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Ab Cap Fund

Filed: 1 Feb 22, 2:24pm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-01716

 

 

AB CAP FUND, INC.

(Exact name of registrant as specified in charter)

 

 

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

 

 

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: November 30, 2021

Date of reporting period: November 30, 2021

 

 

 


ITEM 1. REPORTS TO STOCKHOLDERS.

 


NOV    11.30.21

LOGO

ANNUAL REPORT

AB ALL CHINA EQUITY PORTFOLIO

 

LOGO

 

As of January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, the Fund’s annual and semi-annual shareholder reports are no longer sent by mail, unless you specifically requested paper copies of the reports. Instead, the reports are made available on a website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

You may elect to receive all future reports in paper form free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call the Fund at (800) 221 5672. Your election to receive reports in paper form will apply to all funds held in your account with your financial intermediary or, if you invest directly, to all AB Mutual Funds you hold.


 

 

 
Investment Products Offered 

  Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AB’s website at www.abfunds.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AB at (800) 227 4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-PORT may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC 0330. AB publishes full portfolio holdings for the Fund monthly at www.abfunds.com.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AB family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the Adviser of the funds.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein® is a registered service mark used by permission of the owner, AllianceBernstein L.P.


 

FROM THE PRESIDENT  LOGO

Dear Shareholder,

We’re pleased to provide this report for the AB All China Equity Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

At AB, we’re striving to help our clients achieve better outcomes by:

 

+  

Fostering diverse perspectives that give us a distinctive approach to navigating global capital markets

 

+  

Applying differentiated investment insights through a connected global research network

 

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Embracing innovation to design better ways to invest and leading-edge mutual-fund solutions

Whether you’re an individual investor or a multibillion-dollar institution, we’re putting our knowledge and experience to work for you every day.

For more information about AB’s comprehensive range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in AB mutual funds—and for placing your trust in our firm.

Sincerely,

 

LOGO

Onur Erzan

President and Chief Executive Officer, AB Mutual Funds

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    1


 

ANNUAL REPORT

 

January 5, 2022

This report provides management’s discussion of fund performance for the AB All China Equity Portfolio for the annual reporting period ended November 30, 2021.

The Fund’s investment objective is to seek long-term growth of capital.

NAV RETURNS AS OF NOVEMBER 30, 2021 (unaudited)

 

   6 Months   12 Months 
AB ALL CHINA EQUITY PORTFOLIO    
Class A Shares   -15.12%    -8.30% 
Advisor Class Shares1   -15.00%    -8.07% 
MSCI China All Shares Index (net)   -14.64%    -7.89% 

 

1

Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Morgan Stanley Capital International (“MSCI”) China All Shares Index (net), for the six- and 12-month periods ended November 30, 2021.

All share classes of the Fund underperformed the benchmark for the six- and 12-month periods ended November 30, 2021, before sales charges. Lingering effects of the pandemic have delayed a recovery in consumer industries, such as travel and restaurants, and uncertainty about the real estate market undermined a number of the Fund’s holdings. However, companies benefiting from structural transformation, such as renewable energy businesses, and high-quality consumer staples names showed resilience, contributing positively to the Fund’s performance.

During the 12-month period, stock selection within the technology and health-care sectors detracted, relative to the benchmark, while selection in industrials and consumer discretionary contributed. During the six-month period, stock selection within the technology and consumer-discretionary sectors detracted, while selection in consumer staples and utilities contributed.

The Fund did not utilize derivatives during either period.

 

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MARKET REVIEW AND INVESTMENT STRATEGY

Chinese equities fell during both the six- and 12-month periods ended November 30, 2021. Slowing economic growth, the government’s growth-constraining zero-COVID strategy, instability in the real estate market and regulatory restrictions on “new economy” businesses combined to fuel investor anxiety.

While this risk-averse environment has generated headwinds for the Fund over the past year, it has also created opportunities for the Fund’s Senior Investment Management Team to identify attractive opportunities trading at compelling prices, particularly as Chinese companies continue to benefit from the ongoing global economic reopening and structural changes in the Chinese economy’s growth drivers.

INVESTMENT POLICIES

The Adviser seeks to achieve the Fund’s investment objective by investing, under normal circumstances, at least 80% of the Fund’s net assets in a portfolio of equity securities of companies economically tied to the People’s Republic of China (“China”) (including Hong Kong). A company is considered to be economically tied to China if it: (i) is domiciled or organized in China; (ii) has securities that are traded principally in China; or (iii) conducts a substantial part of its economic activities in China. Equity securities may include common stocks, preferred stocks, the equity securities of real estate investment trusts, depositary receipts and derivative instruments related to equity securities. The Adviser expects to invest Fund assets both in shares of companies that trade on the Shanghai Stock Exchange or the Shenzhen Stock Exchange (“China A shares”) and shares of companies economically tied to China that trade in Hong Kong or outside of China.

The Adviser believes that, over time, securities that are undervalued by the market relative to their long-term earnings power can provide high returns. The Adviser utilizes fundamental analysis and its quantitative models to attempt to identify these securities for investment by the Fund, attempting to balance factors relating to valuation, company quality and investor sentiment, and will seek to build a portfolio that delivers attractive risk-adjusted returns.

The Adviser may, but frequently will not, hedge the foreign currency exposure resulting from the Fund’s security positions through the use of currency-related derivatives. The Fund is “non-diversified”.

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    3


 

DISCLOSURES AND RISKS

 

Benchmark Disclosure

The MSCI China All Shares Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI China All Shares Index (net) captures large- and mid-cap representation across China A-shares, B-shares, H-shares, Red-chips, P-chips and foreign listings (e.g., American depositary receipts). The index aims to reflect the opportunity set of China share classes listed in Hong Kong, Shanghai, Shenzhen and outside of China. MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices, any securities or financial products. This report is not approved, reviewed or produced by MSCI. Net returns reflect the reinvestment of dividends after deduction of non-US withholding tax. An investor cannot invest directly in an index, and its results are not indicative for any specific investment, including the Fund.

A Word About Risk

Market Risk: The value of the Fund’s assets will fluctuate as the stock market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events, including public health crises (including the occurrence of a contagious disease or illness), that affect large portions of the market. It includes the risk that a particular style of investing, such as the Fund’s value approach, may underperform the market generally.

Foreign (Non-US) Risk: Investments in securities of non-US issuers may involve more risk than those of US issuers. These securities may fluctuate more widely in price and may be more difficult to trade due to adverse market, economic, political, regulatory or other factors. Investments in emerging-market countries such as China may involve more risk than investments in developed countries because the markets in emerging-market countries are less developed and less liquid and are subject to increased economic, political, regulatory or other uncertainties. In addition, the value of the Fund’s investments may decline because of factors such as unfavorable or unsuccessful government actions and reduction in government or central bank support.

China/Single Country Risk: Investments in issuers located in a particular country or geographic region may have more risk because of particular market factors affecting that country or region, including political instability, geopolitical risks or unpredictable economic conditions. Risks of investments in securities of companies in China include the volatility of the Chinese stock market, heavy dependence on exports, which may be affected adversely by trade barriers or disputes or may decrease, sometimes

 

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DISCLOSURES AND RISKS (continued)

 

significantly, when the world economy weakens, and the continuing importance of the role of the Chinese government, which may take actions that affect economic and market practices. While the Chinese economy has grown at a rapid rate in recent years, the rate of growth has been declining, and there can be no assurance that China’s economy will continue to grow in the future. Investments in China A shares are subject to quotas that may restrict daily trading and to additional risks that could affect liquidity compared to investments in companies in developed markets. Risks of investments in companies based in Hong Kong include heavy reliance on the US economy and regional economies, particularly the Chinese economy, which makes these investments vulnerable to changes in these economies.

Currency Risk: Fluctuations in currency exchange rates may negatively affect the value of the Fund’s investments in equity securities denominated in foreign currencies or reduce the Fund’s returns. Emerging-market currencies may be more volatile and less liquid, and subject to significantly greater risk of currency controls and convertibility restrictions, than currencies of developed countries.

Depositary Receipts Risk: Investing in depositary receipts involves risks that are similar to the risks of direct investments in foreign securities. For example, investing in depositary receipts may involve risks relating to political, economic or regulatory conditions in foreign countries. In addition, the issuers of the securities underlying certain depositary receipts are under no obligation to distribute shareholder communications or pass through any voting rights with respect to the deposited securities to the holders of such receipts.

Illiquid Investments Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Foreign fixed-income securities may have more illiquid investments risk because secondary trading markets for these securities may be smaller and less well-developed and the securities may trade less frequently. Illiquid investments risk may be higher in a rising interest-rate environment, when the value and liquidity of fixed-income securities generally go down.

Non-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. Accordingly, changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value (“NAV”).

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    5


 

DISCLOSURES AND RISKS (continued)

 

Industry/Sector Risk: Investments in a particular industry or group of related industries may have more risk because market or economic factors affecting that industry could have a significant effect on the value of the Fund’s 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. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected.

These risks are fully discussed in the Fund’s prospectus. As with all investments, you may lose money by investing in the Fund.

An Important Note About Historical Performance

The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance shown in this report represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.abfunds.com.

All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund’s quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares. Returns for the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.

 

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HISTORICAL PERFORMANCE

 

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

7/25/20181 TO 11/30/2021

 

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB All China Equity Portfolio Class A shares (from 7/25/20181 to 11/30/2021) as compared to the performance of the Fund’s benchmark. The chart reflects the deduction of the maximum 4.25% sales charge from the initial $10,000 investment in the Fund and assumes the reinvestment of dividends and capital gains distributions.

 

1

Inception date: 7/25/2018.

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    7


 

HISTORICAL PERFORMANCE (continued)

 

AVERAGE ANNUAL RETURNS AS OF NOVEMBER 30, 2021 (unaudited)

 

  NAV Returns  SEC Returns
(reflects applicable
sales charges)
 
CLASS A SHARES  
1 Year  -8.30%   -12.21% 
Since Inception1  4.65%   3.31% 
ADVISOR CLASS SHARES2  
1 Year  -8.07%   -8.07% 
Since Inception1  4.92%   4.92% 

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratios as 1.56% and 1.31% for Class A and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratios, exclusive of acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs, to 1.50% and 1.25% for Class A and Advisor Class shares, respectively. These waivers/reimbursements may not be terminated before February 28, 2022, and may be extended by the Adviser for additional one-year terms. Any fees waived and expenses borne by the Adviser may be reimbursed by the Fund until the end of the third fiscal year after the fiscal period in which the fee was waived or the expense was borne, provided that no reimbursement payment will be made that would cause the Fund’s covered operating expenses to exceed the applicable expense limitations. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

 

1

Inception date: 7/25/2018.

 

2

This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns. Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

 

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HISTORICAL PERFORMANCE (continued)

 

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2021 (unaudited)

 

   SEC Returns
(reflects applicable
sales charges)
 
CLASS A SHARES  
1 Year   -18.38% 
Since Inception1   2.75% 
ADVISOR CLASS SHARES2  
1 Year   -14.63% 
Since Inception1   4.29% 

 

1

Inception date: 7/25/2018.

 

2

Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    9


 

EXPENSE EXAMPLE

(unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

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EXPENSE EXAMPLE (continued)

 

 

  Beginning
Account Value
June 1, 2021
  Ending
Account Value
November 30, 2021
  Expenses Paid
During Period*
  Annualized
Expense Ratio*
 
Class A    

Actual

 $1,000  $848.80  $6.72   1.45

Hypothetical**

 $1,000  $1,017.80  $7.33   1.45
Advisor Class    

Actual

 $1,000  $850.00  $5.57   1.20

Hypothetical**

 $    1,000  $    1,019.05  $    6.07   1.20

 

*

Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

**

Assumes 5% annual return before expenses.

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    11


 

PORTFOLIO SUMMARY

November 30, 2021 (unaudited)

 

PORTFOLIO STATISTICS

Net Assets ($mil): $187.3

 

 

 

LOGO

 

 

 

LOGO

 

1

All data are as of November 30, 2021. The Fund’s sector and country breakdowns are expressed as a percentage of total investments (excluding security lending collateral) and may vary over time.

Please note: The sector classifications presented herein are based on the Global Industry Classification Standard (GICS) which was developed by Morgan Stanley Capital International and Standard & Poor’s. The components are divided into sector, industry group, and industry sub-indices as classified by the GICS for each of the market capitalization indices in the broad market. These sector classifications are broadly defined. The “Portfolio of Investments” section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund’s prospectus.

 

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PORTFOLIO SUMMARY (continued)

November 30, 2021 (unaudited)

 

TEN LARGEST HOLDINGS1

 

Company  U.S. $ Value   Percent of
Net Assets
 
Tencent Holdings Ltd.  $15,189,204    8.1
Alibaba Group Holding Ltd.   8,540,485    4.6 
Contemporary Amperex Technology Co., Ltd. – Class A   6,847,580    3.7 
Shanghai Putailai New Energy Technology Co., Ltd. – Class A   5,133,225    2.7 
Li Ning Co., Ltd.   4,880,522    2.6 
Wuxi Lead Intelligent Equipment Co., Ltd. – Class A   4,231,884    2.3 
Great Wall Motor Co., Ltd. – Class H   4,013,854    2.1 
Anhui Yingjia Distillery Co., Ltd. – Class A   3,955,360    2.1 
GoerTek, Inc. – Class A   3,953,971    2.1 
JD.com, Inc. – Class A & (ADR)   3,734,494    2.0 
  $  60,480,579    32.3

 

1

Long-term investments.

