receivables are generally unsecured obligations of the     
credit card holder and the debtors are entitled to the protection of a number of
state and federal consumer credit laws, many of which give such debtors the     
right to set off certain amounts owed on the credit cards, thereby reducing the 
balance due. There have also been proposals to cap the interest rate that a     
credit card issuer may charge. In some transactions, the value of the           
asset-backed security is dependent on the performance of a third party acting as
credit enhancer or servicer. Furthermore, in some transactions (such as those   
involving the securitization of vehicle loans or leases) it may be              
administratively burdensome to perfect the interest of the security issuer in   
the underlying collateral and the underlying collateral may become damaged or   
stolen.                                                                         

Participation in the TALF Program                                               
---------------------------------                                               

          A Fund may invest a portion of its assets through participation in
the Term Asset-Backed Securities Loan Facility program ("TALF Program"), a      
program created by the Board of Governors of the Federal Reserve System (the    
"Federal Reserve") and the U.S. Department of the Treasury to assist the        
securitization markets by supporting the issuance of certain eligible           
collateral, which are investment-grade rated, asset-backed securities such as   
automobile loans, student loans, and credit card loans, as well as receivables  
related to residential mortgage servicing advances or certain commercial        
mortgage-backed securities. The types of eligible collateral may be expanded by 
the Federal Reserve in the future, and among other requirements must at issuance
be rated in the highest investment-grade rating category by at least two ratings
agencies (without he benefit of a third-party guarantee), and must not be placed
on a watch list or downgraded by any such rating agency. The TALF Program is    
operated by the Federal Reserve Bank of New York (the "New York Fed"). Under the
TALF Program, the New York Fed provides non-recourse loans to a Fund in a       
minimum size of $10 million.                                                    

            In order to obtain a loan under the TALF Program, a Fund is required
to put up a certain percentage of the purchase price or value of the eligible   
collateral (called the "haircut"). In addition, it is required to pay an        
administrative fee to the New York Fed on the settlement date of each TALF      
Program loan received by the Fund. The interest rate under the loan will vary   
and will be determined under the terms of the TALF Program. The term of a loan  
under the TALF Program depends on the nature of the eligible collateral and are 
currently three years or five years.                                            

           In connection with a TALF Program loan, a Fund will pledge eligible
collateral, which will consist of either certain eligible asset-backed          
securities that the Fund currently owns or other asset-backed securities that   
the Fund purchases with the loan proceeds. Except in limited circumstances, TALF
loans by the New York Fed to the Fund are non-recourse, and if the Fund does not
repay the loan, the New York Fed may enforce its rights only against the        
eligible collateral pledged by the Fund and not against any other assets of the 
Fund. TALF loans are prepayable at the option of the Fund without penalty, and  
the Fund may satisfy its loan obligation in full at any time by surrendering the
eligible collateral to the New York Fed. If the securities constituting eligible
collateral default and lose all their value, under the current terms of the TALF
Program the New York Fed cannot look to the Fund to cover the principal on the  
loan. Generally, under the terms of the TALF Program payment of principal on    
eligible collateral must be used immediately to reduce the principal amount of  
the TALF loan in proportion to the haircut (for example, if the original haircut
was 10%, 90% of any principal repaid must be immediately paid to the New York   
Fed).                                                                           

           The risk of leverage to the Fund under the TALF Program is the same
risk of leverage that applies to other types of borrowings the Fund may engage  
in (see "Effects of Borrowing and Use of Leverage" below for more details).     
Loans under the TALF Program would not be subject to the Funds' limitations on  
borrowings (which are generally limited to 33 1/3% of the Fund's total assets). 
However, the Fund will borrow under the TALF Program only if it maintains       
segregated liquid assets (in addition to any assets pledged as eligible         
collateral), marked-to-market daily, in an amount equal to the Fund's           
outstanding principal and interest under the TALF loan, treating the loans under
the TALF Program similar to other financial instruments (such as reverse        
repurchase agreements) that obligate a fund to "cover:" its obligation to       
purchase or deliver cash or securities at a future time.                        

            Participations in the TALF Program and other loan programs sponsored
by the United States of America (and any of its subdivisions, agencies,         
departments, commissions, boards, authorities, instrumentalities or bureaus)    
will not be considered purchasing securities on margin for purposes of the      
Fund's limits on margin.                                                        

       The New York Fed reserves the right to reject any request for a
loan, in whole or in part, in its sole discretion, even if a Fund meets all     
requirements of the TALF Program. The Federal Reserve may also change the terms 
of the TALF Program at its discretion. While the current terms of the TALF      
Program state that amendments will only apply to future participations, there is
no guarantee that retroactive changes to the TALF Program will not occur. The   
Fund cannot predict the form any such changes or modifications might take and,  
if the Fund participates in the TALF Program, such changes may adversely affect 
the value of the Fund's assets and the ability of the Fund to achieve its       
investment objectives. Any changes to the TALF Program may, among other things, 
further limit or expand the types of securities that may be purchased with the  
proceeds of a TALF Program loan.                                                

            Participation in the TALF Program requires the Fund to contract with
a primary dealer that will be authorized to act as agent for the Fund. A primary
dealer may receive direct or indirect fees for its services. Any such fees      
incurred will be borne by the Fund. Under the terms of the TALF Program, any    
interest and principal payments from TALF eligible collateral will be directed  
first to a custodial account in the name of the primary dealer prior to         
remittance to the Fund. As a result, the Fund will be subject to the            
counterparty risk of the primary dealer. Any voting rights held in respect of   
TALF eligible collateral under a TALF Program loan currently are subject to the 
consent of the New York Fed, whose consent must be obtained via the primary     
dealer, which may delay the Fund's voting ability.                              

            Under certain circumstances, loans under the TALF Program may become
recourse to the Fund, which may adversely affect the Fund's ability to achieve  
its investment objective. In connection with any borrowing by the Fund under the
TALF Program, a Fund is required to represent, among other things, that at the  
time of borrowing the Fund is an eligible borrower and that the collateral is   
eligible collateral. A determination that the Fund is, at any time, not an      
eligible borrower (based on the criteria that is applicable at the time of      
borrowing), or a determination that certain representations made by the Fund    
under the TALF Program were untrue when made , will cause the loan to become    
full recourse to the Fund, and the Fund must then repay the loan or surrender   
the eligible collateral at a time when it may not be advantageous to do so,     
which may result in losses to the Fund. Additionally, the loan may become       
recourse to the Fund if certain persons acquire more than 25% of the Fund's     
outstanding securities or if the Fund fails to make certain timely filings under
the TALF Program. If loans under the TALF Program become recourse against the   
Fund and the value of the eligible collateral pledged to the New York Fed does  
not at least equal the amount of principal and interest the Fund owes to the New
York Fed under the loan, then the Fund will be required to pay the difference to
the New York Fed. In order to make this payment, the Fund may be required to    
sell portfolio securities during adverse market conditions or at other times it 
would not otherwise choose to sell such securities. Finally, if the Fund were to
surrender its eligible collateral under the terms of the TALF Program, it would 
lose the amount of the haircut.                                                 

          Under the terms of its agreement with the Fund, the primary dealer
generally disclaims all liability for losses that may occur in connection with  
the TALF Program, the risk of which is borne by the Fund. Further, the Fund     
indemnifies for any losses that the primary dealer may incur under the terms of 
the TALF Program. The primary dealer may terminate its agreement with the Fund  
at any time. If the Fund is not able to find a replacement primary dealer within
the requisite period of time, it may be required to either repay the loan, sell 
the eligible collateral, or surrender the eligible collateral at a time when it 
may not be advantageous to do so, which may result in losses to the Fund.       
Agreements with the primary dealer are subject to amendment by the primary      
dealer without the Fund's consent, in order to conform to any future amendments 
of the TALF Program by the Federal Reserve.                                     

         Participation in TALF will not subject the Fund or the Manager to
restrictions on executive compensation under the Treasury Department's Troubled 
Assets Relief Program.                                                          

Preferred Stock                                                                 
---------------                                                                 

          A Fund may invest in preferred stock. Preferred stock is an equity
security that has features of debt because it generally entitles the holder to  
periodic payments at a fixed rate of return. Preferred stock is subordinated to 
any debt the issuer has outstanding but has liquidation preference over common  
stock. 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                            
----------------------------------------------------                            

          A repurchase agreement is an agreement by which a Fund purchases a
security and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date, normally one day or a week later. The
purchase and repurchase obligations are transacted under one document. The      
resale price is greater than the purchase price, reflecting an agreed-upon      
"interest rate" that is effective for the period of time the buyer's money is   
invested in the security, and which is related to the current market rate of the
purchased security rather than its coupon rate. During the term of a repurchase 
agreement, the Fund monitors on a daily basis the market value of the securities
subject to the agreement and, if the market value of the securities falls below 
the resale amount provided under the repurchase agreement, the seller under the 
repurchase agreement is required to provide additional securities or cash equal 
to the amount by which the market value of the securities falls below the resale
amount. Because a repurchase agreement permits a Fund to invest temporarily     
available cash on a fully-collateralized basis, repurchase agreements permit the
Fund to earn a return on temporarily available cash while retaining "overnight" 
flexibility in pursuit of investments of a longer-term nature. Repurchase       
agreements may exhibit the characteristics of loans by a Fund.                  

          The obligation of the seller under the repurchase agreement is not
guaranteed, and there is a risk that the seller may fail to repurchase the      
underlying security, whether because of the seller's bankruptcy or otherwise. In
such event, the Fund would attempt to exercise its rights with respect to the   
underlying security, including possible sale of the securities. A Fund may incur
various expenses in connection with the exercise of its rights and may be       
subject to various delays and risks of loss, including (a) possible declines in 
the value of the underlying securities, (b) possible reduction in levels of     
income and (c) lack of access to the securities (if they are held through a     
third-party custodian) and possible inability to enforce the Fund's rights. The 
Fund's Board has established procedures, which are periodically reviewed by the 
Board, pursuant to which the Adviser monitors the creditworthiness of the       
dealers with which the Fund enters into repurchase agreement transactions.      

      A Fund may enter into repurchase agreements pertaining to U.S.
Government securities with member banks of the Federal Reserve System or        
"primary dealers" (as designated by the Federal Reserve Bank of New York) in    
such securities. There is no percentage restriction on a Fund's ability to enter
into repurchase agreements. Currently, each Fund intends to enter into          
repurchase agreements only with its custodian and such primary dealers.         