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    13


 

PORTFOLIO OF INVESTMENTS

November 30, 2021

 

Company  Shares  U.S. $ Value 

 

 

COMMON STOCKS – 98.6%

   

Consumer Discretionary – 22.2%

   

Auto Components – 1.6%

   

Anhui Zhongding Sealing Parts Co., Ltd.

   346,400  $1,287,624 

Huayu Automotive Systems Co., Ltd. – Class A

   431,800   1,747,994 
   

 

 

 
    3,035,618 
   

 

 

 

Automobiles – 3.0%

 

Dongfeng Motor Group Co., Ltd. – Class H

   1,822,000   1,691,419 

Great Wall Motor Co., Ltd. – Class H

   966,000   4,013,854 
   

 

 

 
    5,705,273 
   

 

 

 

Hotels, Restaurants & Leisure – 4.7%

   

Galaxy Entertainment Group Ltd.(a)

   492,000   2,674,724 

Jiumaojiu International Holdings Ltd.(b)

   909,000   1,877,533 

Shenzhen Overseas Chinese Town Co., Ltd. – Class A

   1,141,900   1,058,052 

Tongcheng-Elong Holdings Ltd.(a)

   1,526,000   3,142,607 
   

 

 

 
    8,752,916 
   

 

 

 

Internet & Direct Marketing Retail – 7.1%

   

Alibaba Group Holding Ltd.(a)

   534,860   8,540,485 

JD.com, Inc. (ADR)(a)

   19,950   1,677,995 

JD.com, Inc. – Class A(a)

   48,700   2,056,499 

Pinduoduo, Inc. (ADR)(a)

   16,300   1,083,950 
   

 

 

 
    13,358,929 
   

 

 

 

Specialty Retail – 1.7%

   

China Tourism Group Duty Free Corp., Ltd. – Class A

   25,831   834,666 

Zhongsheng Group Holdings Ltd.

   279,500   2,289,337 
   

 

 

 
    3,124,003 
   

 

 

 

Textiles, Apparel & Luxury Goods – 4.1%

   

Bosideng International Holdings Ltd.

   1,942,000   1,366,631 

Li Ning Co., Ltd.

   431,500   4,880,522 

Shenzhou International Group Holdings Ltd.

   65,300   1,226,194 

Stella International Holdings Ltd.

   180,000   192,829 
   

 

 

 
    7,666,176 
   

 

 

 
    41,642,915 
   

 

 

 

Financials – 13.0%

   

Banks – 8.6%

   

Bank of Hangzhou Co., Ltd. – Class A

   957,400   2,058,196 

Bank of Nanjing Co., Ltd. – Class A

   1,358,500   1,929,737 

China Construction Bank Corp. – Class H

   4,959,000   3,231,317 

China Merchants Bank Co., Ltd. – Class H

   367,000   2,843,125 

Industrial Bank Co., Ltd. – Class A

   1,219,800   3,440,510 

Ping An Bank Co., Ltd. – Class A

   940,273   2,573,483 
   

 

 

 
    16,076,368 
   

 

 

 

 

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PORTFOLIO OF INVESTMENTS (continued)

 

Company  Shares  U.S. $ Value 

 

 

Capital Markets – 3.6%

   

CITIC Securities Co., Ltd. – Class A

   572,710  $2,135,251 

GF Securities Co., Ltd. – Class H

   1,236,000   2,153,401 

Guotai Junan Securities Co., Ltd.(b)

   1,832,120   2,442,498 
   

 

 

 
    6,731,150 
   

 

 

 

Insurance – 0.8%

   

Ping An Insurance Group Co. of China Ltd. – Class A

   200,093   1,514,300 
   

 

 

 
    24,321,818 
   

 

 

 

Communication Services – 12.2%

   

Entertainment – 2.3%

   

G-bits Network Technology Xiamen Co., Ltd. – Class A

   29,600   1,753,349 

NetEase, Inc.(c)

   114,900   2,480,673 
   

 

 

 
    4,234,022 
   

 

 

 

Interactive Media & Services – 8.1%

   

Tencent Holdings Ltd.

   260,450   15,189,204 
   

 

 

 

Media – 1.8%

   

China South Publishing & Media Group Co., Ltd. – Class A

   1,175,200   1,697,859 

Chinese Universe Publishing and Media Group Co., Ltd.

   1,001,600   1,681,193 
   

 

 

 
    3,379,052 
   

 

 

 
    22,802,278 
   

 

 

 

Information Technology – 10.8%

   

Electronic Equipment, Instruments & Components – 5.6%

   

GoerTek, Inc. – Class A

   485,100   3,953,971 

Luxshare Precision Industry Co., Ltd. – Class A

   377,710   2,347,979 

Wuxi Lead Intelligent Equipment Co., Ltd. – Class A

   340,080   4,231,884 
   

 

 

 
    10,533,834 
   

 

 

 

IT Services – 2.1%

   

GDS Holdings Ltd.(a)

   299,240   2,112,939 

Vnet Group, Inc. (ADR)(a)

   191,200   1,858,464 
   

 

 

 
    3,971,403 
   

 

 

 

Semiconductors & Semiconductor Equipment – 2.1%

   

Flat Glass Group Co., Ltd.(c)

   209,200   912,338 

LONGi Green Energy Technology Co., Ltd. – Class A

   218,180   3,021,753 
   

 

 

 
    3,934,091 
   

 

 

 

Software – 1.0%

   

Shanghai Baosight Software Co., Ltd. – Class A

   169,430   1,764,187 
   

 

 

 
    20,203,515 
   

 

 

 

 

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AB ALL CHINA EQUITY PORTFOLIO    |    15


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company  Shares  U.S. $ Value 

 

 

Materials – 9.1%

   

Chemicals – 4.4%

   

LB Group Co., Ltd. – Class A

   356,300  $1,562,674 

Luxi Chemical Group Co., Ltd. – Class A

   597,900   1,452,519 

Shanghai Putailai New Energy Technology Co., Ltd. – Class A

   178,450   5,133,225 
   

 

 

 
    8,148,418 
   

 

 

 

Metals & Mining – 4.7%

   

Baoshan Iron & Steel Co., Ltd. – Class A

   2,244,379   2,281,364 

China Hongqiao Group Ltd.

   563,500   545,479 

Ganfeng Lithium Co., Ltd. – Class A

   56,100   1,492,669 

Shandong Nanshan Aluminum Co., Ltd. – Class A

   2,250,000   1,552,801 

Zijin Mining Group Co., Ltd. – Class A

   1,863,050   2,991,622 
   

 

 

 
    8,863,935 
   

 

 

 
    17,012,353 
   

 

 

 

Consumer Staples – 8.1%

   

Beverages – 5.5%

   

Anhui Yingjia Distillery Co., Ltd. – Class A

   373,200   3,955,360 

JiuGui Liquor Co., Ltd.

   37,200   1,310,190 

Kweichow Moutai Co., Ltd. – Class A

   7,963   2,415,109 

Shanxi Xinghuacun Fen Wine Factory Co., Ltd. – Class A

   52,620   2,580,816 
   

 

 

 
    10,261,475 
   

 

 

 

Food Products – 1.3%

   

Tongwei Co., Ltd. – Class A

   359,787   2,534,992 
   

 

 

 

Personal Products – 1.3%

   

L’Occitane International SA

   600,000   2,348,341 
   

 

 

 
    15,144,808 
   

 

 

 

Industrials – 7.3%

   

Electrical Equipment – 6.8%

   

Contemporary Amperex Technology Co., Ltd. – Class A

   64,149   6,847,580 

NARI Technology Co., Ltd. – Class A

   520,180   3,379,849 

TBEA Co., Ltd. – Class A

   683,166   2,456,107 
   

 

 

 
    12,683,536 
   

 

 

 

Road & Rail – 0.5%

   

Daqin Railway Co., Ltd. – Class A

   974,237   931,820 
   

 

 

 
    13,615,356 
   

 

 

 

Real Estate – 6.0%

   

Real Estate Management & Development – 6.0%

   

China Resources Land Ltd.

   628,000   2,623,607 

CIFI Holdings Group Co., Ltd.

   3,465,083   1,888,510 

Country Garden Services Holdings Co., Ltd.

   244,000   1,479,289 

KWG Living Group Holdings Ltd.(b)

   1,680,600   1,015,941 

 

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PORTFOLIO OF INVESTMENTS (continued)

 

Company  Shares  U.S. $ Value 

 

 

Longfor Group Holdings Ltd.(b)

   617,500  $2,931,129 

Midea Real Estate Holding Ltd.(b)(c)

   788,400   1,367,125 
   

 

 

 
    11,305,601 
   

 

 

 

Health Care – 5.3%

   

Health Care Equipment & Supplies – 0.9%

   

Shenzhen Mindray Bio-Medical Electronics Co., Ltd.

   28,600   1,617,363 
   

 

 

 

Health Care Providers & Services – 1.2%

   

Aier Eye Hospital Group Co., Ltd. – Class A

   120,250   808,865 

Shanghai Pharmaceuticals Holding Co., Ltd. – Class H

   813,700   1,483,636 
   

 

 

 
    2,292,501 
   

 

 

 

Life Sciences Tools & Services – 1.8%

   

WuXi AppTec Co., Ltd.

   80,400   1,819,608 

WuXi Biologics Cayman, Inc.(a)(b)

   122,000   1,645,755 
   

 

 

 
    3,465,363 
   

 

 

 

Pharmaceuticals – 1.4%

   

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. – Class A

   382,700   1,467,445 

Livzon Pharmaceutical Group, Inc. – Class A

   213,175   1,206,128 
   

 

 

 
    2,673,573 
   

 

 

 
    10,048,800 
   

 

 

 

Utilities – 2.9%

   

Gas Utilities – 0.9%

   

Kunlun Energy Co., Ltd.

   1,858,000   1,747,425 
   

 

 

 

Independent Power and Renewable Electricity Producers – 2.0%

   

China Longyuan Power Group Corp., Ltd. – Class H

   924,000   1,888,718 

China Yangtze Power Co., Ltd. – Class A(d)(e)

   600,200   1,841,134 
   

 

 

 
    3,729,852 
   

 

 

 
    5,477,277 
   

 

 

 

Energy – 1.7%

   

Energy Equipment & Services – 0.5%

   

China Oilfield Services Ltd. – Class H

   1,056,000   831,528 
   

 

 

 

Oil, Gas & Consumable Fuels – 1.2%

   

PetroChina Co., Ltd. – Class H

   5,342,000   2,313,132 
   

 

 

 
    3,144,660 
   

 

 

 

Total Common Stocks
(cost $172,299,853)

    184,719,381 
   

 

 

 

 

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AB ALL CHINA EQUITY PORTFOLIO    |    17


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company  Shares  U.S. $ Value 

 

 

RIGHTS – 0.0%

 

Real Estate – 0.0%

   

Real Estate Management & Development – 0.0%

   

CIFI Holdings Group Co. Ltd., expiring 12/31/2021(a)(d)(e)
(cost $0)

   173,254  $5,554 
   

 

 

 
   

SHORT-TERM INVESTMENTS – 1.3%

   

Investment Companies – 1.3%

   

AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.01%(f)(g)(h)
(cost $2,398,715)

   2,398,715   2,398,715 
   

 

 

 

Total Investments Before Security Lending Collateral for Securities Loaned – 99.9%
(cost $174,698,568)

    187,123,650 
   

 

 

 
   

INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED – 0.7%

   

Investment Companies – 0.7%

   

AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB,
0.01%(f)(g)(h)
(cost $1,205,410)

   1,205,410   1,205,410 
   

 

 

 

Total Investments – 100.6%
(cost $175,903,978)

    188,329,060 

Other assets less liabilities – (0.6)%

    (1,073,197
   

 

 

 

Net Assets – 100.0%

   $187,255,863 
   

 

 

 

 

(a)

Non-income producing security.

 

(b)

Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration. At November 30, 2021, the aggregate market value of these securities amounted to $11,279,981 or 6.0% of net assets.

 

(c)

Represents entire or partial securities out on loan. See Note E for securities lending information.

 

(d)

Security in which significant unobservable inputs (Level 3) were used in determining fair value.

 

(e)

Fair valued by the Adviser.

 

(f)

Affiliated investments.

 

(g)

To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

 

(h)

The rate shown represents the 7-day yield as of period end.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.

 

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STATEMENT OF ASSETS & LIABILITIES

November 30, 2021

 

Assets  

Investments in securities, at value

  

Unaffiliated issuers (cost $172,299,853)

  $184,724,935(a) 

Affiliated issuers (cost $3,604,125—including investment of cash collateral for securities loaned of $1,205,410)

   3,604,125 

Foreign currencies, at value (cost $149,221)

   149,456 

Receivable for capital stock sold

   327,438 

Receivable for investment securities sold

   77,437 

Unaffiliated dividends receivable

   6,559 
Affiliated dividends receivable   34 
  

 

 

 

Total assets

   188,889,984 
  

 

 

 
Liabilities  

Due to Custodian

   71 

Payable for collateral received on securities loaned

   1,205,410 

Advisory fee payable

   151,297 

Custody and accounting fees payable

   85,745 

Payable for capital stock redeemed

   64,732 

Administrative fee payable

   36,582 

Directors’ fee payable

   5,202 

Transfer Agent fee payable

   1,500 

Distribution fee payable

   455 

Accrued expenses and other liabilities

   83,127 
  

 

 

 

Total liabilities

   1,634,121 
  

 

 

 

Net Assets

  $187,255,863 
  

 

 

 
Composition of Net Assets  

Capital stock, at par

  $1,621 

Additional paid-in capital

   172,735,900 

Distributable earnings

   14,518,342 
  

 

 

 
  $    187,255,863 
  

 

 

 

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value

 

Class Net Assets     Shares
Outstanding
     Net Asset
Value
 

 

 
A $2,147,649      186,597     $11.51

 

 
Advisor $  185,108,214      16,018,625     $  11.56 

 

 

 

(a)

Includes securities on loan with a value of $1,871,230 (See Note E).

 

*

The maximum offering price per share for Class A shares was $12.02 which reflects a sales charge of 4.25%.

See notes to financial statements.

 

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AB ALL CHINA EQUITY PORTFOLIO    |    19


 

STATEMENT OF OPERATIONS

Year Ended November 30, 2021

 

Investment Income  

Dividends

  

Unaffiliated issuers (net of foreign taxes withheld of $247,903)

 $    4,237,277  

Affiliated issuers

  385  

Securities lending income

  17,162  $4,254,824 
 

 

 

  
Expenses  

Advisory fee (see Note B)

  1,789,266  

Transfer agency—Class A

  328  

Transfer agency—Advisor Class

  25,090  

Distribution fee—Class A

  6,110  

Custody and accounting

  150,097  

Administrative

  89,142  

Audit and tax

  60,198  

Registration fees

  47,806  

Legal

  36,915  

Directors’ fees

  20,967  

Printing

  18,738  

Miscellaneous

  17,185  
 

 

 

  

Total expenses

  2,261,842  

Less: expenses waived and reimbursed by the Adviser (see Note B and Note E)

  (1,839 
 

 

 

  

Net expenses

   2,260,003 
  

 

 

 

Net investment income

   1,994,821 
  

 

 

 
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions  

Net realized gain on:

  

Investment transactions

   492,970 

Foreign currency transactions

   4,756 

Net change in unrealized appreciation/depreciation on:

  

Investments

   (24,100,924

Foreign currency denominated assets and liabilities

   (1,173
  

 

 

 

Net loss on investment and foreign currency transactions

   (23,604,371
  

 

 

 

Net Decrease in Net Assets from Operations

  $    (21,609,550
  

 

 

 

See notes to financial statements.

 

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STATEMENT OF CHANGES IN NET ASSETS

 

   Year Ended
November 30,
2021
  Year Ended
November 30,
2020
 
Increase (Decrease) in Net Assets from Operations   

Net investment income

  $1,994,821  $782,424 

Net realized gain on investment and foreign currency transactions

   497,726   2,553,930 

Net change in unrealized appreciation/depreciation on investments and foreign currency denominated assets and liabilities

   (24,102,097  25,312,322 
  

 

 

  

 

 

 

Net increase (decrease) in net assets from operations

   (21,609,550  28,648,676 
Distributions to Shareholders   

Class A

   (5,466  (18,285

Advisor Class

   (645,142  (1,057,302
Capital Stock Transactions   

Net increase

   66,760,490   25,825,701 
  

 

 

  

 

 

 

Total increase

   44,500,332   53,398,790 
Net Assets   

Beginning of period

   142,755,531   89,356,741 
  

 

 

  

 

 

 

End of period

  $    187,255,863  $    142,755,531 
  

 

 

  

 

 

 

See notes to financial statements.

 

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AB ALL CHINA EQUITY PORTFOLIO    |    21


 

NOTES TO FINANCIAL STATEMENTS

November 30, 2021

 

NOTE A

Significant Accounting Policies

AB Cap Fund, Inc. (the “Company”) is registered under the Investment Company Act of 1940 as an open-end management investment company. The Company, which is a Maryland corporation, operates as a series company comprised of 12 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB All China Equity Portfolio (the “Fund”), a non-diversified portfolio. The Fund has authorized the issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1 and Class 2 shares. Class B, Class C, Class R, Class K, Class I, Class Z, Class T, Class 1 and Class 2 shares are not currently being offered. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Company’s Board of Directors (the “Board”).

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, AllianceBernstein L.P. (the “Adviser”) will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open-end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the 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,

 

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AB ALL CHINA EQUITY PORTFOLIO    |    23


 

NOTES TO FINANCIAL STATEMENTS (continued)

 

may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

  

Level 1—quoted prices in active markets for identical investments

  

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

  

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation.

 

24    |    AB ALL CHINA EQUITY PORTFOLIO

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NOTES TO FINANCIAL STATEMENTS (continued)

 

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of November 30, 2021:

 

Investments in

Securities

  Level 1  Level 2  Level 3  Total 

Assets:

     

Common Stocks:

     

Consumer Discretionary

  $2,761,945  $38,880,970  $– 0 –  $41,642,915 

Financials

   – 0 –   24,321,818   – 0 –   24,321,818 

Communication Services

   – 0 –   22,802,278   – 0 –   22,802,278 

Information Technology

   1,858,464   18,345,051   – 0 –   20,203,515 

Materials

   – 0 –   17,012,353   – 0 –   17,012,353 

Consumer Staples

   – 0 –   15,144,808   – 0 –   15,144,808 

Industrials

   – 0 –   13,615,356   – 0 –   13,615,356 

Real Estate

   1,888,510   9,417,091   – 0 –   11,305,601 

Health Care

   – 0 –   10,048,800   – 0 –   10,048,800 

Utilities

   – 0 –   3,636,143   1,841,134   5,477,277 

Energy

   – 0 –   3,144,660   – 0 –   3,144,660 

Rights

   – 0 –   – 0 –   5,554   5,554 

Short-Term Investments:

     

Investment Companies

   2,398,715   – 0 –   – 0 –   2,398,715 

Investments of Cash Collateral for Securities Loaned in Affiliated Money Market Fund

   1,205,410   – 0 –   – 0 –   1,205,410 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total Investments in Securities

   10,113,044    176,369,328   1,846,688   188,329,060 

Other Financial Instruments*

   – 0 –   – 0 –   – 0 –   – 0 – 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $    10,113,044  $    176,369,328  $    1,846,688  $    188,329,060 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

A significant portion of the Fund’s foreign equity investments are categorized as Level 2 investments since they are valued using fair value prices based on third party vendor modeling tools to the extent available, see Note A.1.

 

*

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/(depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, options written and swaptions written which are valued at market value.

3. Currency Translation

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

 

abfunds.com 

AB ALL CHINA EQUITY PORTFOLIO    |    25


 

NOTES TO FINANCIAL STATEMENTS (continued)

 

Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of foreign currency denominated assets and liabilities.

4. Taxes

It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned. The Fund’s investments in Chinese securities may be subject to a 10% Chinese Withholding Income Tax (“WIT”) on any dividends, interest or other income from Chinese sources, unless the statutory WIT of 10% is subject to reduction or exemption in accordance with the applicable tax treaty signed with China or domestic regulation.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income. The Fund accounts for distributions received from REIT investments or from regulated investment companies as dividend income, realized gain, or return of capital based on information provided by the REIT or the investment company.

 

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6. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.

7. Dividends and Distributions

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .95% of Fund’s average daily net assets. The fee is accrued daily and paid monthly. The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs), on an annual basis (the “Expense Caps”) to 1.50% and 1.25% of the daily average net assets for Class A and Advisor Class, respectively. For the year ended November 30, 2021, there was no such reimbursement. The Expense Caps may not be terminated by the Adviser before February 28, 2022. Any fees waived and expenses borne by the Adviser through July 25, 2019 are subject to repayment by the Fund until the end of the third fiscal year after the fiscal period in which the fee was waived or the expense was borne; such waivers that are subject to repayment amount to $218,709 for the period ended November 30, 2018 and $202,645 for the year ended November 30, 2019. In any case, no repayment will be made that would cause the Fund’s total annual operating expenses to exceed the Expense Caps’ net fee percentages set forth above.

Pursuant to the investment advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended November 30, 2021, the reimbursement for such services amounted to $89,142.

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $18,000 for the year ended November 30, 2021.

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has retained no front-end sales charges from the sale of Class A shares and received no contingent deferred sales charges imposed upon redemptions by shareholders of Class A for the year ended November 30, 2021.

The Fund may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2022. In connection with the investment by the Fund in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Fund in an amount equal to the Fund’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. For the year ended November 30, 2021, such waiver amounted to $1,798.

A summary of the Fund’s transactions in AB mutual funds for the year ended November 30, 2021 is as follows:

 

Fund

 Market Value
11/30/20
(000)
  Purchases
at Cost
(000)
  Sales
Proceeds
(000)
  Market Value
11/30/21
(000)
  Dividend
Income
(000)
 

Government Money Market Portfolio

 $    4,210  $    62,423  $    64,234  $    2,399  $    0

Government Money Market Portfolio**

  3,221   8,597   10,613   1,205   0
    

 

 

  

 

 

 

Total

    $3,604  $  1 
    

 

 

  

 

 

 

 

*

Amount is less than $500.

 

**

Investment of cash collateral for securities lending transactions (see Note E).

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .25% of the Fund’s average daily net assets attributable to Class A shares. There are no distribution and servicing fees on the Advisor Class. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund’s shares.

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended November 30, 2021, were as follows:

 

   Purchases  Sales 

Investment securities (excluding U.S. government securities)

  $    203,047,142  $    136,433,730 

U.S. government securities

   – 0 –   – 0 – 

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows:

 

Cost

  $    177,061,239 
  

 

 

 

Gross unrealized appreciation

  $30,425,832 

Gross unrealized depreciation

   (19,158,011
  

 

 

 

Net unrealized appreciation

  $11,267,821 
  

 

 

 

1. Derivative Financial Instruments

The Fund may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, “investment purposes”), or to hedge or adjust the risk profile of its portfolio.

The Fund did not engage in derivative transactions for the year ended November 30, 2021.

2. Currency Transactions

The Fund may invest in non-U.S. Dollar-denominated securities on a currency hedged or unhedged basis. The Fund may seek investment

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

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 other options. The Fund 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 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).

NOTE E

Securities Lending

The Fund may enter into securities lending transactions. Under the Fund’s securities lending program, all loans of securities will be collateralized continually by cash collateral and/or non-cash collateral. Non-cash collateral will include only securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. The Fund cannot sell or repledge any non-cash collateral, such collateral will not be reflected in the portfolio of investments. If a loan is collateralized by cash, the Fund will be compensated for the loan from a portion of the net return from the income earned on cash collateral after a rebate is paid to the borrower (in some cases, this rebate may be a “negative rebate” or fee paid by the borrower to the Fund in connection with the loan), and payments are made for fees of the securities lending agent and for certain other administrative expenses. If the Fund receives non-cash collateral, the Fund will receive a fee from the borrower generally equal to a negotiated percentage of the market value of the loaned securities. The Fund will have the right to call a loan and obtain the securities loaned at any time on notice to the borrower within the normal and customary settlement time for the securities. While the securities are on loan, the borrower is obligated to pay the Fund amounts equal to any dividend income or other distributions from the securities; however, these distributions will not be afforded the same preferential tax treatment as qualified dividends. The Fund will not be able to exercise voting rights with respect to any securities during the existence of a loan, but will have the right to regain ownership of loaned securities in order to exercise voting or other ownership rights. Collateral received and securities loaned are marked to market daily to ensure that the securities loaned are secured by collateral. The lending agent currently invests the cash collateral received in Government Money Market Portfolio, an eligible money market vehicle, in accordance with the investment restrictions of the Fund, and as approved by the Board. The collateral received on securities loaned is recorded as an asset as well as a corresponding liability in the statement

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

of assets and liabilities. The collateral will be adjusted the next business day to maintain the required collateral amount. The amounts of securities lending income from the borrowers and Government Money Market Portfolio are reflected in the statement of operations. When the Fund earns net securities lending income from Government Money Market Portfolio, the income is inclusive of a rebate expense paid to the borrower. In connection with the cash collateral investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive a portion of the Fund’s share of the advisory fees of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. A principal risk of lending portfolio securities is that the borrower may fail to return the loaned securities upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for the year ended November 30, 2021 is as follows:

 

           Government Money
Market Portfolio
 

Market Value
of Securities
on Loan*

 Cash
Collateral*
  Market Value
of Non-Cash
Collateral*
  Income from
Borrowers
  Income
Earned
  Advisory
Fee Waived
 
$    1,871,230 $    1,205,410  $    752,923  $    17,031  $    131  $    41 

 

*

As of November 30, 2021.