           A Fund may enter into buy/sell back transactions, which are similar
to repurchase agreements. In this type of transaction, a 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, though done simultaneously, is two separate legal agreements. 
A buy/sell back transaction also differs from a repurchase agreement in that the
seller is not required to provide margin payments if the value of the securities
falls below the repurchase price because the transaction is two separate        
transactions. Each Fund has the risk of changes in the value of the purchased   
security during the term of the buy/sell back agreement although these          
agreements typically provide for the repricing of the original transaction at a 
new market price if the value of the security changes by a specific amount.     

Reverse Repurchase Agreements and Dollar Rolls                                  
----------------------------------------------                                  

            Reverse repurchase agreements are identical to repurchase agreements
except that rather than buying securities for cash subject to their repurchase  
by the seller, a Fund sells portfolio assets concurrently with an agreement by  
the Fund to repurchase the same assets at a later date at a fixed price slightly
higher than the sale price. During the reverse repurchase agreement period, the 
Fund continues to receive principal and interest payments on these securities.  
Generally, the effect of a reverse repurchase agreement is that the Fund can    
recover all or most of the cash invested in the portfolio securities involved   
during the term of the reverse repurchase agreement, while it will be able to   
keep the interest income associated with those portfolio securities. Such       
transactions are advantageous only if the "interest cost" to the Fund of the    
reverse repurchase transaction, i.e., the difference between the sale and       
repurchase price for the securities, is less than the cost of otherwise         
obtaining the cash.                                                             

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

            Reverse repurchase agreements and dollar rolls involve the risk that
the market value of the securities the Fund is obligated to repurchase under the
agreement may decline below the repurchase price. In the event the buyer of     
securities under a reverse repurchase agreement or dollar roll files for        
bankruptcy or becomes insolvent, the Fund's use of the proceeds of the agreement
may be restricted pending a determination by the other party, or its trustee or 
receiver, whether to enforce the Fund's obligation to repurchase the securities.
In addition, the use of these investments results in leveraging the Fund's      
common stocks because the Fund uses the proceeds to make investments in other   
securities. See Borrowing and Use of Leverage below.                            

Securities Ratings                                                              
------------------                                                              

         The ratings of fixed-income securities by Moody's, S&P, and Fitch
Ratings ("Fitch"), Dominion Bond Rating Service Ltd. and A.M. Best Company are a
generally accepted barometer of credit risk. They are, however, subject to      
certain limitations from an investor's standpoint. The rating of an issuer is   
heavily weighted by past developments and does not necessarily reflect probable 
future conditions. There is frequently a lag between the time a rating is       
assigned and the time it is updated. In addition, there may be varying degrees  
of difference in credit risk of securities within each rating category.         

        Securities rated Baa, BBB+, BBB, or BBB- by S&P or Baa1, Baa2 or
Baa3 by Moody's are considered by Moody's to have speculative characteristics.  
Sustained periods of deteriorating economic conditions or rising interest rates 
are more likely to lead to a weakening in the issuer's capacity to pay interest 
and repay principal than in the case of higher-rated securities.                

        Non-rated securities will also be considered for investment by a
Fund when the Adviser believes that the financial condition of the issuers of   
such securities, or the protection afforded by the terms of the securities      
themselves, limits the risk to the Fund to a degree comparable to that of rated 
securities which are consistent with the Fund's objectives and policies.        

            The Adviser generally uses ratings issued by S&P, Moody's, Fitch and
Dominion Bond Rating Service Ltd. Some securities are rated by more than one of 
these ratings agencies, and the ratings assigned to the security by the rating  
agencies may differ. In such an event and for purposes of determining compliance
with restrictions on investments for the Fund, if a security is rated by two or 
more rating agencies, the Adviser will deem the security to be rated at the     
highest rating. For example, if a security is rated by Moody's and S&P only,    
with Moody's rating the security as Ba and S&P as BBB, the Adviser will deem the
security to be rated as the equivalent of BBB (i.e., Baa by Moody's and BBB by  
S&P). Or, if a security is rated by Moody's, S&P and Fitch, with Moody's rating 
the security as Ba, S&P as BBB and Fitch as BB, the Adviser will deem the       
security to be rated as the equivalent of BBB (i.e., Ba1 by Moody's, BBB by S&P 
and BBB by Fitch).                                                              

      The Adviser will try to reduce the risk inherent in the Fund's
investment approach through credit analysis, diversification and attention to   
current developments and trends in interest rates and economic conditions.      
However, there can be no assurance that losses will not occur. In considering   
investments for Funds that invest in high-yielding securities, the Adviser will 
attempt to identify those high-yielding securities whose financial condition is 
adequate to meet future obligations, has improved, or is expected to improve in 
the future. The Adviser's analysis focuses on relative values based on such     
factors as interest or dividend coverage, asset coverage, earnings prospects,   
and the experience and managerial strength of the issuer.                       

          In the event that the credit rating of a security held by the Fund
is downgraded, the credit quality deteriorates after purchase, or the security  
defaults, the Fund will not be obligated to dispose of that security and may    
continue to hold the security if, in the opinion of the Adviser, such investment
is appropriate in the circumstances.                                            

           Unless otherwise indicated, references to securities ratings by one
rating agency in this SAI shall include the equivalent rating by another rating 
agency.                                                                         

Short Sales                                                                     
-----------                                                                     

           A short sale is effected by selling a security that a Fund does not
own, or if the Fund does own such security, it is not to be delivered upon      
consummation of the sale. A Fund may make short sales of securities or maintain 
a short position only for the purpose of deferring realization of gain or loss  
for U.S. federal income tax purposes, provided that at all times when a short   
position is open the Fund owns an equal amount of such securities of the same   
issue as, and equal in amount to, the securities sold short. In addition, the   
Fund may not make a short sale if more than 10% of the Fund's net assets (taken 
at market value) is held as collateral for short sales at any one time. A short 
sale of a security involves the risk that, instead of declining, the price of   
the security sold short will rise. If the price of the securities sold short    
increases between the time of a short sale and the time a Fund replaces the     
borrowed security, the Fund will incur a loss; conversely, if the price         
declines, the Fund will realize a gain. The potential for the price of a        
fixed-income security sold short to rise is a function of both the remaining    
maturity of the obligation, its creditworthiness and its yield. Unlike short    
sales of equities or other instruments, potential for the price of a            
fixed-income security to rise may be limited due to the fact that the security  
will be no more than par at maturity. However, the short sale of other          
instruments or securities generally, including fixed-income securities          
convertible into equities or other instruments, a fixed-income security trading 
at a deep discount from par or which pays a coupon that is high in relative or  
absolute terms, or which is denominated in a currency other than the U.S.       
Dollar, involves the possibility of a theoretically unlimited loss since there  
is a theoretically unlimited potential for the market price of the security sold
short to increase. See "Dividends, Distributions and Taxes-Tax Straddles" for a 
discussion of certain special federal income tax considerations that may apply  
to short sales which are entered into by the Fund.                              

Structured Securities                                                           
---------------------                                                           

   A Fund may invest 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, for example, mortgage-related and other asset-backed        
securities. A 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 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) and the issuance by that entity of one or more classes of securities
("Structured Securities") backed by, or representing interests in, the          
underlying instruments. The cash flow on the underlying instruments may be      
apportioned among the newly issued Structured Securities to create securities   
with different investment characteristics such as varying maturities, payment   
priorities and interest rate provisions, and the extent of the payments made    
with respect to Structured Securities is dependent on the extent of the cash    
flow on the underlying instruments. Because Structured Securities of the type in
which the Fund anticipates it will invest typically involve no credit           
enhancement, their credit risk generally will be equivalent to that of the      
underlying instruments.                                                         

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

          Under the terms of subordinated securities, payments that would be
made to their holders may be required to be made to the holders of more senior  
securities and/or the subordinated or junior securities may have junior liens,  
if they have any rights at all, in any collateral (meaning proceeds of the      
collateral are required to be paid first to holders of more senior securities). 
As a result, subordinated or junior securities will be disproportionately       
affected by a default or even a perceived decline in the creditworthiness of the
issuer.                                                                         

U.S. Government Securities                                                      
--------------------------                                                      

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

          U.S. Government securities also include zero coupon securities and
principal-only securities and certain stripped mortgage-related securities. Zero
coupon securities are described in more detail in "Zero Coupon Securities"      
below, and stripped mortgage-related securities and principal-only securities   
are described in more detail in "Mortgage-Related Securities and Other          
Asset-Backed Securities -Stripped Mortgage-Related Securities" above. In        
addition, other U.S. Government agencies and instrumentalities have issued      
stripped securities that are similar to SMRS.                                   

Inflation-protected securities, or IPS, such as Treasury
Inflation-Protected Securities, or TIPS, are fixed income securities whose      
principal value is periodically adjusted according to the rate of inflation. If 
the index measuring inflation falls, the principal value of these securities    
will be adjusted downward, and consequently the interest payable on these       
securities (calculated with respect to a smaller principal amount) will be      
reduced. Repayment of the original bond principal upon maturity (as adjusted for
inflation) is guaranteed in the case of U.S. Treasury inflation-protected       
securities. For bonds that do not provide a similar guarantee, the adjusted     
principal value of the bond repaid at maturity may be less than the original    
principal.                                                                      

       Inflation-protected securities tend to react to changes in real
interest rates. In general, the price of an inflation-protected debt security   
can fall when real interest rates rise, and can rise when real interest rates   
fall. In addition, the value of inflation-protected securities may be vulnerable
to changes in expectations of inflation. Interest payments on                   
inflation-protected debt securities can be unpredictable and will vary as the   
principal and/or interest is adjusted for inflation.                            

          TIPS, which are issued by the U.S Treasury, use the Consumer Price
Index for Urban Consumers, or the CPI, as the inflation measure. The principal  
of a TIPS increases with inflation and decreases with deflation, as measured by 
the CPI. When a TIPS matures, the holder is paid the adjusted principal or      
original principal, whichever is greater. TIPS pay interest twice a year, at a  
fixed rate, which is determined by auction at the time the TIPS are issued. The 
rate is applied to the adjusted principal; so, like the principal, interest     
payments rise with inflation and fall with deflation. TIPS are issued in terms  
of 5, 10, and 20 years.                                                         

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

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

Variable, Floating and Inverse Floating Rate Securities                         
-------------------------------------------------------                         

       These securities have interest rates that are reset at periodic
intervals, usually by reference to some interest rate index or market interest  
rate. Some of these securities are backed by pools of mortgage loans. Although  
the rate adjustment feature may act as a buffer to reduce sharp changes in the  
value of these securities, they are still subject to changes in value based on  
changes in market interest rates or changes in the issuer's creditworthiness.   
Because the interest rate is reset only periodically, changes in the interest   
rate on these securities may lag behind changes in prevailing market interest   
rates. Also, some of these securities (or the underlying mortgages) are subject 
to caps or floors that limit the maximum change in the interest rate during a   
specified period or over the life of the security.                              

Zero Coupon Securities                                                          
----------------------                                                          

        A zero coupon security pays no interest to its holder during its
life. An investor acquires a zero coupon security at a discounted price from the
face value of the security, which is generally based upon its present value, and
which, depending upon the time remaining until maturity, may be significantly   
less than its face value (sometimes referred to as a "deep discount" price).    
Upon maturity of the zero coupon security, the investor receives the face value 
of the security.                                                                

           A Fund may invest in zero coupon Treasury securities, which consist
of Treasury bills or the principal components of U.S. Treasury bonds or notes. A
Fund may also invest in zero coupon securities issued by U.S. Government        
agencies or instrumentalities that are supported by the full faith and credit of
the U.S., which consist of the principal components of securities of U.S.       
Government agencies or instrumentalities.                                       

            Currently, the only U.S. Treasury security issued without coupons is
the Treasury bill. The zero coupon securities purchased by the Fund may consist 
of principal components held in STRIPS form issued through the U.S. Treasury's  
STRIPS program, which permits the beneficial ownership of the component to be   
recorded directly in the Treasury book-entry system. In addition, in the last   
few years a number of banks and brokerage firms have separated ("stripped") the 
principal portions ("corpus") from the coupon portions of the U.S. Treasury     
bonds and notes and sold them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments are    
generally held by a bank in a custodial or trust account).                      

          Because zero coupon securities trade at a discount from their face
or par value but pay no periodic interest, they are subject to greater          
fluctuations of market value in response to changing interest rates than debt   
obligations of comparable maturities which make periodic distributions of       
interest.                                                                       

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

Certain Risk and Other Considerations                                           
-------------------------------------                                           

    Borrowing and Use of Leverage. A Fund may use borrowings for
investment purposes subject to the restrictions of the 1940 Act. A Fund may also
use leverage for investment purposes by entering into transactions such as      
reverse repurchase agreements, forward contracts and dollar rolls. This means   
that the Fund uses the cash proceeds made available during the term of these    
transactions to make investments in other securities.                           

         Borrowings by a Fund result in leveraging of the Fund's shares of
common stock. The proceeds of such borrowings will be invested in accordance    
with the Fund's investment objective and policies. The Adviser anticipates that 
the difference between the interest expense paid by the Fund on borrowings and  
the rates received by the Fund from its investment portfolio issuers will       
provide the Fund's shareholders with a potentially higher yield.                

         Utilization of leverage, which is usually considered speculative,
however, involves certain risks to the Fund's shareholders. These include a     
higher volatility of the NAV of the Fund's shares of common stock and the       
relatively greater effect on the NAV of the shares caused by favorable or       
adverse changes in market conditions or interest rates. So long as the Fund is  
able to realize a net return on the leveraged portion of its investment         
portfolio that is higher than the interest expense paid on borrowings or the    
carrying costs of leveraged transactions, the effect of leverage will be to     
cause the Fund's shareholders to realize higher current net investment income   
than if the Fund were not leveraged. However, to the extent that the interest   
expense on borrowings or the carrying costs of leveraged transactions approaches
the net return on the leveraged portion of the Fund's investment portfolio, the 
benefit of leverage to the Fund's shareholders will be reduced, and if the      
interest expense on borrowings or the carrying costs of leveraged transactions  
were to exceed the net return to shareholders, the Fund's use of leverage would 
result in a lower rate of return than if the Fund were not leveraged. Similarly,
the effect of leverage in a declining market could be a greater decrease in NAV 
per share than if the Fund were not leveraged. In an extreme case, if the Fund's
current investment income were not sufficient to meet the interest expense on   
borrowings or the carrying costs of leveraged transactions, it could be         
necessary for the Fund to liquidate certain of its investments, thereby reducing
the NAV of the Fund's shares.                                                   

       Certain transactions, such as derivatives transactions, forward
commitments, reverse repurchase agreements and short sales involve leverage and 
may expose a Fund to potential losses that, in some cases, may exceed the amount
originally invested by the Fund. When a Fund engages in such transactions, it   
will, in accordance with guidance provided by the Commission or its staff in,   
among other things, regulations, interpretative releases and no-action letters, 
deposit in a segregated account certain liquid assets with a value at least     
equal to the Fund's exposure, on a marked-to-market or other relevant basis, to 
the transaction. Transactions for which assets have been segregated will not be 
considered "senior securities" for purposes of the Fund's investment restriction
concerning senior securities. The segregation of assets is intended to enable   
the Fund to have assets available to satisfy its obligations with respect to    
these transactions, but will not limit the Fund's exposure to loss.             
      Investments in Lower-Rated and Unrated Instruments. A Fund may
invest in lower-rated securities, in some cases, substantially (High Income),   
which may include securities having the lowest rating for non-subordinated debt 
securities (i.e., rated C by Moody's or CCC or lower by S&P & Fitch) and unrated
securities of equivalent investment quality. Debt securities with such a rating 
are considered by the rating organizations to be subject to greater risk of loss
of principal and interest than higher-rated securities and are considered to be 
predominantly speculative with respect to the issuer's capacity to pay interest 
and repay principal, which may in any case decline during sustained periods of  
deteriorating economic conditions or rising interest rates. These securities are
considered to have extremely poor prospects of ever attaining any real          
investment standing, to have a current identifiable vulnerability to default, to
be unlikely to have the capacity to pay interest and repay principal when due in
the event of adverse business, financial or economic conditions, and/or to be in
default or not current in the payment of interest or principal.                 

        Lower-rated securities generally are considered to be subject to
greater market risk than higher-rated securities in times of deteriorating      
economic conditions. In addition, lower-rated securities may be more susceptible
to real or perceived adverse economic and competitive industry conditions than  
investment grade securities, although the market values of securities rated     
below investment grade and comparable unrated securities tend to react less to  
fluctuations in interest rate levels than do those of higher-rated securities.  
The market for lower-rated securities may be thinner and less active than that  
for higher-quality securities, which can adversely affect the prices at which   
these securities can be sold. To the extent that there is no established        
secondary market for lower-rated securities, the Adviser may experience         
difficulty in valuing such securities and, in turn, a Fund's assets. In         
addition, adverse publicity and investor perceptions about lower-rated          
securities, whether or not based on fundamental analysis, may tend to decrease  
the market value and liquidity of such lower-rated securities. Transaction costs
with respect to lower-rated securities may be higher, and in some cases         
information may be less available, than is the case with investment grade       
securities.                                                                     

      Many fixed-income securities, including certain U.S. corporate
fixed-income securities in which a Fund may invest, contain call or buy-back    
features that permit the issuer of the security to call or repurchase it. Such  
securities may present risks based on payment expectations. If an issuer        
exercises such a "call option" and redeems the security, the Fund may have to   
replace the called security with a lower yielding security, resulting in a      
decreased rate of return for the Fund.                                          

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

         U.S. Corporate Fixed-Income Securities. A Fund may invest in U.S.
corporate fixed-income securities that may include securities issued in         
connection with corporate restructurings such as takeovers or leveraged buyouts,
which may pose particular risks. Securities issued to finance corporate         
restructurings may have special credit risks due to the highly leveraged        
conditions of the issuer. In addition, such issuers may lose experienced        
management as a result of the restructuring. Finally, the market price of such  
securities may be more volatile to the extent that expected benefits from the   
restructuring do not materialize. A Fund may also invest in U.S. corporate      
fixed-income securities that are not current in the payment of interest or      
principal or are in default, so long as the Adviser believes such investment is 
consistent with the Fund's investment objectives. A Fund's rights with respect  
to defaults on such securities will be subject to applicable U.S. bankruptcy,   
moratorium and other similar laws.                                              

    Risks of Investments in Foreign Securities. Investors should
understand and consider carefully the substantial risks involved in securities  
of foreign companies and governments of foreign nations, some of which are      
referred to below, and which are in addition to the usual risks inherent in     
domestic investments. Investing in securities of non-U.S. companies which are   
generally denominated in foreign currencies, and utilization of derivative      
investment products denominated in, or the value of which is dependent upon     
movements in the relative value of, a foreign currency, involve certain         
considerations comprising both risk and opportunity not typically associated    
with investing in U.S. companies. These considerations include changes in       
exchange rates and exchange control regulations, political and social           
instability, expropriation, imposition of foreign taxes, less liquid markets and
less available information than are generally the case in the U.S., higher      
transaction costs, less government supervision of exchanges, brokers and        
issuers, difficulty in enforcing contractual obligations, lack of uniform       
accounting and auditing standards and greater price volatility.                 

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

       It is contemplated that foreign securities will be purchased in
over-the-counter markets or on stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are   
located, if that is the best available market. Foreign securities markets are   
generally not as developed or efficient as those in the U.S. While growing in   
volume, they usually have substantially less volume than the Exchange, and      
securities of some foreign companies are less liquid and more volatile than     
securities of comparable U.S. companies. Similarly, volume and liquidity in most
foreign bond markets is less than in the U.S. and, at times, volatility of price
can be greater than in the U.S. Fixed commissions on foreign stock exchanges    
are generally higher than negotiated commissions on U.S. exchanges, although a  
Fund will endeavor to achieve the most favorable net results on its portfolio   
transactions. There is generally less government supervision and regulation of  
stock exchanges, brokers and listed companies than in the U.S.                  