NOTE F

Capital Stock

Each class consists of 1,000,000,000 authorized shares. Transactions in capital shares for each class were as follows:

 

       
   Shares     Amount    
   

Year Ended
November 30,

2021

  

Year Ended
November 30,

2020

     

Year Ended
November 30,

2021

  

Year Ended
November 30,

2020

    
  

 

 

  
Class A       

Shares sold

   – 0 –   548   $– 0 –  $5,843  

 

  

Shares issued in reinvestment of dividends

   422   1,178    5,436   12,351  

 

  

Shares redeemed

   (1,000  – 0 –    (11,580  – 0 –  

 

  

Net increase (decrease)

   (578  1,726   $(6,144 $18,194  

 

  

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

        
   Shares     Amount    
   

Year Ended
November 30,

2021

   

Year Ended
November 30,

2020

     

Year Ended
November 30,

2021

  

Year Ended
November 30,

2020

    
  

 

 

  
Advisor Class        

Shares sold

   6,772,322    3,880,486   $90,351,067  $41,651,892  

 

  

Shares issued in reinvestment of dividends

   47,134    97,231    608,031   1,019,954  

 

  

Shares redeemed

   (1,921,441   (1,559,422   (24,192,464  (16,864,339 

 

  

Net increase

   4,898,015    2,418,295   $66,766,634  $25,807,507  

 

  

NOTE G

Risks Involved in Investing in the Fund

Market Risk—The value of the Fund’s assets will fluctuate as the stock market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events, including public health crises (including the occurrence of a contagious disease or illness), that affect large portions of the market. It includes the risk that a particular style of investing, such as the Fund’s value approach, may underperform the market generally.

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 more difficult to trade due to adverse market, economic, political, regulatory or other factors. Investments in emerging market countries such as China may involve more risk than investments in developed countries because the markets in emerging market countries are less developed and less liquid and are subject to increased economic, political, regulatory, or other uncertainties. In addition, the value of the Fund’s investments may decline because of factors such as unfavorable or unsuccessful government actions and reduction in government or central bank support.

China/Single Country Risk—Investments in issuers located in a particular country or geographic region may have more risk because of particular market factors affecting that country or region, including political instability, geopolitical risks or unpredictable economic conditions. Risks of investments in securities of companies in China include the volatility of the Chinese stock market, heavy dependence on exports, which may be affected adversely by trade barriers or disputes or may decrease, sometimes significantly, when the world economy weakens, and the continuing importance of the role of the Chinese Government, which may take actions that affect economic and market practices. While the Chinese economy has grown at a rapid rate in recent years, the rate of growth has been declining, and there can be no assurance that China’s economy will

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

continue to grow in the future. Investments in China A shares are subject to quotas that may restrict daily trading and to additional risks that could affect liquidity compared to investments in companies in developed markets. Risks of investments in companies based in Hong Kong include heavy reliance on the U.S. economy and regional economies, particularly the Chinese economy, which makes these investments vulnerable to changes in these economies.

Currency Risk—Fluctuations in currency exchange rates may negatively affect the value of the Fund’s investments in equity securities denominated in foreign currencies or reduce the Fund’s returns. Emerging market currencies may be more volatile and less liquid, and subject to significantly greater risk of currency controls and convertibility restrictions, than currencies of developed countries.

Depositary Receipts Risk—Investing in depositary receipts involves risks that are similar to the risks of direct investments in foreign securities. For example, investing in depositary receipts may involve risks relating to political, economic or regulatory conditions in foreign countries. In addition, the issuers of the securities underlying certain depositary receipts are under no obligation to distribute shareholder communications or pass through any voting rights with respect to the deposited securities to the holders of such receipts.

Illiquid Investments Risk—Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Foreign fixed-income securities may have more illiquid investments risk because secondary trading markets for these securities may be smaller and less well-developed and the securities may trade less frequently. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally go down.

Non-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. Accordingly, changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value, or NAV.

Industry/Sector Risk—Investments in a particular industry or group of related industries may have more risk because market or economic factors affecting that industry could have a significant effect on the value of the Fund’s investments.

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

LIBOR Transition and Associated Risk—A Fund may be exposed to debt securities, derivatives or other financial instruments that are tied to the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. In 2017, the United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. The FCA and LIBOR’s administrator, ICE Benchmark Administration, have since announced that most LIBOR settings (which reflect LIBOR rates quoted in different currencies over various time periods) will no longer be published after the end of 2021 but that the most widely used U.S. dollar LIBOR settings will continue to be published until June 30, 2023. However, banks were strongly encouraged to cease entering into agreements with counterparties referencing LIBOR by the end of 2021. It is possible that a subset of LIBOR settings will be published after these dates on a “synthetic” basis, but any such publications would be considered non-representative of the underlying market. The U.S. Federal Reserve, based on the recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market participants and their regulators), has begun publishing a Secured Overnight Funding Rate (referred to as SOFR), which is intended to replace U.S. dollar LIBOR. Proposals for alternative reference rates for other currencies have also been announced or have already begun publication. Markets are slowly developing in response to these new rates.

The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect a Fund’s performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, potentially adversely affecting a Fund’s performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. The potential effects of a phase out of LIBOR on LIBOR-based investments are currently unknown.

Indemnification Risk—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. Therefore, the Fund has not accrued any liability in connection with these indemnification provisions.

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. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected.

NOTE H

Joint Credit Facility

A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $325 million revolving credit facility (the “Facility”) intended to provide short-term financing related to redemptions and other short term liquidity requirements, subject to certain restrictions. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the year ended November 30, 2021.

NOTE I

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended November 30, 2021 and November 30, 2020 were as follows:

 

   2021   2020 

Distributions paid from:

    

Ordinary income

  $    650,608   $    1,075,587 
  

 

 

   

 

 

 

Total taxable distributions paid

  $650,608   $1,075,587 
  

 

 

   

 

 

 

As of November 30, 2021, the components of accumulated earnings/(deficit) on a tax basis were as follows:

 

Undistributed ordinary income

  $    2,018,868 

Undistributed capital gains

   1,231,439(a) 

Unrealized appreciation/(depreciation)

   11,268,035(b) 
  

 

 

 

Total accumulated earnings/(deficit)

  $14,518,342 
  

 

 

 

 

(a)

During the fiscal year, the Fund utilized $121,699 of capital loss carry forwards to offset current year net realized gains.

 

(b)

The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the tax treatment of passive foreign investment companies (PFICs) and the tax deferral of losses on wash sales.

 

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NOTES TO FINANCIAL STATEMENTS (continued)

 

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of November 30, 2021, the Fund did not have any capital loss carryforwards.

During the current fiscal year, there were no permanent differences that resulted in adjustments to distributable earnings or additional paid-in capital.

NOTE J

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional guidance to ease the potential accounting burden due to the discontinuation of the LIBOR and other interbank-offered based reference rates. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying ASU 2020-04.

NOTE K

Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.

 

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FINANCIAL HIGHLIGHTS

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

 

  Class A 
  Year Ended November 30,  

July 25,

2018(a) to
November 30,
2018

 
 2021  2020  2019 
 

 

 

 

Net asset value, beginning of period

  $  12.58   $  10.02   $  8.37   $  10.00 
 

 

 

 

Income From Investment Operations

    

Net investment income (loss)(b)(c)

  .09   .04   .10   (.01

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.13  2.62   1.55   (1.62
 

 

 

 

Net increase (decrease) in net asset value from operations

  (1.04  2.66   1.65   (1.63
 

 

 

 

Less: Dividends

    

Dividends from net investment income

  (.03  (.10  – 0 –   – 0 – 
 

 

 

 

Net asset value, end of period

  $  11.51   $  12.58   $  10.02   $  8.37 
 

 

 

 

Total Return

    

Total investment return based on net asset value(d)

  (8.30)%   26.73 %   19.71 %   (16.30)% 

Ratios/Supplemental Data

    

Net assets, end of period (000’s omitted)

  $2,148   $2,355   $1,859   $685 

Ratio to average net assets of:

    

Expenses, net of waivers/reimbursements

  1.44 %   1.50 %   1.50 %   1.50 %(e) 

Expenses, before waivers/reimbursements

  1.45 %   1.56 %   1.93 %   4.81 %(e) 

Net investment income (loss)(c)

  .70 %   .40 %   1.00 %   (.33)%(e) 

Portfolio turnover rate

  75 %   74 %   62 %   38 % 

See footnote summary on page 38.

 

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FINANCIAL HIGHLIGHTS (continued)

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

 

  Advisor Class 
  Year Ended November 30,  

July 25,

2018(a) to
November 30,
2018

 
 2021  2020  2019 
 

 

 

 

Net asset value, beginning of period

  $  12.63   $  10.05   $  8.38   $  10.00 
 

 

 

 

Income From Investment Operations

    

Net investment income (loss)(b)(c)

  .14   .08   .12   (.01

Net realized and unrealized gain (loss) on investment and foreign currency transactions

  (1.15  2.62   1.55   (1.61
 

 

 

 

Net increase (decrease) in net asset value from operations

  (1.01  2.70   1.67   (1.62
 

 

 

 

Less: Dividends

    

Dividends from net investment income

  (.06  (.12  – 0 –   – 0 – 
 

 

 

 

Net asset value, end of period

  $  11.56   $  12.63   $  10.05   $  8.38 
 

 

 

 

Total Return

    

Total investment return based on net asset value(d)

  (8.07)%   27.12 %   19.93 %   (16.20)% 

Ratios/Supplemental Data

    

Net assets, end of period (000’s omitted)

  $185,108   $140,401   $87,498   $36,145 

Ratio to average net assets of:

    

Expenses, net of waivers/reimbursements

  1.20 %   1.25 %   1.25 %   1.25 %(e) 

Expenses, before waivers/reimbursements

  1.20 %   1.31 %   1.67 %   5.13 %(e) 

Net investment income (loss)(c)

  1.06 %   .69 %   1.28 %   (.37)%(e) 

Portfolio turnover rate

  75 %   74 %   62 %   38 % 

 

(a)

Commencement of operations.

 

(b)

Based on average shares outstanding.

 

(c)

Net of expenses waived/reimbursed by the Adviser.

 

(d)

Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charge or contingent deferred sales charge 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 return for a period of less than one year is not annualized.

 

(e)

Annualized.    

See notes to financial statements.

 

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

 

To the Shareholders and the Board of Directors of

AB All China Equity Portfolio

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB All China Equity Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of November 30, 2021, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended and the period from July 25, 2018 (commencement of operations) through November 30, 2018 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting AB Cap Fund, Inc.) at November 30, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the three years in the period then ended and the period from July 25, 2018 (commencement of operations) through November 30, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

January 26, 2022

 

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2021 FEDERAL TAX INFORMATION

(unaudited)

 

For Federal income tax purposes, the following information is furnished with respect to the earnings of the Fund for the taxable year ended November 30, 2021.

For the taxable year ended November 30, 2021, the Fund designates 100% as the maximum amount that may be considered qualified dividend income for individual shareholders.

The Fund intends to make an election to pass through foreign taxes to its shareholders. For the taxable year ended November 30, 2021, $247,903 of foreign taxes may be passed through and the associated foreign source income for information reporting purposes is $4,491,908.

Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2022.

 

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BOARD OF DIRECTORS

 

Marshall C. Turner, Jr.(1),

Chairman

Jorge A. Bermudez(1)

Michael J. Downey(1)

Onur Erzan, President and Chief Executive Officer

  

Nancy P. Jacklin(1)

Jeanette W. Loeb(1)

Carol C. McMullen(1)

Garry L. Moody(1)

OFFICERS

John Lin(2), Vice President

Stuart Rae(2), Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

  

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Vincent S. Noto, Chief Compliance Officer

Phyllis J. Clarke, Controller

 

Custodian and Accounting Agent

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

 

Principal Underwriter

AllianceBernstein Investments, Inc.

501 Commerce Street

Nashville, TN 37203

 

Legal Counsel

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

  

Independent Registered Public Accounting Firm

Ernst & Young LLP

One Manhattan West

New York, NY 10001

 

Transfer Agent

AllianceBernstein Investor

Services, Inc.

P.O. Box 786003

San Antonio, TX 78278

Toll-Free (800) 221-5672

 

1

Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee.