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

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

   Certain countries may require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of          
securities by foreign investors. In addition, if a deterioration occurs in a    
country's balance of payments, the country could impose temporary restrictions  
on foreign capital remittances.                                                 

          Income from certain investments held by a Fund could be reduced by
foreign income taxes, including withholding taxes. It is impossible to determine
the effective rate of foreign tax in advance. A Fund's NAV may also be affected 
by changes in the rates or methods of taxation applicable to that Fund or to    
entities in which that Fund has invested. The Adviser generally will consider   
the cost of any taxes in determining whether to acquire any particular          
investments, but can provide no assurance that the tax treatment of investments 
held by the Fund will not be subject to change. A shareholder otherwise subject 
to U.S. federal income taxes may, subject to certain limitations, be entitled to
claim a credit or deduction for U.S. federal income tax purposes for his or her 
proportionate share of such foreign taxes paid by the Fund. See "U.S. Federal   
Income Taxes."                                                                  

    Investors should understand that the expense ratio of a fund
investing in foreign securities may be higher than investment companies         
investing only in domestic securities since, among other things, the cost of    
maintaining the custody of foreign securities is higher and the purchase and    
sale of portfolio securities may be subject to higher transaction charges, such 
as stamp duties and turnover taxes.                                             

      For many foreign securities, there are U.S. Dollar-denominated
American Depositary Receipts ("ADRs") which are traded in the U.S. on exchanges 
or over-the-counter and are issued by domestic banks or trust companies and for 
which market quotations are readily available. ADRs do not lessen the foreign   
exchange risk inherent in investing in the securities of foreign issuers.       
However, by investing in ADRs rather than directly in stock of foreign issuers, 
a Fund can avoid currency risks which might occur during the settlement period  
for either purchases or sales. A Fund may purchase foreign securities directly, 
as well as through ADRs.                                                        

      Foreign Currency Transactions. A Fund may invest in securities
denominated in foreign currencies and a corresponding portion of the Fund's     
revenues will be received in such currencies. In addition, a Fund may conduct   
foreign currency transactions for hedging and non-hedging purposes on a spot    
(i.e., cash) basis or through the use of derivatives transactions, such as      
forward currency exchange contracts, currency futures and options thereon, and  
options on currencies as described above. The dollar equivalent of a Fund's net 
assets and distributions will be adversely affected by reductions in the value  
of certain foreign currencies relative to the U.S. Dollar. Such changes will    
also affect a Fund's income. A Fund will, however, have the ability to attempt  
to protect itself against adverse changes in the values of foreign currencies by
engaging in certain of the investment practices listed above. While a Fund has  
this ability, there is no certainty as to whether and to what extent the Fund   
will engage in these practices.                                                 
      Currency exchange rates may fluctuate significantly over short
periods of time causing, along with other factors, a Fund's NAV to fluctuate.   
Currency exchange rates generally are determined by the forces of supply and    
demand in the foreign exchange markets and the relative merits of investments in
different countries, actual or anticipated changes in interest rates and other  
complex factors, as seen from an international perspective. Currency exchange   
rates also can be affected unpredictably by the intervention of U.S. or foreign 
governments or central banks, or the failure to intervene, or by currency       
controls or political developments in the U.S. or abroad. To the extent a Fund's
total assets adjusted to reflect the Fund's net position after giving effect to 
currency transactions is denominated or quoted in the currencies of foreign     
countries, the Fund will be more susceptible to the risk of adverse economic and
political developments within those countries.                                  

      A Fund will incur costs in connection with conversions between
various currencies. A Fund may hold foreign currency received in connection with
investments when, in the judgment of the Adviser, it would be beneficial to     
convert such currency into U.S. Dollars at a later date, based on anticipated   
changes in the relevant exchange rate. If the value of the foreign currencies in
which a Fund receives its income falls relative to the U.S. Dollar between      
receipt of the income and the making of Fund distributions, the Fund may be     
required to liquidate securities in order to make distributions if the Fund has 
insufficient cash in U.S. Dollars to meet, among other things, distribution     
requirements that the Fund must satisfy to qualify as a regulated investment    
company for federal income tax purposes. Similarly, if the value of a particular
foreign currency declines between the time a Fund incurs expenses in U.S.       
Dollars and the time cash expenses are paid, the amount of the currency required
to be converted into U.S. Dollars in order to pay expenses in U.S. Dollars could
be greater than the equivalent amount of such expenses in the currency at the   
time they were incurred. In light of these risks, a Fund may engage in certain  
currency hedging transactions, which themselves, involve certain special risks. 
See "Additional Investment Policies and Practices," above.                      

           Additional Risks of Options on Forward Currency Exchange Contracts,
Options on Foreign Currencies and Other Options.                                

           Unlike transactions entered into by a Fund in futures contracts and
exchange-traded options, options on foreign currencies and forward currency     
exchange contracts may not be traded on contract markets regulated by the       
Commodity Futures Trading Commission (the "CFTC") or (with the exception of     
certain foreign currency options) by the Commission. Such instruments may       
instead be traded through financial institutions acting as market-makers,       
although foreign currency options are also traded on certain national securities
exchanges, such as the Philadelphia Stock Exchange and the Chicago Board Options
Exchange, subject to Commission regulation. Similarly, options on currencies may
be traded over-the-counter. In an over-the-counter trading environment, many of 
the protections afforded to exchange participants will not be available. For    
example, there are no daily price fluctuation limits, and adverse market        
movements could therefore continue to an unlimited extent over a period of time.
Although the purchaser of an option cannot lose more than the amount of the     
premium plus related transaction costs, this entire amount could be lost.       
Moreover, the option writer and a trader of forward currency exchange contracts 
could lose amounts substantially in excess of their initial investments, due to 
the margin and collateral requirements associated with such positions.          

     Over-the-counter transactions can be entered into only with a
financial institution willing to take the opposite side, as principal, of a     
Fund's position unless the institution acts as broker and is able to find       
another counterparty willing to enter into the transaction with the Fund. Where 
no such counterparty is available, it will not be possible to enter into a      
desired transaction. There also may be no liquid secondary market in the trading
of over-the-counter contracts, and a Fund could be required to retain options   
purchased or written, or forward currency exchange contracts entered into, until
exercise, expiration or maturity. This in turn could limit the Fund's ability to
profit from open positions or to reduce losses experienced, and could result in 
greater losses.                                                                 

     Further, over-the-counter transactions are not subject to the
guarantee of an exchange clearing house, and a Fund will therefore be subject to
the risk of default by, or the bankruptcy of, the financial institution serving 
as its counterparty. A Fund will enter into an over-the-counter transaction only
with parties whose creditworthiness has been reviewed and found to be           
satisfactory by the Adviser.                                                    

          Transactions in over-the-counter options on foreign currencies are
subject to a number of conditions regarding the commercial purpose of the       
purchaser of such option. A Fund is not able to determine at this time whether  
or to what extent additional restrictions on the trading of over-the-counter    
options on foreign currencies may be imposed at some point in the future, or the
effect that any such restrictions may have on the hedging strategies to be      
implemented by them.                                                            

   Options on foreign currencies traded on national securities
exchanges are within the jurisdiction of the Commission, as are other securities
traded on such exchanges. As a result, many of the protections provided to      
traders on organized exchanges will be available with respect to such           
transactions. In particular, all foreign currency option positions entered into 
on a national securities exchange are cleared and guaranteed by the Options     
Clearing Corporation ("OCC"), thereby reducing the risk of counterparty default.
Further, a liquid secondary market in options traded on a national securities   
exchange may be more readily available than in the over-the-counter market,     
potentially permitting the Fund to liquidate open positions at a profit prior to
exercise or expiration, or to limit losses in the event of adverse market       
movements.                                                                      

          The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid secondary      
market described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,        
possible intervention by governmental authorities and the effects of other      
political and economic events. In addition, exchange-traded options on foreign  
currencies involve certain risks not presented by the over-the-counter market.  
For example, exercise and settlement of such options must be made exclusively   
through the OCC, which has established banking relationships in applicable      
foreign countries for this purpose. As a result, the OCC may, if it determines  
that foreign governmental restrictions or taxes would prevent the orderly       
settlement of foreign currency option exercises, or would result in undue       
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of       
currency, the fixing of dollar settlement prices or prohibitions, on exercise.  

            Options on U.S. Government Securities, futures contracts, options on
futures contracts, forward currency exchange contracts and options on foreign   
currencies may be traded on foreign exchanges. Such transactions are subject to 
the risk of governmental actions affecting trading in or the prices of foreign  
currencies or securities. The value of such positions also could be adversely   
affected by (i) other complex foreign political and economic factors, (ii)      
lesser availability than in the U.S. of data on which to make trading decisions,
(iii) delays in the Fund's ability to act upon economic events occurring in     
foreign markets during nonbusiness hours in the U.S., (iv) the imposition of    
different exercise and settlement terms and procedures and margin requirements  
than in the U.S., and (v) lesser trading volume period.                         

        Sovereign Debt Obligations. No established secondary markets may
exist for many of the Sovereign Debt Obligations in which a Fund may invest.    
Reduced secondary market liquidity may have an adverse effect on the market     
price and the Fund's ability to dispose of particular instruments when necessary
to meet its liquidity requirements or in response to specific economic events   
such as a deterioration in the creditworthiness of the issuer. Reduced secondary
market liquidity for certain Sovereign Debt Obligations may also make it more   
difficult for the Fund to obtain accurate market quotations for the purpose of  
valuing its portfolio. Market quotations are generally available on many        
Sovereign Debt Obligations only from a limited number of dealers and may not    
necessarily represent firm bids of those dealers or prices for actual sales.    
          By investing in Sovereign Debt Obligations, a Fund will be exposed
to the direct or indirect consequences of political, social and economic changes
in various countries. Political changes in a country may affect the willingness 
of a foreign government to make or provide for timely payments of its           
obligations. The country's economic status, as reflected, among other things, in
its inflation rate, the amount of its external debt and its gross domestic      
product, will also affect the government's ability to honor its obligations.    

         Many countries providing investment opportunities for a Fund have
experienced substantial, and in some periods extremely high, rates of inflation 
for many years. Inflation and rapid fluctuations in inflation rates have had and
may continue to have adverse effects on the economies and securities markets of 
certain of these countries. In an attempt to control inflation, wage and price  
controls have been imposed in certain countries.                                
     Investing in Sovereign Debt Obligations involves economic and
political risks. The Sovereign Debt Obligations in which a Fund may invest in   
most cases pertain to countries that are among the world's largest debtors to   
commercial banks, foreign governments, international financial organizations and
other financial institutions. In recent years, the governments of some of these 
countries have encountered difficulties in servicing their external debt        
obligations, which led to defaults on certain obligations and the restructuring 
of certain indebtedness. Restructuring arrangements have included, among other  
things, obtaining new credit to finance interest payments. Certain governments  
have not been able to make payments of interest on or principal of Sovereign    
Debt Obligations as those payments have come due. Obligations arising from past 
restructuring agreements may affect the economic performance and political and  
social stability of those issuers.                                              

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

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

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

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

            A Fund is permitted to invest in Sovereign Debt Obligations that are
not current in the payment of interest or principal or are in default, so long  
as the Adviser believes it to be consistent with the Fund's investment          
objectives. A Fund may have limited legal recourse in the event of a default    
with respect to certain Sovereign Debt Obligations it holds. For example,       
remedies from defaults on certain Sovereign Debt Obligations, unlike those on   
private debt, must, in some cases, be pursued in the courts of the defaulting   
party itself. Legal recourse therefore may be significantly diminished.         
Bankruptcy, moratorium and other similar laws applicable to issuers of Sovereign
Debt Obligations may be substantially different from those applicable to issuers
of private debt obligations. The political context, expressed as the willingness
of an issuer of Sovereign Debt Obligations to meet the terms of the debt        
obligation, for example, is of considerable importance. In addition, no         
assurance can be given that the holders of commercial bank debt will not contest
payments to the holders of securities issued by foreign governments in the event
of default under commercial bank loan agreements.                               

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

INVESTMENT RESTRICTIONS 

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

Fundamental Investment Policies                                                 
-------------------------------                                                 

         Each Fund has adopted the following investment restrictions which
may not be changed without approval of the vote of a majority of a Fund's       
outstanding voting securities. The term "majority of outstanding securities"    
means the affirmative vote of the holders of (i) 67% or more of the shares of   
the Fund represented at a meeting at which more than 50% of the outstanding     
shares are present in person or by proxy or (ii) more than 50% of the           
outstanding shares of the Fund, whichever is less.                              

As a matter of fundamental policy, a Fund:              

(a)   may not concentrate investments in an industry, as
                concentration may be defined under the 1940 Act or the rules
         and regulations thereunder (as such statute, rules or
                regulations may be amended from time to time) or by guidance
                 regarding, interpretations of, or exemptive orders under, the
                1940 Act or the rules or regulations thereunder published by
appropriate regulatory authorities;         

           (b)   may not issue any senior security (as that term is defined in
                 the 1940 Act) or borrow money, except to the extent permitted
               by the 1940 Act or the rules and regulations thereunder (as
                  such statute, rules or regulations may be amended from time to
             time) or by guidance regarding, or interpretations of, or
        exemptive orders under, the 1940 Act or the rules or
              regulations thereunder published by appropriate regulatory
                 authorities. For the purposes of this restriction, margin and
                 collateral arrangements, including, for example, with respect
                to permitted borrowings, options, futures contracts, options
                 on futures contracts and other derivatives such as swaps, are
       not deemed to be the issuance of a senior security;

        (c)   may not make loans except through (i) the purchase of debt
               obligations in accordance with its investment objective and
                 policies; (ii) the lending of portfolio securities; (iii) the
                use of repurchase agreements; or (iv) the making of loans to
               affiliated funds as permitted under the 1940 Act, the rules
         and regulations thereunder (as such statutes, rule or
                 regulations may be amended from time to time), or by guidance
                 regarding, and interpretations of, or exemptive orders under,
the 1940 Act;                               

     (d)   may not purchase or sell real estate except that it may
                dispose of real estate acquired as a result of the ownership
                 of securities or other instruments. This restriction does not
           prohibit the Fund from investing in securities or other
         instruments backed by real estate or in securities of
  companies engaged in the real estate business;

           (e)   with respect to High Income and Global Bond, may not purchase
                 or sell commodities regulated by the CFTC under the Commodity
            Exchange Act or commodities contracts except for futures
                 contracts and options on futures contracts, and, with respect
                to Intermediate Bond and Unconstrained Bond, may purchase or
                  sell commodities or options thereon to the extent permitted by
applicable law; or                          

          (f)   may not act as an underwriter of securities, except that the
                 Fund may acquire restricted securities under circumstances in
                 which, if such securities were sold, the Fund might be deemed
            to be an underwriter for purposes of the Securities Act.

     As a matter of fundamental policy, each of Intermediate Bond,
Unconstrained Bond and High Income is diversified (as that term is defined in   
the 1940 Act). This means that at least 75% of the Fund's assets consist of:    

o     Cash or cash items;                                           
o     Government securities;                                        
o     Securities of other investment companies; and                 
      o     Securities of any one issuer that represent not more than 10% of the
         outstanding voting securities of the issuer of the securities and
not more than 5% of the total assets of the Fund.       

As a matter of fundamental policy, Global Bond is a     
"non-diversified" investment company, which means the Fund is not limited in the
proportion of its assets that may be invested in the securities of a single     
issuer. This policy may be changed without a shareholder vote. However, the Fund
intends to limit its investments so as to qualify to be taxed as a "regulated   
investment company" for purposes of the Internal Revenue Code of 1986, as       
amended (the "Code"), which will relieve the Fund of any liability for federal  
income tax to the extent its earnings are distributed to shareholders. See      
"Dividends, Distributions and Taxes." To so qualify, among other requirements,  
the Fund will limit its investment so that, at the close of each quarter of the 
taxable year, (i) not more than 25% of the Fund's total assets will be invested 
in the securities of a single issuer, and (ii) with respect to 50% of its total 
assets, not more than 5% of its total assets will be invested in the securities 
of a single issuer and the Fund will not own more than 10% of the outstanding   
voting securities of a single issuer. A Fund's investments in U.S. Government   
securities are not subject to these limitations.                                

           Because Global Bond is a non-diversified investment company, it may
invest in a smaller number of individual issuers than a diversified investment  
company, and an investment in the Fund may, under certain circumstances, present
greater risk to an investor than an investment in a diversified investment      
company. Foreign government securities are not treated like U.S. Government     
securities for purposes of the diversification tests described in the preceding 
paragraph, but instead are subject to these tests in the same manner as the     
securities of non-governmental issuers. In this regard sovereign debt           
obligations issued by different issuers located in the same country are often   
treated as issued by a single issuer for purposes of these diversification      
tests. Certain issuers of structured securities and loan participations may be  
treated as separate issuers for the purposes of these tests.                    

Non-Fundamental Investment Policies                                             
-----------------------------------                                             

      As a matter of non-fundamental policy, each Fund has adopted a
policy that provides that the Fund may not purchase securities on margin, except
(i) as otherwise provided under rules adopted by the Commission under the 1940  
Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) 
that the Fund may obtain such short-term credits as are necessary for the       
clearance of portfolio transactions, and the Fund may make margin payments in   
connection with futures contracts, options, forward contracts, swaps, caps,     
floors, collars and other financial instruments.                                

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

MANAGEMENT OF THE FUNDS 

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

The Adviser                                                                     
-----------                                                                     

          The Adviser, a Delaware limited partnership with principal offices
at 1345 Avenue of the Americas, New York, New York 10105, has been retained     
under an investment advisory agreement (the "Advisory Agreement") to provide    
investment advice and, in general, to conduct the management and investment     
program of each of the Funds under the supervision of each Fund's Board (see    
"Management of the Funds" in the Prospectuses). The Adviser is an investment    
adviser registered under the Investment Advisers Act of 1940, as amended.       

  The Adviser is a leading global investment management firm
supervising client accounts with assets as of September 30, 2010, totaling      
approximately $484 billion. The Adviser provides management services for many of
the largest U.S. public and private employee benefit plans, endowments,         
foundations, public employee retirement funds, banks, insurance companies and   
high net worth individuals worldwide. The Adviser is also one of the largest    
mutual fund sponsors, with a diverse family of globally distributed mutual fund 
portfolios. As one of the world's leading global investment management          
organizations, the Adviser is able to compete for virtually any portfolio       
assignment in any developed capital market in the world.                        

            As of September 30, 2010, AXA, a societe anonyme organized under the
laws of France and the holding company for an international group of insurance  
and related financial services companies, through certain of its subsidiaries   
("AXA and its subsidiaries") owned approximately 1.4% of the issued and         
outstanding assignments of beneficial ownership of limited partnership interests
("Holding Units") in AllianceBernstein Holding L.P., a Delaware limited         
partnership ("Holding"). Holding Units trade publicly on the Exchange under the 
ticker symbol "AB."                                                             

         As of September 30, 2010, the ownership structure of the Adviser,
expressed as a percentage of general and limited partnership interests, was as  
follows:                                                                        

AXA and its subsidiaries            61.4%   
Holding                             36.7    
Unaffiliated holders                 1.9    
                                ------------
                                100.0%
                                ============

          AllianceBernstein Corporation (an indirect wholly-owned subsidiary
of AXA) is the general partner of both Holding and the Adviser.                 
AllianceBernstein Corporation owns 100,000 general partnership units in Holding 
and a 1% general partnership interest in the Adviser. Including both the general
partnership and limited partnership interests in Holding and the Adviser, AXA   
and its subsidiaries had an approximate 63.0% economic interest in the Adviser  
as of September 30, 2010.                                                       

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

Advisory Agreement and Expenses                                                 
-------------------------------                                                 

           The Adviser serves as investment manager and adviser of each of the
Funds, continuously furnishes an investment program for each Fund, and manages, 
supervises and conducts the affairs of each Fund, subject to supervision of each
Fund's Board.                                                                   

          Under the Advisory Agreements for Intermediate Bond, Unconstrained
Bond, High Income, and Global Bond, the Adviser furnishes advice and            
recommendations with respect to the Funds' portfolio of securities and          
investments and provides persons satisfactory to the Board to act as officers of
the Funds. Such officers and employees may be employees of the Adviser or its   
affiliates.                                                                     

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

           The Advisory Agreements are terminable without penalty by a vote of
a majority of the Funds' outstanding voting securities or by a vote of a        
majority of the Directors on 60 days' written notice or by the Adviser on 60    
days' written notice, and will automatically terminate in the event of          
assignment. Each Advisory Agreement provides that in the absence of willful     
misfeasance, bad faith or gross negligence on the part of the Adviser, or of    
reckless disregard of its obligations thereunder, the Adviser shall not be      
liable for any action or failure to act in accordance with its duties           
thereunder.                                                                     

ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   

          For services rendered by the Adviser under the Advisory Agreement,
the Fund paid the Adviser a fee effective September 7, 2004 of .45 of 1% of the 
first $2.5 billion of the Fund's average net assets and .40 of 1% of the excess 
of $2.5 billion up to 5 billion and .35 of 1% of the excess over $5 billion as a
percentage of aggregate daily net assets (for the year 2004, the Fund's         
previously effective advisory fee was waived to this amount by the Adviser after
January 1, 2004). The fee is accrued daily and paid monthly. The Adviser has    
contractually agreed through the Fund's fiscal year ending October 31, 2011 to  
waive its fee and bear certain expenses so that total operating expenses,       
excluding interest expense, do not exceed on an annual basis .85%, 1.55%, 1.55%,
1.05%, .80%, .55% and .55% of aggregate average net assets, respectively, for   
Class A, Class B, Class C, Class R, Class K, Class I and Advisor Class shares.  
This contractual agreement automatically extends each year unless the Adviser   
provides the Fund written notice 60 days prior to the Fund's fiscal year end.   