 

2

The day-to-day management of, and investment decisions for, the Fund’s portfolio are made by the Adviser’s China Equity Team. Messrs. Lin and Rae are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

 

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MANAGEMENT OF THE FUND

 

Board of Directors Information

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

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

INTERESTED DIRECTOR   

Onur Erzan,+

1345 Avenue of the Americas

New York, NY 10105

46

(2021)

 Senior Vice President of AllianceBernstein L.P. (the “Adviser”) and Head of the Global Client Group overseeing AB’s institutional and retail businesses, where he is responsible for all client services, sales and marketing, as well as product strategy, management and development worldwide. Director, President and Chief Executive Officer of the AB Mutual Funds as of April 1, 2021. Prior to joining the firm in January 2021, he spent 20 years with McKinsey (management consulting firm), most recently as a senior partner and co-leader of its Wealth & Asset Management practice. In addition, he co-led McKinsey’s Banking & Securities Solutions (a portfolio of data, analytics, and digital assets and capabilities) globally.  74  None
   

 

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MANAGEMENT OF THE FUND (continued)

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

DISINTERESTED DIRECTORS  

Marshall C. Turner, Jr.,#

Chairman of the Board

80

(2018)

 Private Investor since prior to 2017. Former Chairman and CEO of Dupont Photomasks, Inc. (components of semiconductor manufacturing). He was a Director of Xilinx, Inc. (programmable logic semi-conductors and adaptable, intelligent computing) from 2007 through August 2020, and is a former director of 33 other companies and organizations. He has extensive operating leadership, experience and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the boards of two education and science-related non-profit organizations. He has served as a director of one AB Fund since 1992, and director or trustee of all AB Funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since
February 2014.
  74  None
   

 

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MANAGEMENT OF THE FUND (continued)

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

DISINTERESTED DIRECTORS

(continued)

  

Jorge A. Bermudez,#

70

(2020)

 Private Investor since prior to 2017. Formerly, Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since January 2020.  74  Moody’s Corporation since April 2011
   

Michael J. Downey,#

78

(2018)

 Private Investor since prior to 2017. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2017 until January 2019. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities Inc. He has served as a director or trustee of the AB Funds since 2005.  74  None
   

 

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MANAGEMENT OF THE FUND (continued)

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

DISINTERESTED DIRECTORS

(continued)

  

Nancy P. Jacklin,#

73

(2018)

 Private Investor since prior to 2017. Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system) (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and has been Chair of the Governance and Nominating Committees of the AB Funds since August 2014.  74  None
   

Jeanette W. Loeb,#

69

(2020)

 Chief Executive Officer of PetCareRx (e-commerce pet pharmacy) from 2002 to 2011 and 2015 to present. Director of New York City Center since 2005. She was a director of AB Multi-Manager Alternative Fund, Inc. (fund of hedge funds) from 2012 to 2018. Formerly, affiliated with Goldman Sachs Group, Inc. (financial services) from 1977 to 1994, including as a partner thereof from 1986 to 1994. She has served as director or trustee of the AB Funds since April 2020.  74  Apollo Investment Corp. (business development company) since August 2011

 

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MANAGEMENT OF THE FUND (continued)

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

DISINTERESTED DIRECTORS

(continued)

  

Carol C. McMullen,#

66

(2018)

 Managing Director of Slalom Consulting (consulting) since 2014, private investor and a member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.  74  None

 

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MANAGEMENT OF THE FUND (continued)

 

NAME,

ADDRESS* AND AGE

(YEAR FIRST ELECTED**)

 

PRINCIPAL

OCCUPATION(S)

DURING PAST FIVE YEARS

AND OTHER

INFORMATION***

 

PORTFOLIOS

IN AB FUND

COMPLEX

OVERSEEN BY

DIRECTOR

  

OTHER

PUBLIC COMPANY

DIRECTORSHIPS

CURRENTLY

HELD BY

DIRECTOR

DISINTERESTED DIRECTORS

(continued)

  

Garry L. Moody,#

69

(2018)

 Private Investor since prior to 2017. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for accounting, pricing, custody and reporting for the Fidelity mutual funds; and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He is a member of the Trustee Advisory Board of BoardIQ, a biweekly publication focused on issues and news affecting directors of mutual funds. He is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council’s Governing Council. He has served as a director or trustee, and as Chairman of the Audit Committees, of the AB Funds since 2008.  74  None
   

 

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MANAGEMENT OF THE FUND (continued)

 

*

The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department—Mutual Fund Legal, 1345 Avenue of the Americas, New York, NY 10105.

 

**

There is no stated term of office for the Fund’s Directors.

 

***

The information above includes each Director’s principal occupation during the last five years and other information relating to the experience, attributes and skills relevant to each Director’s qualifications to serve as a Director, which led to the conclusion that each Director should serve as a Director for the Fund.

 

+

Mr. Erzan is an “interested person” of the Fund, as defined in the “1940 Act”, due to his position as a Senior Vice President of the Adviser.

 

#

Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee.

 

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MANAGEMENT OF THE FUND (continued)

 

Officer Information

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

 

NAME, ADDRESS,*

AND AGE

  

POSITION(S)

HELD WITH FUND

  

PRINCIPAL OCCUPATION

DURING PAST 5 YEARS

Onur Erzan

46

  

President and Chief

Executive Officer

  See biography above.
    

John Lin

44

  Vice President  Senior Vice President of the Adviser**, with which he has been associated since prior to 2017. He is also a Senior Research Analyst for China Value Research.
    

Stuart Rae

56

  Vice President  Senior Vice President of the Adviser**, with which he has been associated since prior to 2017. He is also Chief Investment Officer of the Asia-Pacific Value Equities.
    

Emilie D. Wrapp

66

  Secretary  Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2017.
    

Michael B. Reyes

45

  Senior Analyst  Vice President of the Adviser**, with which he has been associated since prior to 2017.
    

Joseph J. Mantineo

62

  

Treasurer and Chief

Financial Officer

  Senior Vice President of AllianceBernstein Investor Services, Inc. (“ABIS**”), with which he has been associated since prior to 2017.
    

Phyllis J. Clarke

61

  Controller  Vice President of ABIS**, with which she has been associated since prior to 2017.
    

Vincent S. Noto

57

  

Chief Compliance

Officer

  Senior Vice President and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2017.

 

*

The address for each of the Fund’s Officers is 1345 Avenue of the Americas, New York, NY 10105.

 

**

The Adviser, ABI and ABIS are affiliates of the Fund.

The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Directors and Officers and is available without charge upon request. Contact your financial representative or AB at (800) 227-4618, or visit www.abfunds.com, for a free prospectus or SAI.

 

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Operation and Effectiveness of the Fund’s Liquidity Risk Management Program:

In October 2016, the Securities and Exchange Commission (“SEC”) adopted the open-end fund liquidity rule (the “Liquidity Rule”). In June 2018 the SEC adopted a requirement that funds disclose information about the operation and effectiveness of their Liquidity Risk Management Program (“LRMP”) in their reports to shareholders.

One of the requirements of the Liquidity Rule is for the Fund to designate an Administrator of the Fund’s Liquidity Risk Management Program. The Administrator of the Fund’s LRMP is AllianceBernstein L.P., the Fund’s investment adviser (the “Adviser”). The Adviser has delegated the responsibility to its Liquidity Risk Management Committee (the “Committee”).

Another requirement of the Liquidity Rule is for the Fund’s Board of Directors (the “Fund Board”) to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the fund’s LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2021, which covered the period January 1, 2020 through December 31, 2020 (the “Program Reporting Period”).

The LRMP’s principal objectives include supporting the Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that the Fund will be unable to meet its redemption obligations in a timely manner.

Pursuant to the LRMP, the Fund classifies the liquidity of its portfolio investments into one of the four categories defined by the SEC: Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid. These classifications are reported to the SEC on Form N-PORT.

During the Program Reporting Period, the Committee reviewed whether the Fund’s strategy is appropriate for an open-end structure, incorporating any holdings of less liquid and illiquid assets. If the Fund participated in derivative transactions, the exposure from such transactions were considered in the LRMP.

The Committee also performed an analysis to determine whether the Fund is required to maintain a Highly Liquid Investment Minimum (“HLIM”). The Committee also incorporated the following information when determining the Fund’s reasonably anticipated trading size for purposes of liquidity monitoring: historical net redemption activity, a Fund’s concentration in an issuer, shareholder concentration, investment performance, total net assets, and distribution channels.

The Adviser informed the Fund Board that the Committee believes the Fund’s LRMP is adequately designed, has been implemented as intended, and has operated effectively since its inception. No material exceptions

 

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have been noted since the implementation of the LRMP. During the Program Reporting Period, beginning in March 2020, all financial markets experienced extreme levels of price volatility and relative illiquidity resulting from the COVID-19 impacts on the global economy. This extreme relative illiquidity resulted in significantly wider bid-ask spreads to transact in securities, including many of those securities held by the Fund, and in a diminished depth of liquidity in most markets, to varying degrees. Nonetheless, there were no liquidity events that impacted the Fund or its ability to timely meet redemptions during the Program Reporting Period.

 

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Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested directors (the “directors”) of AB Cap Fund, Inc. (the “Company”) unanimously approved the continuance of the Company’s Advisory Agreement with the Adviser in respect of AB All China Equity Portfolio (the “Fund”) at a meeting held by video conference on May 3-5, 2021 (the “Meeting”).

Prior to approval of the continuance of the Advisory Agreement, the directors had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed continuance of the Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The directors also reviewed additional materials, including comparative analytical data prepared by the Senior Analyst for the Fund. The directors also discussed the proposed continuance in private sessions with counsel.

The directors considered their knowledge of the nature and quality of the services provided by the Adviser to the Fund gained from their experience as directors or trustees of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AB Funds. The directors noted that they have four regular meetings each year, at each of which they review extensive materials and information from the Adviser, including information on the investment performance of the Fund and the money market fund advised by the Adviser in which the Fund invests a portion of its assets.

The directors also considered all factors they believed relevant, including the specific matters discussed below. During the course of their deliberations, the directors evaluated, among other things, the reasonableness of the advisory fee. The directors did not identify any particular information that was all-important or controlling, and different directors may have attributed different weights to the various factors. The directors determined that the selection of the Adviser to manage the Fund and the overall arrangements between the Fund and the Adviser, as provided in the Advisory Agreement, including the advisory fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their business judgment. The material factors and conclusions that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services Provided

The directors considered the scope and quality of services provided by the Adviser under the Advisory Agreement, including the quality of the

 

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investment research capabilities of the Adviser and the other resources it has dedicated to performing services for the Fund. The directors noted that the Adviser from time to time reviews the Fund’s investment strategies and from time to time proposes changes intended to improve the Fund’s relative or absolute performance for the directors’ consideration. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Adviser. The directors also considered that the Advisory Agreement provides that the Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services to the Fund by employees of the Adviser or its affiliates. Requests for these reimbursements are made on a quarterly basis and subject to approval by the directors. Reimbursements, to the extent requested and paid, result in a higher rate of total compensation from the Fund to the Adviser than the fee rate stated in the Advisory Agreement. The directors noted that the methodology used to determine the reimbursement amounts had been reviewed by an independent consultant at the request of the directors. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of the Fund’s other service providers, also was considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided to the Fund under the Advisory Agreement.

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues and expenses and related notes indicating the profitability of the Fund to the Adviser for calendar years 2019 and 2020 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant at the request of the directors. The directors noted the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and understood that there are a number of potentially acceptable allocation methodologies for information of this type. The directors noted that the profitability information reflected all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to its subsidiaries that provide transfer agency, distribution and brokerage services to the Fund. The directors recognized that it is difficult to make comparisons of the profitability of the Advisory Agreement with the profitability of fund advisory contracts for unaffiliated funds because comparative information is not generally publicly available and is affected by numerous factors. The directors focused on the profitability of the Adviser’s relationship with the Fund before taxes and distribution expenses. The directors noted that the Fund was not profitable to the Adviser in 2019 and concluded that the Adviser’s level of profitability from its relationship with the Fund in 2020 was not unreasonable.

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their relationships with the Fund and the money market fund advised

 

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by the Adviser in which the Fund invests, including, but not limited to, benefits relating to soft dollar arrangements (whereby investment advisers receive brokerage and research services from brokers that execute agency transactions for their clients); 12b-1 fees and sales charges received by the Fund’s principal underwriter (which is a wholly owned subsidiary of the Adviser) in respect of certain classes of the Fund’s shares; brokerage commissions paid by the Fund to brokers affiliated with the Adviser; and transfer agency fees paid by the Fund to a wholly owned subsidiary of the Adviser. The directors recognized that the Fund’s recent profitability to the Adviser would be somewhat lower without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

In addition to the information reviewed by the directors in connection with the Meeting, the directors receive detailed performance information for the Fund at each regular Board meeting during the year.

At the Meeting, the directors reviewed performance information prepared by an independent service provider (the “15(c) service provider”), showing the performance of the Class A Shares of the Fund against a group of similar funds (“peer group”) and a larger group of similar funds (“peer universe”), each selected by the 15(c) service provider, and information prepared by the Adviser showing performance of the Class A Shares against a broad-based securities market index, in each case for the 1-year period ended February 28, 2021 and (in the case of comparisons with the broad-based securities market index) for the period from inception. Based on their review, the directors concluded that the Fund’s investment performance was acceptable.