      For the fiscal years ended October 31, 2008, 2009 and 2010 the
Adviser received under the Advisory Agreement the amount of $2,586,786,         
$2,334,733 and $2,592,080 respectively, as advisory fees from the Fund. Under   
the expense limitation undertaking, $1,313,293, $1,136,115 and $1,181,888 were  
waived and/or reimbursed by the Adviser for the fiscal years ended October 31,  
2008, 2009 and 2010, respectively.                                              

          The Fund has, under the Advisory Agreement, assumed the obligation
for payment of all of its other expenses. As to the obtaining of services other 
than those specifically provided to the Fund by the Adviser, the Fund may employ
its own personnel. For such services it may also utilize personnel employed by  
the Adviser or its affiliates and, in such event, the services will be provided 
to the Fund at cost and the payments therefore must be specifically approved by 
the Fund's Board. For the fiscal year ended October 31, 2010, the cost of       
certain legal and accounting services amounting to $82,651 provided to the Fund 
by the Adviser was waived.                                                      

           The Advisory Agreement became effective with respect to the Fund on
July 1, 1999.                                                                   

     The Advisory Agreement continues in effect provided that such
continuance is specifically approved at least annually by a vote of a majority  
of the Fund's outstanding voting securities or by the Fund's Board, and in      
either case, by a majority of the Directors who are not parties to the Advisory 
Agreement or interested persons of any such party. Most recently, continuance of
the Advisory Agreement for an additional annual term was approved by vote, cast 
in person, by the Board, including a majority of the Directors who are not      
"interested persons" as defined in the 1940 Act, at their meetings held on      
November 2-4, 2010.                                                             

ALLIANCEBERNSTEIN UNCONSTRAINED BOND FUND, INC.                                 

   For the services rendered by the Adviser under the Advisory
Agreement, the Fund paid the Adviser effective September 7, 2004 a fee at the   
annual rate of .50 of 1% for the first $2.5 billion, .45 of 1% of the excess of 
$2.5 billion up to $5 billion and .40 of 1% of the excess over $5 billion as a  
percentage of the Fund's average daily net assets (for the year 2004, the Fund's
previously effective advisory fee rate was waived to this amount after January  
1, 2004). The fee is accrued daily and paid monthly. The Adviser has            
contractually agreed through the Fund's fiscal year ending October 31, 2011 to  
waive its fee and bear certain expenses so that total expenses do not exceed on 
an annual basis .90%, 1.60%, 1.60%, .60%, 1.10%, .85%, and .60% of aggregate    
daily net assets, respectively, for Class A, Class B, Class C, Advisor Class,   
Class R, Class K, and Class I shares. This contractual agreement automatically  
extends each year unless the Adviser provides written notice 60 days prior to   
the Fund's fiscal year end.                                                     

       For the fiscal years ended October 31, 2008, 2009 and 2010, the
Adviser received from the Fund advisory fees of $455,521, $331,772 and $374,781,
respectively. Under the expense limitation undertaking, $489,151 was waived     
and/or reimbursed by the Adviser for the fiscal year ended 2010.                

          The Fund has, under the Advisory Agreement, assumed the obligation
for payment of all of its other expenses. As to the obtaining of services other 
than those specifically provided to the Fund by the Adviser, the Fund may employ
its own personnel. For such services, it may also utilize personnel employed by 
the Adviser or its affiliates and, in such event, the services will be provided 
to the Fund at cost and the payments will be specifically approved by the Fund's
Board. For the fiscal year ended October 31, 2010, the Fund paid to the Adviser 
a total of $88,288 with respect to such services.                               

   The Advisory Agreement became effective on January 2, 1996.

         The Advisory Agreement will continue in effect provided that such
continuance is specifically approved at least annually by a vote of a majority  
of the Fund's outstanding voting securities or by the Fund's Board, including in
either case approval by a majority of the Directors who are not parties to the  
Advisory Agreement or "interested persons," as defined by the 1940 Act, of any  
such party. Most recently, the Advisory Agreement was approved for an additional
annual term by the Board, including majority of the Directors who are not       
parties to the Advisory Agreement or interested periods of any such party, at   
their meetings held on November 2-4, 2010.                                      

ALLIANCEBERNSTEIN GLOBAL BOND FUND, INC.                                        

   For the services rendered by the Adviser under the Advisory
Agreement, the Fund paid the Adviser a fee effective September 7, 2004 at an    
annual rate of .50 of 1% for the first $2.5 billion, .45 of 1% of the excess of 
$2.5 billion up to $5 billion and .40 of 1% of the excess over $5 billion up to 
$5 billion as a percentage of the Fund's average daily net assets (for the year 
2004, the Fund's previously effective advisory fee rate was waived to this      
amount after January 1, 2004). The fee is accrued daily and paid monthly. The   
Adviser has contractually agreed through the Fund's fiscal year ending September
30, 2011 to waive its fee and bear certain expenses so that total operating     
expenses, excluding interest expense, do not exceed on an annual basis .90%,    
1.60%, 1.60%, .60%, 1.10%, .85%, and .60% of aggregate daily net assets,        
respectively, for Class A, Class B, Class C, Advisor Class, Class R, Class K,   
and Class I shares. This contractual agreement automatically extends each year  
unless the Adviser provides written notice 60 days prior to the Fund's fiscal   
year end. For the fiscal years of the Fund ended September 30, 2008, 2009 and   
2010, the Adviser received from the Fund advisory fees of $10,057,085,          
$9,417,000 and $12,980,904. Under the expense limitation undertaking $1,347,642 
was waived and/or reimbursed by the Adviser for the fiscal year ended 2010.     

          The Fund has, under the Advisory Agreement, assumed the obligation
for payment of all of its other expenses. As to the obtaining of services other 
than those specifically provided to the Fund by the Adviser, the Fund may employ
its own personnel. For such services it may also utilize personnel employed by  
the Adviser or its affiliates and, in such event, the services will be provided 
to the Fund at cost and the payments will be specifically approved by the Fund's
Board. During the Fund's fiscal year ended September 30, 2010, the Fund paid to 
the Adviser a total of $85,510 with respect to such services.                   

 The Advisory Agreement became effective on July 22, 1992.

     The Advisory Agreement continues in effect provided that such
continuance is specifically approved at least annually by the Fund's Directors  
or by a majority vote of the holders of the outstanding voting securities of the
Fund, and, in either case, by a majority of the Directors who are not parties to
the Advisory Agreement or "interested persons" as defined in the 1940 Act of any
such party. Most recently the Advisory Agreement was approved for an additional 
annual term by a vote, cast in person, of the Directors, including a majority of
the Directors who are not parties to the Advisory Agreement or interested       
persons of any such party, at their meetings held on November 2-4, 2010.        

ALLIANCEBERNSTEIN HIGH INCOME FUND, INC.                                        

   For the services rendered by the Adviser under the Advisory
Agreement, the Fund paid the Adviser a fee effective September 7, 2004 at an    
annual rate of .50 of 1% for the first $2.5 billion, .45 of 1% of the excess of 
$2.5 billion up to $5 billion, and .40 of 1% of the excess over $5 billion of   
the Fund's average daily net assets (for the year 2004, the Fund's previously   
effective advisory fee was waived to this amount after January 1, 2004). The fee
is accrued daily and paid monthly. The Adviser has contractually agreed through 
the Fund's fiscal year ending October 31, 2011 to waive its fee and bear certain
expenses so that total operating expenses, excluding interest expense, do not   
exceed on an annual basis .95%, 1.65%, 1.65%, .65%, 1.15%, .90%, and .65% of    
aggregate daily net assets, respectively, for Class A, Class B, Class C, Advisor
Class, Class R, Class K, and Class I shares. This contractual agreement         
automatically extends each year unless the Adviser provides written notice 60   
days prior to the Fund's fiscal year end. For the fiscal years ended October 31,
2008, 2009 and 2010, the Adviser received from the Fund advisory fees of        
$4,026,514, $3,771,257 and $7,787,382, respectively. Under the expense          
limitation undertaking $736,252 was waived and/or reimbursed by the Adviser for 
the fiscal year ended 2010.                                                     

          The Fund has, under the Advisory Agreement, assumed the obligation
for payment of all of its other expenses. As to the obtaining of services other 
than those specifically provided to the Fund by the Adviser, the Fund may employ
its own personnel. For such services, it may also utilize personnel employed by 
the Adviser or its affiliates and, in such event, the services will be provided 
to the Fund at cost and the payments will be specifically approved by the Fund's
Board. The Fund paid to the Adviser a total of $89,160 in respect of such       
services during the Fund's fiscal year ended October 31, 2010.                  

    The Advisory Agreement became effective on February 1, 1994.

     The Advisory Agreement continues in effect provided that such
continuance is approved at least annually by a vote of a majority of the Fund's 
outstanding voting securities or by the Fund's Board, including in either case, 
approval by a majority of the Directors who are not parties to the Advisory     
Agreement or interested persons of any such party as defined by the Act. Most   
recently, continuance of the Advisory Agreement was approved for an additional  
annual term by the Board, including a majority of the Directors who are not     
"interested persons" as defined in the 1940 Act, at their meetings held on      
November 2-4, 2010.                                                             

        The Adviser may act as an investment adviser to other persons, firms
or corporations, including investment companies, and is the investment adviser  
to the following registered investment companies: AllianceBernstein Balanced    
Shares, Inc., AllianceBernstein Blended Style Series, Inc., AllianceBernstein   
Cap Fund, Inc., AllianceBernstein Corporate Shares, AllianceBernstein Core      
Opportunities Fund, Inc., AllianceBernstein Equity Income Fund, Inc.,           
AllianceBernstein Exchange Reserves, AllianceBernstein Fixed-Income Shares,     
Inc., AllianceBernstein Global Bond Fund, Inc., AllianceBernstein Global Growth 
Fund, Inc., AllianceBernstein Global Real Estate Investment Fund, Inc.,         
AllianceBernstein Global Thematic Growth Fund, Inc., AllianceBernstein Greater  
China '97 Fund, Inc., AllianceBernstein Growth and Income Fund, Inc.,           
AllianceBernstein High Income Fund, Inc., AllianceBernstein Institutional Funds,
Inc., AllianceBernstein International Growth Fund, Inc., AllianceBernstein Large
Cap Growth Fund, Inc., AllianceBernstein Municipal Income Fund, Inc.,           
AllianceBernstein Municipal Income Fund II, AllianceBernstein Small/Mid Cap     
Growth Fund, Inc., AllianceBernstein Trust, AllianceBernstein Unconstrained Bond
Fund, Inc., AllianceBernstein Variable Products Series Fund, Inc., Sanford C.   
Bernstein Fund, Inc., Sanford C. Bernstein Fund II, Inc., The AllianceBernstein 
Pooling Portfolios and The AllianceBernstein Portfolios, all registered open-end
investment companies; and to AllianceBernstein Global High Income Fund, Inc.,   
AllianceBernstein Income Fund, Inc., AllianceBernstein National Municipal Income
Fund, Inc., Alliance California Municipal Income Fund, Inc., Alliance New York  
Municipal Income Fund, Inc., and The Ibero-America Fund, Inc., all registered   
closed-end investment companies.                                                

Additional Information About the Funds' Portfolio Managers                      
----------------------------------------------------------                      

ALLIANCEBERNSTEIN INTERMEDIATE BOND PORTFOLIO                                   

           The management of and investment decisions for the Fund's portfolio
are made by the U.S. Investment Grade: Core Fixed Income Investment Team. Mr.   
Paul J. DeNoon, Mr. Shawn E. Keegan, Ms. Alison M. Martier and Mr. Greg J.      
Wilensky are the investment professionals(1) with the most significant          
responsibility for the day-to-day management of the Fund's portfolio. For       
additional information about the portfolio management of the Fund, see          
"Management of the Fund - Fund Managers" in the Fund's prospectuses.            

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

           The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio manager as of October 31, 2010 are set     
forth below:                                                                    

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(2)
------------------------------------------------

Mr. Paul J. DeNoon                                 None             
Mr. Shawn E. Keegan                            $0 - $10,000(3)      
Ms. Alison M. Martier                              None             
Mr. Douglas J. Peebles                             None             
Mr. Greg J. Wilensky                               None             

--------                                                                        
(2)   The dollar range presented above include any vested shares awarded under  
the Adviser's Partners Compensation Plan (the "Plan").              
(3)   For information presented as of the fiscal year ended October 31, 2010,   
   with respect to Mr. Keegan, if the unvested shares awarded for calendar
      year 2010 and previous years under the Plan were included, the range would
be $10,001 - $50,000.                                               
          As of October 31, 2010, employees of the Adviser had approximately
$7,290,416 invested in shares of the Fund and approximately $408,512,031        
invested in shares of all AllianceBernstein Mutual Funds (excluding             
AllianceBernstein money market funds) through their interests in certain        
deferred compensation plans, including the Partners Compensation Plan, including
both vested and unvested amounts.                                               

     The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and  
other accounts over which the Fund's portfolio managers also have day-to-day    
management responsibilities. The tables provide the numbers of such accounts,   
the total assets in such accounts and the number of accounts and total assets   
whose fees are based on performance. The information is provided as of October  
31, 2010.                                                                       
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES 
(excluding the Fund)
--------------------------------------------------------------------------------
                                                       Total
                                             Number of     Assets of
                   Total       Total          Registered    Registered
                   Number of   Assets of      Investment    Investment
                  Registered  Registered     Companies     Companies
                     Investment  Investment     Managed with  Managed with
                     Companies   Companies      Performance-  Performance-
Portfolio Manager       Managed     Managed        based Fees    based Fees     
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon            91    $22,563,000,000       90     $22,563,000,000
Mr. Shawn E. Keegan           46     $9,959,000,000       46      $9,559,000,000
Ms. Alison M. Martier         45     $9,691,000,000       45      $9,691,000,000
Mr. Douglas J. Peebles       123    $25,565,000,000      122     $25,565,000,000
Mr. Greg J. Wilensky         108    $12,840,000,000      107     $12,840,000,000

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

OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------
                                         Number of     Total
                Total                        Other         Assets of
                   Number of                    Pooled        Other Pooled
                 Other       Total Assets of  Investment    Investment
               Pooled      Other Pooled     Vehicles      Vehicles
                   Investment  Investment       Managed with  Managed with
                   Vehicles    Vehicles         Performance-  Performance-
Portfolio Manager     Managed     Managed          based Fees    based Fees     
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon        102     $32,471,000,000          97    $32,105,000,000
Mr. Shawn E. Keegan        51      $4,576,000,000          51     $4,576,000,000
Ms. Alison M. Martier      42        $250,000,000          42       $250,000,000
Mr. Douglas J. Peebles    151     $45,009,000,000         146    $44,642,000,000
Mr. Greg J. Wilensky       87      $3,012,000,000          82     $2,646,000,000

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

OTHER ACCOUNTS
--------------------------------------------------------------------------------
                                                       Total
                                             Number of     Assets of
             Total                       Other         Other
                Number of                   Accounts      Accounts
                    Other      Total Assets of  Managed with  Managed with
                    Accounts   Other Accounts   Performance-  Performance-
Portfolio Manager      Managed    Managed          based Fees    based Fees     
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon         232    $34,313,000,000         226    $31,467,000,000
Mr. Shawn E. Keegan        186    $54,710,000,000         182    $52,438,000,000
Ms. Alison M. Martier       82     $6,305,000,000          81     $6,173,000,000
Mr. Douglas J. Peebles     406    $89,804,000,000         396    $84,499,000,000
Mr. Greg J. Wilensky       179    $11,037,000,000         177    $10,215,000,000

ALLIANCEBERNSTEIN UNCONSTRAINED BOND FUND, INC.                                 

           The management of and investment decisions for the Fund's portfolio
are made by the Global Fixed Income Investment Team and the Global Credit       
Investment Team. Mr. Paul J. DeNoon, Mr. Joran Laird, Mr. Douglas J. Peebles,   
Mr. Matthew S. Sheridan and Mr. Greg J. Wilensky are the investment             
professionals(4) with the most significant responsibility for the day-to-day    
management of the Fund's portfolio. For additional information about the        
portfolio management of the Fund, see "Management of the Fund - Portfolio       
Managers" in the Fund's prospectuses.                                           

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

           The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of October 31, 2010 are set    
forth below:                                                                    

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(5)

Mr. Paul J. DeNoon                              None                
Mr. Joran Laird                                 None                
Mr. Douglas J. Peebles                      Over $100,000           
Mr. Matthew S. Sheridan                         None                
Mr. Greg J. Wilensky                            None                

--------                                                                        
(5)   The dollar range presented above include any vested shares awarded under  
the Adviser's Partners Compensation Plan (the "Plan").              

        As of October 31, 2010, employees had approximately $118,940,466
invested in shares of all AllianceBernstein Mutual Funds (excluding             
AllianceBernstein money market funds) through their interests in certain        
deferred compensation plans, including the Partners Compensation Plan, including
both vested and unvested amounts.                                               

     The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and  
other accounts over which the Fund's portfolio managers also have day-to-day    
management responsibilities. The tables provide the numbers of such accounts,   
the total assets in such accounts and the number of accounts and total assets   
whose fees are based on performance. The information is provided as of October  
31, 2010.                                                                       

--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES 
(excluding the Fund)
--------------------------------------------------------------------------------
                                                       Total
                                             Number of     Assets of
                   Total       Total          Registered    Registered
                   Number of   Assets of      Investment    Investment
                  Registered  Registered     Companies     Companies
                     Investment  Investment     Managed with  Managed with
                     Companies   Companies      Performance-  Performance-
Portfolio Manager       Managed     Managed        based Fees    based Fees     
--------------------------------------------------------------------------------

Mr. Paul J. DeNoon           91     $23,087,000,000      1             None     
Mr. Joran Laird              12     $10,296,000,000     None           None     
Mr. Douglas J. Peebles      123     $26,089,000,000      1             None     
Mr. Matthew S. Sheridan      13     $10,447,000,000     None           None     
Mr. Greg J. Wilensky        108     $13,364,000,000      1             None     

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

OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------
                                                             Total
                                                   Number of     Assets of
                  Total                        Other         Other
                   Number of                    Pooled        Pooled
                       Other       Total Assets of  Investment    Investment
                     Pooled      Other Pooled     Vehicles      Vehicles
                         Investment  Investment       Managed with  Managed with
                         Vehicles    Vehicles         Performance-  Performance-
Portfolio Manager        Managed     Managed          based Fees    based Fees  
--------------------------------------------------------------------------------

Mr. Paul J. DeNoon           102     $32,471,000,000        5       $367,000,000
Mr. Joran Laird               26     $25,973,000,000       None          None   
Mr. Douglas J. Peebles       151     $45,009,000,000        5       $367,000,000
Mr. Matthew S. Sheridan       33     $29,482,000,000       None          None   
Mr. Greg J. Wilensky          87      $3,012,000,000        5       $367,000,000

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

OTHER ACCOUNTS
--------------------------------------------------------------------------------
                                                         Total
                                               Number of     Assets of
               Total                       Other         Other
                  Number of                   Accounts      Accounts
                      Other      Total Assets of  Managed with  Managed with
                      Accounts   Other Accounts   Performance-  Performance-
Portfolio Manager       Managed    Managed          based Fees    based Fees    
--------------------------------------------------------------------------------

Mr. Paul J. DeNoon          232    $34,313,000,000         6      $2,846,000,000
Mr. Joran Laird              49    $16,774,000,000         4      $2,025,000,000
Mr. Douglas J. Peebles      406    $89,804,000,000        10      $5,305,000,000
Mr. Matthew S. Sheridan      54    $23,288,000,000         4      $2,025,000,000
Mr. Greg J. Wilensky        179    $11,037,000,000         2        $822,000,000

ALLIANCEBERNSTEIN GLOBAL BOND FUND, INC.                                        

           The management of and investment decisions for the Fund's portfolio
are made by the Global Fixed Income Investment Team. Mr. Paul J. DeNoon, Mr.    
Scott DiMaggio, Mr. Michael L. Mon, Mr. Douglas J. Peebles and Mr. Matthew S.   
Sheridan are the investment professionals(6) with the most significant          
responsibility for the day-to-day management of the Fund's portfolio. For       
additional information about the portfolio management of the Fund, see          
"Management of the Fund - Portfolio Managers" in the Fund's prospectuses.       