Advisory Fees and Other Expenses

The directors considered the advisory fee rate payable by the Fund to the Adviser and information prepared by the 15(c) service provider concerning advisory fee rates payable by other funds in the same category as the Fund. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees paid by other funds. The directors compared the Fund’s contractual advisory fee rate with a peer group median and took into account the impact on the advisory fee rate of the administrative expense reimbursement paid to the Adviser in the latest fiscal year.

The directors also considered the Adviser’s fee schedule for other clients utilizing investment strategies similar to those of the Fund. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule and the schedule of fees

 

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charged by the Adviser to any offshore funds and for services to any sub-advised funds utilizing investment strategies similar to those of the Fund, on the other. The directors noted that the Adviser may, in some cases, agree to fee rates with large institutional clients that are lower than those reviewed by the directors and that they had previously discussed with the Adviser its policies in respect of such arrangements.

The Adviser reviewed with the directors the significantly greater scope of the services it provides to the Fund relative to institutional, offshore fund and sub-advised fund clients. In this regard, the Adviser noted, among other things, that, compared to institutional and offshore or sub-advisory accounts, the Fund (i) demands considerably more portfolio management, research and trading resources due to significantly higher daily cash flows; (ii) has more tax and regulatory restrictions and compliance obligations; (iii) must prepare and file or distribute regulatory and other communications about fund operations; and (iv) must provide shareholder servicing to retail investors. The Adviser also reviewed the greater legal risks presented by the large and changing population of Fund shareholders who may assert claims against the Adviser in individual or class actions, and the greater entrepreneurial risk in offering new fund products, which require substantial investment to launch, may not succeed, and generally must be priced to compete with larger, more established funds resulting in lack of profitability to the Adviser until a new fund achieves scale. In light of the substantial differences in services rendered by the Adviser to institutional, offshore fund and sub-advised fund clients as compared to the Fund, and the different risk profile, the directors considered these fee comparisons inapt and did not place significant weight on them in their deliberations.

The directors noted that the Fund may invest in shares of exchange-traded funds (“ETFs”), subject to the restrictions and limitations of the Investment Company Act of 1940 as these may be varied as a result of exemptive orders issued, and rules adopted, by the SEC. The directors also noted that ETFs pay advisory fees pursuant to their advisory contracts. The directors concluded, based on the Adviser’s explanation of how it uses ETFs when they are the most cost-effective way to obtain desired exposures, in some cases pending purchases of underlying securities, that the advisory fee for the Fund would be for services in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.

In connection with their review of the Fund’s advisory fee, the directors also considered the total expense ratio of the Class A shares of the Fund in comparison to a peer group and a peer universe selected by the 15(c) service provider. The Class A expense ratio of the Fund was based on the Fund’s latest fiscal year and the directors considered the Adviser’s expense cap for the Fund. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s category were

 

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lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Fund by others. Based on their review, the directors concluded that the Fund’s expense ratio was acceptable.

Economies of Scale

The directors noted that the advisory fee schedule for the Fund does not contain breakpoints and that they had discussed their strong preference for breakpoints in advisory contracts with the Adviser. The directors took into consideration prior presentations by an independent consultant on economies of scale in the mutual fund industry and for the AB Funds, and presentations from time to time by the Adviser concerning certain of its views on economies of scale. The directors also had requested and received from the Adviser certain updates on economies of scale in advance of the Meeting. The directors believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The directors noted that there is no established methodology for setting breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many funds do not have breakpoints at all. The directors informed the Adviser that they would monitor the Fund’s asset level (which was well below the level at which they would anticipate adding an initial breakpoint) and its profitability (currently unprofitable) to the Adviser and anticipated revisiting the question of breakpoints in the future if circumstances warranted doing so.

 

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This page is not part of the Shareholder Report or the Financial Statements.

 

 

AB FAMILY OF FUNDS

 

US EQUITY

CORE

Core Opportunities Fund

Select US Equity Portfolio

Sustainable US Thematic Portfolio1

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

Global Core Equity Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

Sustainable International Thematic Fund

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

Global Bond Fund

High Income Fund

High Yield Portfolio1

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Sustainable Thematic Credit Portfolio

Total Return Bond Portfolio

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Sustainable Thematic Balanced Portfolio1

Tax-Managed All Market Income Portfolio

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

 

We also offer Government Money Market Portfolio, which serves as the money market fund exchange vehicle for the AB mutual funds. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

 

1

Prior to August 23, 2021, Sustainable US Thematic Portfolio was named FlexFee US Thematic Portfolio. Prior to April 30, 2021, High Yield Portfolio was named FlexFee High Yield Portfolio. Prior to December 1, 2021, Sustainable Thematic Balanced Portfolio was named Conservative Wealth Strategy.

 

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NOTES

 

 

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NOTES

 

 

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LOGO

AB ALL CHINA EQUITY PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

 

 

ACE-0151-1121            LOGO


NOV    11.30.21

LOGO

ANNUAL REPORT

AB ALL MARKET INCOME PORTFOLIO

 

LOGO

 

As of January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, the Fund’s annual and semi-annual shareholder reports are no longer sent by mail, unless you specifically requested paper copies of the reports. Instead, the reports are made available on a website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

You may elect to receive all future reports in paper form free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call the Fund at (800) 221 5672. Your election to receive reports in paper form will apply to all funds held in your account with your financial intermediary or, if you invest directly, to all AB Mutual Funds you hold.


 

 

 
Investment Products Offered 

  Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AB’s website at www.abfunds.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AB at (800) 227 4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-PORT may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC 0330. AB publishes full portfolio holdings for the Fund monthly at www.abfunds.com.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AB family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the Adviser of the funds.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein® is a registered service mark used by permission of the owner, AllianceBernstein L.P.


 

FROM THE PRESIDENT  LOGO

Dear Shareholder,

We’re pleased to provide this report for the AB All Market Income Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

At AB, we’re striving to help our clients achieve better outcomes by:

 

+  

Fostering diverse perspectives that give us a distinctive approach to navigating global capital markets

 

+  

Applying differentiated investment insights through a connected global research network

 

+  

Embracing innovation to design better ways to invest and leading-edge mutual-fund solutions

Whether you’re an individual investor or a multibillion-dollar institution, we’re putting our knowledge and experience to work for you every day.

For more information about AB’s comprehensive range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in AB mutual funds—and for placing your trust in our firm.

Sincerely,

 

LOGO

Onur Erzan

President and Chief Executive Officer, AB Mutual Funds

 

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ANNUAL REPORT

 

January 5, 2022

This report provides management’s discussion of fund performance for the AB All Market Income Portfolio for the annual reporting period ended November 30, 2021.

The Fund’s investment objective is to seek current income with consideration of capital appreciation.

NAV RETURNS AS OF NOVEMBER 30, 2021 (unaudited)

 

   6 Months   12 Months 
AB ALL MARKET INCOME PORTFOLIO    
Class A Shares   -0.42%    6.95% 
Class C Shares   -0.71%    6.17% 
Advisor Class Shares1   -0.30%    7.20% 
Primary Benchmark: MSCI ACWI (net)   2.83%    19.27% 
Bloomberg Global Aggregate Bond Index (USD hedged)   1.03%    -0.69% 

 

1

Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its primary benchmark, the Morgan Stanley Capital International All Country World Index (“MSCI ACWI”) (net), and the Bloomberg Global Aggregate Bond Index (USD hedged) for the six- and 12-month periods ended November 30, 2021.

During both periods, all share classes of the Fund underperformed the primary benchmark, before sales charges. The Fund’s strategic decision to achieve diversification involved holding assets other than equities; overall, this diversification detracted from performance, relative to the all-equity benchmark. All share classes outperformed the Bloomberg Global Aggregate Bond Index (USD hedged) during the 12-month period, but underperformed during the six-month period, before sales charges.

During the 12-month period, overall security selection within the equity allocation contributed, particularly in equity opportunistic. Allocation to global core equity detracted. Overall security selection in fixed income was also positive; allocation to the AB High Income Fund led contributors, while exposure to non-US sovereigns detracted. Overall security selection within equities was negative during the six-month period. Selection within income

 

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equities detracted, while US concentrated equities contributed. Overall security selection within fixed income was positive, led by contributions from global high-yield synthetic, while emerging-market bonds led detractors.

The Fund utilized derivatives for hedging and investment purposes. For both periods, interest rate swaps, total return swaps and purchased options detracted, while currency forwards and inflation Consumer Price Index swaps contributed to absolute returns. Futures added for the six-month period and detracted for the 12-month period. Credit default swaps detracted for the six-month period and added for the 12-month period. Written options added for the 12-month period.

MARKET REVIEW AND INVESTMENT STRATEGY

Global equities recorded double-digit returns and emerging markets ended in positive territory but lagged developed-market returns during the 12-month period ended November 30, 2021. Equity markets were supported by accommodative monetary policy and strong company earnings growth that remained resilient despite rising inflation. Emerging markets experienced periods of weakness later in the period largely due to economic turbulence in China and as a number of emerging-market central banks raised interest rates to rein in inflation. Periods of market volatility sent risk assets lower but were brief as investors continued to buy the dip. Toward the end of the period, equity markets came under pressure as COVID-19 concerns, especially the emergence of the coronavirus omicron variant, dominated investor sentiment amid escalating fears that a new wave of restrictions could derail the economic recovery. Stock markets gave back more gains after comments from the US Federal Reserve suggested that, given higher inflation readings, it might need to accelerate the tapering of bond purchases, increasing the probability of US interest-rate rises in 2022 earlier than previously expected. Growth outperformed value, in terms of style, and large-cap stocks outperformed their small-cap peers.

Fixed-income market returns were mixed as longer-term treasury returns fell in most major developed markets except Japan on rising yields, particularly in Canada, Australia and the US. Global inflation-linked bonds significantly outperformed treasuries. Relatively low interest rates set the stage for the continued outperformance of risk assets, led by the positive performance of high-yield corporate bonds—particularly in the US, eurozone and emerging markets. Investment-grade corporate bonds in emerging markets and the eurozone also posted strong positive results, while developed-market investment-grade corporate bonds in the US and high-yield emerging-market sovereign bonds outperformed developed-market treasuries with a smaller loss. Securitized asset returns outperformed US Treasuries, particularly among commercial mortgage-backed securities. Local-currency sovereign bonds trailed, as the US dollar gained against most developed- and emerging-market currencies except the Canadian

 

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dollar and Chinese renminbi. Commodity prices were very strong, with Brent crude oil and copper climbing from pandemic-related lows.

The Fund’s Senior Investment Management Team (the “Team”) continues to focus on generating high, stable income with capital growth by investing in global fixed income, global equities and nontraditional assets. The Team utilizes rigorous quantitative research tools and fundamental expertise across all regions and markets.

INVESTMENT POLICIES

The Adviser allocates the Fund’s investments primarily among a broad range of income-producing securities, including common stock of companies that regularly pay dividends, debt securities (including high-yield debt securities, also known as “junk bonds”), preferred stocks and derivatives related to these types of securities. In addition, the Fund may engage in certain alternative income strategies that generally utilize derivatives to diversify sources of income and manage risk. The Fund pursues a global strategy, typically investing in securities of issuers located in the United States and in other countries throughout the world, including emerging-market countries.

In selecting equity securities for the Fund, the Adviser focuses on securities that have high-dividend yields and are undervalued by the market relative to their long-term earnings potential. The Adviser intends to gain exposure to high-yield debt securities through investment in the AB High Income Fund and may, in the future, gain such exposure through direct investments in high-income securities. It is expected that the Fund will pursue a number of generally derivatives-based alternative investment strategies, such as taking long positions in currency derivatives on higher yielding currencies and/or short positions in currency derivatives on lower yielding currencies.

The Adviser adjusts the Fund’s investment exposure utilizing the Adviser’s Dynamic Asset Allocation (“DAA”) approach. DAA comprises a series of analytical and forecasting tools employed by the Adviser to gauge fluctuations in the risk/return profile of various asset classes. DAA seeks to adjust the Fund’s investment exposure in changing market conditions and thereby reduce overall portfolio volatility by mitigating the effects of market fluctuations, while preserving consistent long-term return potential. For example, the Adviser may seek to reduce the Fund’s risk exposure to one or more asset classes when DAA suggests that market risks relevant to those asset classes are rising but return opportunities are declining. In addition to directly increasing or decreasing asset class exposure by buying or selling securities in that asset class, the Adviser may pursue DAA implementation for the Fund by investing in derivatives and exchange-traded funds (“ETFs”).

 

(continued on next page)

 

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The Adviser intends to utilize a variety of derivatives in its management of the Fund. The Adviser may use derivatives to gain exposure to an asset class, such as using interest-rate derivatives to gain exposure to sovereign bonds. As noted above, the Adviser may separately pursue certain alternative investment strategies that utilize derivatives, and may enter into derivatives in making the adjustments called for by DAA. As a result of the use of derivatives and short sales of securities, the Fund may be leveraged, with net investment exposure in excess of its net assets.

Currency exchange-rate fluctuations can have a dramatic impact on returns. The Fund’s foreign currency exposures will come both from investments in equity and debt securities priced or denominated in foreign currencies and from direct holdings of foreign currencies and currency-related derivatives. The Adviser may seek to hedge all or a portion of the currency exposure resulting from Fund investments or decide not to hedge this exposure. The Adviser may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives.

 

 

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DISCLOSURES AND RISKS

 

Benchmark Disclosure

The MSCI ACWI and the Bloomberg Global Aggregate Bond Index (USD hedged) are unmanaged and do not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI ACWI (net, free float-adjusted, market capitalization weighted) represents the equity market performance of developed and emerging markets. The Bloomberg Global Aggregate Bond Index represents the performance of the global investment-grade developed fixed-income markets, hedged to the US dollar. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI. Net returns include the reinvestment of dividends after deduction of non-US withholding tax. An investor cannot invest directly in an index or average, and their results are not indicative of the performance for any specific investment, including the Fund.

A Word About Risk

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 and accrued interest. 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 tend to have a higher probability that an issuer will default or fail to meet its payment obligations.

High-Yield Debt Securities Risk: 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.

Interest-Rate Risk: Changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing 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. The current historically low interest rate environment heightens the risks associated with rising interest rates.

 

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DISCLOSURES AND RISKS (continued)

 

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

Foreign (Non-US) Risk: Investments in securities of non-US issuers may involve more risk than those of US issuers. These securities may fluctuate more widely in price and may be more difficult to trade 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.

Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Fund. Derivatives, especially over-the-counter derivatives, are also subject to counterparty risk, which is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Fund.

Short Sale Risk: Short sales involve the risk that the Fund will incur a loss by subsequently buying a security at a higher price than the price at which it sold the security. The amount of such loss is theoretically unlimited, as it will be based on the increase in value of the security sold short. In contrast, the risk of loss from a long position is limited to the Fund’s investment in the security, because the price of the security cannot fall below zero. The Fund may not always be able to close out a short position on favorable terms.

Leverage Risk: To the extent the Fund uses leveraging techniques, its net asset value (“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.

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, including public health crises (including the occurrence of a contagious disease or illness), that affect large portions of the market.

Illiquid Investments Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling

 

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DISCLOSURES AND RISKS (continued)

 

such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Foreign fixed-income securities may have more illiquid investments risk because secondary trading markets for these securities may be smaller and less well-developed and the securities may trade less frequently. Illiquid investments risk may be higher in a rising interest-rate environment, when the value and liquidity of fixed-income securities generally go down.

Investment in Other Investment Companies Risk: As with other investments, investments in other investment companies are subject to market and selection risk. In addition, shareholders of the Fund bear both their proportionate share of expenses in the Fund (including management fees) and, indirectly, the expenses of the investment companies in which the Fund invests (to the extent these expenses are not waived or reimbursed by the Adviser).

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. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected.

These risks are fully discussed in the Fund’s prospectus. As with all investments, you may lose money by investing in the Fund.

An Important Note About Historical Performance

The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance shown in this report represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.abfunds.com.

All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund’s quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares and a 1% 1-year contingent deferred sales charge for Class C shares. Returns for the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.

 

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HISTORICAL PERFORMANCE

 

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

12/18/20141 TO 11/30/2021

 

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB All Market Income Portfolio Class A shares (from 12/18/20141 to 11/30/2021) as compared to the performance of the Fund’s benchmarks. The chart reflects the deduction of the maximum 4.25% sales charge from the initial $10,000 investment in the Fund and assumes the reinvestment of dividends and capital gains distributions.

 

1

Inception date: 12/18/2014.

 

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HISTORICAL PERFORMANCE (continued)

 

AVERAGE ANNUAL RETURNS AS OF NOVEMBER 30, 2021 (unaudited)

 

  NAV Returns  SEC Returns
(reflects applicable
sales charges)
 
CLASS A SHARES  
1 Year  6.95%   2.44% 
5 Years  4.04%   3.14% 
Since Inception1  4.22%   3.57% 
CLASS C SHARES  
1 Year  6.17%   5.17% 
5 Years  3.27%   3.27% 
Since Inception1  3.45%   3.45% 
ADVISOR CLASS SHARES2  
1 Year  7.20%   7.20% 
5 Years  4.29%   4.29% 
Since Inception1  4.47%   4.47% 

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratios as 1.61%, 2.36% and 1.36% for Class A, Class C and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratios, exclusive of acquired fund fees and expenses, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs, to 0.99%, 1.74% and 0.74% for Class A, Class C and Advisor Class shares, respectively. These waivers/reimbursements may not be terminated before February 28, 2022, and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

 

1

Inception date: 12/18/2014.

 

2

This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns. Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

 

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HISTORICAL PERFORMANCE (continued)

 

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2021 (unaudited)

 

   SEC Returns
(reflects applicable
sales charges)
 
CLASS A SHARES  
1 Year   1.27% 
5 Years   3.13% 
Since Inception1   3.79% 
CLASS C SHARES  
1 Year   3.95% 
5 Years   3.25% 
Since Inception1   3.66% 
ADVISOR CLASS SHARES2  
1 Year   5.97% 
5 Years   4.28% 
Since Inception1   4.69% 

 

1

Inception date: 12/18/2014.

 

2

Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

 

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EXPENSE EXAMPLE

(unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Beginning
Account
Value
June 1,
2021
  Ending
Account
Value
November 30,
2021
  Expenses
Paid
During
Period*
  Annualized
Expense
Ratio*
  Total
Expenses
Paid
During
Period+
  Total
Annualized
Expense
Ratio+
 
Class A    

Actual

  $  1,000  $995.80  $4.45   0.89 $5.00   1.00

Hypothetical**

  $1,000  $  1,020.61  $  4.51   0.89 $  5.06   1.00

 

12    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

EXPENSE EXAMPLE (continued)

 

   Beginning
Account
Value
June 1,
2021
  Ending
Account
Value
November 30,
2021
  Expenses
Paid
During
Period*
  Annualized
Expense
Ratio*
  Total
Expenses
Paid
During
Period+
  Total
Annualized
Expense
Ratio+
 
Class C    

Actual

  $  1,000  $992.90  $8.19   1.64 $8.74   1.75

Hypothetical**

  $1,000  $  1,016.85  $  8.29   1.64 $  8.85   1.75
Advisor Class    

Actual

  $1,000  $997.00  $3.20   0.64 $3.75   0.75

Hypothetical**

  $1,000  $1,021.86  $3.24   0.64 $3.80   0.75

 

*

Expenses are equal to the classes’ annualized expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period), respectively.

 

**

Assumes 5% annual return before expenses.

 

+

In connection with the Fund’s investments in affiliated/unaffiliated underlying portfolios, the Fund incurs no direct expenses, but bears proportionate shares of the acquired fund fees and expenses (i.e., operating, administrative and investment advisory fees) of the affiliated/unaffiliated underlying portfolios. Currently the Adviser has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses of the affiliated underlying portfolios and other expenses of AB High Income Fund. The Fund’s effective expenses are equal to the classes’ annualized expense ratio plus the Fund’s pro rata share of the weighted average expense ratio of the affiliated/unaffiliated underlying portfolios in which it invests, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    13


 

PORTFOLIO SUMMARY

November 30, 2021 (unaudited)

 

PORTFOLIO STATISTICS

Net Assets ($mil): $92.9

 

 

 

LOGO

TEN LARGEST HOLDINGS2

 

Security  U.S. $ Value   Percent of
Net Assets
 
AB High Income Fund, Inc. – Class Z  $15,120,449    16.3
Microsoft Corp.   1,892,958    2.0 
S&P 500 Index   1,306,058    1.4 
Amazon.com, Inc.   904,824    1.0 
Apple, Inc.   894,603    1.0 
Meta Platforms, Inc. – Class A   801,415    0.8 
Alphabet, Inc. – Class C   464,394    0.5 
Anthem, Inc.   464,321    0.5 
Tesla, Inc.   430,430    0.5 
Applied Materials, Inc.   378,868    0.4 
  $  22,658,320    24.4

 

1

All data are as of November 30, 2021. The Fund’s security type breakdown is expressed as a percentage of total investments (excluding security lending collateral) and may vary over time. The Fund also enters into derivative transactions, which may be used for hedging or investment purposes (see “Portfolio of Investments” section of the report for additional details).

 

2

Long-term investments.

 

14    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS

November 30, 2021

 

Company    Shares       
    
U.S. $ Value
 

 

 

COMMON STOCKS – 34.9%

    

Information Technology – 9.2%

    

Communications Equipment – 0.1%

    

Cisco Systems, Inc./Delaware

   1,711   $93,831 
    

 

 

 

Electronic Equipment, Instruments & Components – 0.6%

    

Amphenol Corp. – Class A

   3,304    266,236 

CDW Corp./DE

   1,185    224,392 

IPG Photonics Corp.(a)

   323    53,033 
    

 

 

 
     543,661 
    

 

 

 

IT Services – 1.7%

    

Accenture PLC – Class A

   589    210,509 

Akamai Technologies, Inc.(a)

   1,107    124,759 

Automatic Data Processing, Inc.

   931    214,958 

Capgemini SE

   40    9,235 

Cognizant Technology Solutions Corp. – Class A

   3,443    268,485 

International Business Machines Corp.

   1,580    185,018 

Mastercard, Inc. – Class A

   1,116    351,451 

Visa, Inc. – Class A

   1,016    196,870 
    

 

 

 
     1,561,285 
    

 

 

 

Semiconductors & Semiconductor Equipment – 1.3%

    

Advanced Micro Devices, Inc.(a)

   320    50,678 

Applied Materials, Inc.

   2,574    378,868 

ASM International NV(b)

   15    6,742 

ASML Holding NV

   151    118,517 

Enphase Energy, Inc.(a)

   30    7,500 

KLA Corp.

   308    125,704 

Lam Research Corp.

   294    199,876 

NVIDIA Corp.

   248    81,037 

QUALCOMM, Inc.

   1,193    215,408 
    

 

 

 
     1,184,330 
    

 

 

 

Software – 4.0%

    

Activision Blizzard, Inc.

   2,167    126,986 

Adobe, Inc.(a)

   383    256,553 

Autodesk, Inc.(a)

   535    135,992 

Bentley Systems, Inc.

   897    43,047 

Cadence Design Systems, Inc.(a)

   161    28,571 

Crowdstrike Holdings, Inc. – Class A(a)

   389    84,467 

DocuSign, Inc.(a)

   30    7,391 

Fortinet, Inc.(a)

   498    165,391 

Intuit, Inc.

   30    19,569 

Microsoft Corp.(c)

   5,726    1,892,958 

NortonLifeLock, Inc.

   3,909    97,139 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    15


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Oracle Corp.

   1,309   $118,779 

SAP SE

   1,618    207,349 

ServiceNow, Inc.(a)

   287    185,890 

SS&C Technologies Holdings, Inc.

   1,380    105,335 

Synopsys, Inc.(a)

   273    93,093 

Trade Desk, Inc. (The) – Class A(a)

   260    26,889 

VMware, Inc. – Class A

   1,202    140,321 
    

 

 

 
     3,735,720 
    

 

 

 

Technology Hardware, Storage & Peripherals – 1.5%

    

Apple, Inc.(c)

   5,412    894,603 

HP, Inc.

   2,049    72,289 

NetApp, Inc.

   1,819    161,673 

Samsung Electronics Co., Ltd.

   5,040    302,532 
    

 

 

 
     1,431,097 
    

 

 

 
     8,549,924 
    

 

 

 

Financials – 5.1%

    

Banks – 1.2%

    

ABN AMRO Bank NV (GDR)(b)(d)

   5,931    84,653 

Australia & New Zealand Banking Group Ltd.

   3,202    60,525 

Commonwealth Bank of Australia

   1,227    81,008 

Concordia Financial Group Ltd.

   22,500    81,612 

Credit Agricole SA

   11,027    150,151 

ING Groep NV

   9,848    136,035 

JPMorgan Chase & Co.

   453    71,950 

Mizuho Financial Group, Inc.

   1,900    23,424 

National Bank of Canada

   1,000    77,710 

Nordea Bank Abp

   13,340    157,985 

Skandinaviska Enskilda Banken AB – Class A

   9,799    142,496 

Societe Generale SA

   440    13,692 
    

 

 

 
     1,081,241 
    

 

 

 

Capital Markets – 2.0%

    

Ameriprise Financial, Inc.

   60    17,376 

Apollo Global Management, Inc.(b)

   129    9,131 

BlackRock, Inc. – Class A

   198    179,113 

Carlyle Group, Inc. (The)

   2,423    132,514 

Charles Schwab Corp. (The)

   3,019    233,640 

CME Group, Inc. – Class A

   471    103,865 

Credit Suisse Group AG

   16,132    155,761 

Daiwa Securities Group, Inc.