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

           The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of September 30, 2010 are set  
forth below:                                                                    

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(7)

Mr. Paul J. DeNoon                             None                 
Mr. Scott DiMaggio                             None                 
Mr. Michael L. Mon                             None                 
Mr. Douglas J. Peebles                         None                 
Mr. Matthew S. Sheridan                        None                 

--------                                                                        
(7)   The dollar range presented above include any vested shares awarded under  
the Adviser's Partners Compensation Plan (the "Plan").              

            As of September 30, 2010, employees of the Adviser had approximately
$398,751,432 invested in shares of all AllianceBernstein Mutual Funds (excluding
AllianceBernstein money market funds) through their interests in certain        
deferred compensation plans, including the Partners Compensation Plan, including
both vested and unvested amounts.                                               

     The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and  
other accounts over which the Fund's portfolio managers also have day-to-day    
management responsibilities. The tables provide the numbers of such accounts,   
the total assets in such accounts and the number of accounts and total assets   
whose fees are based on performance. The information is provided as of September
30, 2010.                                                                       
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES 
(excluding the Fund)
--------------------------------------------------------------------------------
                                                           Total
                                                 Number of     Assets of
                     Total       Total            Registered    Registered
                     Number of   Assets of        Investment    Investment
                    Registered  Registered       Companies     Companies
                       Investment  Investment       Managed with  Managed with
                       Companies   Companies        Performance-  Performance-
Portfolio Manager       Managed     Managed          based Fees    based Fees   
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon           91     $20,366,000,000        1           None     
Mr. Scott DiMaggio           14     $8,880,000,000       None          None     
Mr. Michael L. Mon           12     $7,145,000,000       None          None     
Mr. Douglas J. Peebles      139     $23,835,000,000        1           None     
Mr. Matthew S. Sheridan      12     $7,145,000,000       None          None     

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

OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------
                                                             Total
                                                   Number of     Assets of
                  Total                        Other         Other
                   Number of                    Pooled        Pooled
                       Other       Total Assets of  Investment    Investment
                     Pooled      Other Pooled     Vehicles      Vehicles
                         Investment  Investment       Managed with  Managed with
                         Vehicles    Vehicles         Performance-  Performance-
Portfolio Manager        Managed     Managed          based Fees    based Fees  
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon           101     $31,876,000,000         5      $366,000,000
Mr. Scott DiMaggio            29     $25,714,000,000        None        None    
Mr. Michael L. Mon            34     $28,885,000,000        None        None    
Mr. Douglas J. Peebles       150     $43,980,000,000         5      $366,000,000
Mr. Matthew S. Sheridan       34     $28,885,000,000        None        None    

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

OTHER ACCOUNTS
--------------------------------------------------------------------------------
                                                         Total
                                               Number of     Assets of
               Total                       Other         Other
                  Number of                   Accounts      Accounts
                      Other      Total Assets of  Managed with  Managed with
                      Accounts   Other Accounts   Performance-  Performance-
Portfolio Manager       Managed    Managed          based Fees    based Fees    
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon          233    $34,296,000,000         6      $2,810,000,000
Mr. Scott DiMaggio           84    $20,640,000,000         4      $1,996,000,000
Mr. Michael L. Mon           53    $22,616,000,000         4      $1,996,000,000
Mr. Douglas J. Peebles    1,891    $91,278,000,000        10      $5,267,000,000
Mr. Matthew S. Sheridan      53    $22,616,000,000         4      $1,996,000,000

ALLIANCEBERNSTEIN HIGH INCOME FUND, INC.                                        

           The management of and investment decisions for the Fund's portfolio
are made by the Global Fixed Income Team and Global Credit Investment Team. Mr. 
Paul DeNoon, Mr. Gershon Distenfeld, Mr. Douglas Peebles, Mr. Marco Santamaria  
and Mr. Matthew Sheridan are the investment professionals(8) with the most      
significant responsibility for the day-to-day management of the Fund's          
portfolio. For additional information about the portfolio management of the     
Fund, see "Management of the Fund - Portfolio Managers" in the Fund's           
prospectus.                                                                     

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

           The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of October 31, 2010 are set    
forth below:                                                                    

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(9)

Mr. Paul J. DeNoon                             None(10)             
Mr. Gershon Distenfeld                         None                 
Mr. Douglas J. Peebles                         None(11)             
Mr. Marco Santamaria                           None                 
Mr. Matthew S. Sheridan                        None                 

--------                                                                        
(9)   The dollar range presented above include any vested shares awarded under  
the Adviser's Partners Compensation Plan (the "Plan").              

(10)  For information presented as of the fiscal year ended October 31, 2010,   
   with respect to Mr. DeNoon, if the unvested shares awarded for calendar
      year 2010 and previous years under the Plan were included, the range would
be $500,001-$1,000,000.                                             

(11)  For information presented as of the fiscal year ended October 31, 2010,   
    with respect to Mr. Peebles, if the unvested shares awarded for calendar
      year 2010 and previous years under the Plan were included, the range would
be $100,001-$500,000.                                               

          As of October 31, 2010, employees of the Adviser had approximately
$12,754,298 invested in shares of the Fund and approximately $408,512,031       
invested in shares of all AllianceBernstein Mutual Funds (excluding             
AllianceBernstein money market funds) through their interests in certain        
deferred compensation plans, including the Partners Compensation Plan, including
both vested and unvested amounts.                                               

     The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and  
other accounts over which the Fund's portfolio managers also has day-to-day     
management responsibilities. The tables provide the numbers of such accounts,   
the total assets in such accounts and the number of accounts and total assets   
whose fees are based on performance. The information is provided as of October  
31, 2010.                                                                       
--------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES 
(excluding the Fund)
--------------------------------------------------------------------------------
                                                             Total
                                                   Number of     Assets of
                      Total       Total             Registered    Registered
                      Number of   Assets of         Investment    Investment
                     Registered  Registered        Companies     Companies
                        Investment  Investment        Managed with  Managed with
                        Companies   Companies         Performance-  Performance-
Portfolio Manager       Managed     Managed           based Fees    based Fees  
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon           91     $20,843,000,000         1           None    
Mr. Gershon Distenfeld       30      $2,703,000,000        None         None    
Mr. Douglas J. Peebles      123     $23,845,000,000         1           None    
Mr. Marco Santamaria          1        $152,000,000        None         None    
Mr. Matthew S. Sheridan      12      $8,130,000,000        None         None    

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

OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------
                                                             Total
                                                   Number of     Assets of
                  Total                        Other         Other
                   Number of                    Pooled        Pooled
                       Other       Total Assets of  Investment    Investment
                     Pooled      Other Pooled     Vehicles      Vehicles
                         Investment  Investment       Managed with  Managed with
                         Vehicles    Vehicles         Performance-  Performance-
Portfolio Manager        Managed     Managed          based Fees    based Fees  
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon           102     $32,471,000,000         5      $367,000,000
Mr. Gershon Distenfeld        44      $4,881,000,000       None         None    
Mr. Douglas J. Peebles       151     $45,009,000,000         5      $367,000,000
Mr. Marco Santamaria           7      $3,509,000,000       None         None    
Mr. Matthew S. Sheridan       33     $29,482,000,000       None         None    

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

OTHER ACCOUNTS
--------------------------------------------------------------------------------
                                                         Total
                                               Number of     Assets of
               Total                       Other         Other
                  Number of                   Accounts      Accounts
                      Other      Total Assets of  Managed with  Managed with
                      Accounts   Other Accounts   Performance-  Performance-
Portfolio Manager       Managed    Managed          based Fees    based Fees    
--------------------------------------------------------------------------------
Mr. Paul J. DeNoon          232    $34,313,000,000        6       $2,846,000,000
Mr. Gershon Distenfeld      141    $52,931,000,000        3       $2,140,000,000
Mr. Douglas J. Peebles      406    $89,804,000,000       10       $5,305,000,000
Mr. Marco Santamaria          5     $6,513,000,000      None           None     
Mr. Matthew S. Sheridan      54    $23,288,000,000        4       $2,025,000,000

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

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

    Employee Personal Trading. The Adviser has adopted a Code of
Business Conduct and Ethics that is designed to detect and prevent conflicts of 
interest when investment professionals and other personnel of the Adviser own,  
buy or sell securities which may be owned by, or bought or sold for, clients.   
Personal securities transactions by an employee may raise a potential conflict  
of interest when an employee owns or trades in a security that is owned or      
considered for purchase or sale by a client, or recommended for purchase or sale
by an employee to a client. Subject to the reporting requirements and other     
limitations of its Code of Business Conduct and Ethics, the Adviser permits its 
employees to engage in personal securities transactions, and also allows them to
acquire investments in the AllianceBernstein Mutual Funds through direct        
purchase and/or notionally in connection with deferred incentive compensation   
awards. The Adviser's Code of Ethics and Business Conduct requires disclosure of
all personal accounts and maintenance of brokerage accounts with designated     
broker-dealers approved by the Adviser. The Code also requires preclearance of  
all securities transactions (except transactions in open-end mutual funds) and  
imposes a 90-day holding period for securities purchased by employees to        
discourage short-term trading.                                                  

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

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

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

          To address these conflicts of interest, the Adviser's policies and
procedures require, among other things, the prompt dissemination to investment  
professionals of any initial or changed investment recommendations by analysts; 
the aggregation of orders to facilitate best execution for all accounts; price  
averaging for all aggregated orders; objective allocation for limited investment
opportunities (e.g., on a rotational basis) to ensure fair and equitable

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Alliancebernstein High Income Fund Inc · 497 · On 2/4/11

Filed On 2/4/11 4:29pm ET · SEC File 33-72460 · Accession Number 919574-11-553

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