   11,800    65,437 

EQT AB

   211    12,406 

Goldman Sachs Group, Inc. (The)

   943    359,273 

IGM Financial, Inc.(b)

   3,490    126,137 

London Stock Exchange Group PLC

   856    74,156 

Moody’s Corp.

   526    205,477 

 

16    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Morgan Stanley

   1,450   $137,489 

T Rowe Price Group, Inc.

   315    62,984 
    

 

 

 
     1,874,759 
    

 

 

 

Consumer Finance – 0.3%

    

Ally Financial, Inc.

   3,326    152,430 

American Express Co.

   973    148,188 
    

 

 

 
     300,618 
    

 

 

 

Diversified Financial Services – 0.4%

    

Groupe Bruxelles Lambert SA

   698    75,803 

Investor AB

   6,233    144,833 

Kinnevik AB(a)

   1,600    57,045 

M&G PLC

   47,146    117,014 
    

 

 

 
     394,695 
    

 

 

 

Equity Real Estate Investment Trusts (REITs) – 0.1%

    

Orix JREIT, Inc.

   15    23,919 
    

 

 

 

Insurance – 0.8%

    

Aviva PLC

   5,510    28,121 

Japan Post Holdings Co., Ltd.(a)

   17,900    134,901 

Japan Post Insurance Co., Ltd.

   9,900    152,930 

Legal & General Group PLC

   17,316    64,691 

Manulife Financial Corp.(b)

   1,604    28,679 

Medibank Pvt Ltd.

   4,307    10,523 

MetLife, Inc.

   191    11,204 

NN Group NV

   2,914    144,795 

Phoenix Group Holdings PLC

   2,140    18,172 

PICC Property & Casualty Co., Ltd. – Class H

   30,800    26,332 

Prudential Financial, Inc.

   1,427    145,925 
    

 

 

 
     766,273 
    

 

 

 

Mortgage Real Estate Investment Trusts (REITs) – 0.3%

    

AGNC Investment Corp.

   9,823    150,194 

Annaly Capital Management, Inc.

   18,716    151,599 
    

 

 

 
     301,793 
    

 

 

 
     4,743,298 
    

 

 

 

Health Care – 4.7%

    

Biotechnology – 0.2%

    

AbbVie, Inc.

   1,863    214,767 
    

 

 

 

Health Care Equipment & Supplies – 1.2%

    

Abbott Laboratories

   2,608    328,008 

Align Technology, Inc.(a)

   137    83,780 

Baxter International, Inc.

   121    9,023 

Cooper Cos., Inc. (The)

   571    214,964 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    17


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

IDEXX Laboratories, Inc.(a)

   274   $166,611 

Koninklijke Philips NV

   3,708    130,671 

Medtronic PLC

   1,492    159,197 
    

 

 

 
     1,092,254 
    

 

 

 

Health Care Providers & Services – 0.6%

    

Anthem, Inc.

   1,143    464,321 

Henry Schein, Inc.(a)

   640    45,479 

UnitedHealth Group, Inc.

   83    36,870 
    

 

 

 
     546,670 
    

 

 

 

Life Sciences Tools & Services – 0.9%

    

Bio-Rad Laboratories, Inc. – Class A(a)

   155    116,746 

Eurofins Scientific SE

   170    21,748 

IQVIA Holdings, Inc.(a)

   1,107    286,857 

Mettler-Toledo International, Inc.(a)

   105    158,984 

Sartorius Stedim Biotech

   83    49,001 

Thermo Fisher Scientific, Inc.

   273    172,762 
    

 

 

 
     806,098 
    

 

 

 

Pharmaceuticals – 1.8%

    

AstraZeneca PLC (Sponsored ADR)

   1,371    75,172 

Eli Lilly & Co.

   503    124,764 

Merck & Co., Inc.

   2,131    159,633 

Novo Nordisk A/S – Class B

   1,870    200,183 

Pfizer, Inc.

   4,762    255,862 

Roche Holding AG

   20    8,293 

Roche Holding AG (Genusschein)

   551    215,116 

Sanofi

   2,468    234,614 

Sumitomo Dainippon Pharma Co., Ltd.(b)

   700    8,531 

Takeda Pharmaceutical Co., Ltd.

   4,900    131,090 

Zoetis, Inc.

   1,130    250,905 
    

 

 

 
     1,664,163 
    

 

 

 
     4,323,952 
    

 

 

 

Consumer Discretionary – 4.2%

    

Auto Components – 0.2%

    

Aisin Corp.

   300    11,009 

Aptiv PLC(a)

   1,375    220,481 
    

 

 

 
     231,490 
    

 

 

 

Automobiles – 0.6%

    

Tesla, Inc.(a)

   376    430,430 

Toyota Motor Corp.

   7,200    127,722 
    

 

 

 
     558,152 
    

 

 

 

Distributors – 0.0%

    

LKQ Corp.

   430    24,037 
    

 

 

 

Diversified Consumer Services – 0.1%

    

Service Corp. International/US

   1,918    126,895 
    

 

 

 

 

18    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Hotels, Restaurants & Leisure – 0.4%

    

Booking Holdings, Inc.(a)

   18   $37,833 

Compass Group PLC(a)

   4,983    97,208 

Darden Restaurants, Inc.

   408    56,283 

Domino’s Pizza Enterprises Ltd.

   209    19,120 

Domino’s Pizza, Inc.

   40    20,966 

Galaxy Entertainment Group Ltd.(a)

   23,800    129,387 
    

 

 

 
     360,797 
    

 

 

 

Household Durables – 0.2%

    

Electrolux AB

   1,112    24,967 

Persimmon PLC

   3,878    140,929 
    

 

 

 
     165,896 
    

 

 

 

Internet & Direct Marketing Retail – 1.5%

    

Alibaba Group Holding Ltd. (Sponsored ADR)(a)

   911    116,180 

Amazon.com, Inc.(a)(c)

   258    904,824 

Etsy, Inc.(a)

   217    59,584 

MercadoLibre, Inc.(a)

   29    34,464 

Prosus NV(a)(b)

   3,032    243,660 
    

 

 

 
     1,358,712 
    

 

 

 

Media – 0.1%

    

Vivendi SE

   7,164    91,233 
    

 

 

 

Multiline Retail – 0.2%

    

Target Corp.

   741    180,685 
    

 

 

 

Specialty Retail – 0.4%

    

Best Buy Co., Inc.

   645    68,925 

Home Depot, Inc. (The)

   30    12,018 

Lowe’s Cos., Inc.

   439    107,375 

TJX Cos., Inc. (The)

   2,454    170,308 
    

 

 

 
     358,626 
    

 

 

 

Textiles, Apparel & Luxury Goods – 0.5%

    

Kering SA

   79    60,837 

NIKE, Inc. – Class B

   1,944    329,003 

Pandora A/S

   253    31,479 
    

 

 

 
     421,319 
    

 

 

 
     3,877,842 
    

 

 

 

Communication Services – 3.0%

    

Diversified Telecommunication Services – 0.6%

    

AT&T, Inc.

   3,825    87,325 

Comcast Corp. – Class A

   3,688    184,326 

Orange SA

   3,023    32,500 

Spark New Zealand Ltd.

   42,494    132,903 

Telefonica SA(b)

   35,331    160,298 
    

 

 

 
     597,352 
    

 

 

 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    19


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Entertainment – 0.5%

    

Electronic Arts, Inc.

   2,199   $273,160 

Netflix, Inc.(a)

   175    112,332 

Sea Ltd. (ADR)(a)

   155    44,651 
    

 

 

 
     430,143 
    

 

 

 

Interactive Media & Services – 1.5%

    

Alphabet, Inc. – Class A(a)(c)

   42    119,194 

Alphabet, Inc. – Class C(a)(c)

   163    464,394 

Meta Platforms, Inc. – Class A(a)(c)

   2,470    801,415 
    

 

 

 
     1,385,003 
    

 

 

 

Media – 0.2%

    

Interpublic Group of Cos., Inc. (The)

   358    11,882 

Omnicom Group, Inc.

   1,951    131,322 

Publicis Groupe SA

   618    39,990 
    

 

 

 
     183,194 
    

 

 

 

Wireless Telecommunication Services – 0.2%

    

Softbank Corp.

   10,600    145,904 

SoftBank Group Corp.

   1,700    89,339 
    

 

 

 
     235,243 
    

 

 

 
     2,830,935 
    

 

 

 

Industrials – 2.4%

    

Aerospace & Defense – 0.1%

    

Huntington Ingalls Industries, Inc.

   435    77,217 
    

 

 

 

Air Freight & Logistics – 0.1%

    

Deutsche Post AG

   1,103    65,145 

Kuehne & Nagel International AG

   259    74,040 
    

 

 

 
     139,185 
    

 

 

 

Building Products – 0.5%

    

Cie de Saint-Gobain

   1,283    81,381 

Lixil Corp.

   800    19,571 

Otis Worldwide Corp.

   3,990    320,796 

Owens Corning

   300    25,452 
    

 

 

 
     447,200 
    

 

 

 

Construction & Engineering – 0.0%

    

Kajima Corp.

   2,700    29,694 
    

 

 

 

Electrical Equipment – 0.3%

    

Emerson Electric Co.

   1,215    106,726 

Rockwell Automation, Inc.

   222    74,636 

Vertiv Holdings Co.

   2,414    61,895 
    

 

 

 
     243,257 
    

 

 

 

Industrial Conglomerates – 0.1%

    

3M Co.

   670    113,927 
    

 

 

 

 

20    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Machinery – 0.7%

    

Cummins, Inc.

   462   $96,904 

Dover Corp.

   969    158,771 

Mitsubishi Heavy Industries Ltd.

   5,700    127,854 

Parker-Hannifin Corp.

   532    160,696 

Snap-on, Inc.

   63    12,972 

Volvo AB – Class B

   4,658    100,285 
    

 

 

 
     657,482 
    

 

 

 

Marine – 0.1%

    

Nippon Yusen KK

   300    19,430 

SITC International Holdings Co., Ltd.

   7,000    27,947 
    

 

 

 
     47,377 
    

 

 

 

Professional Services – 0.4%

    

Booz Allen Hamilton Holding Corp.

   183    15,361 

RELX PLC

   1,721    53,407 

Robert Half International, Inc.

   989    109,947 

Verisk Analytics, Inc. – Class A

   911    204,857 
    

 

 

 
     383,572 
    

 

 

 

Road & Rail – 0.1%

    

Aurizon Holdings Ltd.

   15,573    37,242 

Nippon Express Co., Ltd.

   500    28,465 
    

 

 

 
     65,707 
    

 

 

 
     2,204,618 
    

 

 

 

Energy – 1.6%

    

Oil, Gas & Consumable Fuels – 1.6%

    

Canadian Natural Resources Ltd.

   2,018    82,524 

Devon Energy Corp.

   1,730    72,764 

Enbridge, Inc.

   2,177    81,681 

Eni SpA

   11,600    152,862 

EOG Resources, Inc.

   1,225    106,575 

Inpex Corp.

   11,400    93,282 

Keyera Corp.(b)

   2,706    59,439 

LUKOIL PJSC (Sponsored ADR)

   1,001    88,268��

Marathon Petroleum Corp.

   2,625    159,731 

Neste Oyj

   1,078    50,986 

OMV AG

   2,183    115,928 

ONEOK, Inc.

   2,564    153,430 

Royal Dutch Shell PLC – Class B

   6,250    130,975 

Suncor Energy, Inc.

   2,419    58,929 

Valero Energy Corp.

   855    57,234 
    

 

 

 
     1,464,608 
    

 

 

 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    21


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Real Estate – 1.6%

    

Equity Real Estate Investment Trusts (REITs) – 1.4%

    

American Tower Corp.

   775   $203,422 

Duke Realty Corp.

   762    44,447 

Extra Space Storage, Inc.

   808    161,600 

Iron Mountain, Inc.(b)

   3,215    146,090 

Omega Healthcare Investors, Inc.

   4,826    134,838 

Public Storage

   344    112,619 

RioCan Real Estate Investment Trust

   430    7,153 

Simon Property Group, Inc.

   443    67,708 

Stockland

   41,523    128,193 

VICI Properties, Inc.(b)

   4,483    121,938 

Vornado Realty Trust

   906    36,367 

Weyerhaeuser Co.

   2,065    77,665 
    

 

 

 
     1,242,040 
    

 

 

 

Real Estate Management & Development – 0.2%

    

CBRE Group, Inc. – Class A(a)

   1,593    152,243 

Nomura Real Estate Holdings, Inc.

   2,900    62,879 
    

 

 

 
     215,122 
    

 

 

 
     1,457,162 
    

 

 

 

Materials – 1.3%

    

Chemicals – 0.6%

    

Celanese Corp. – Class A

   67    10,141 

Clariant AG(a)

   1,140    22,323 

International Flavors & Fragrances, Inc.

   754    107,196 

Linde PLC

   464    147,617 

Mitsubishi Chemical Holdings Corp.

   7,000    54,721 

Mosaic Co. (The)

   850    29,087 

Sumitomo Chemical Co., Ltd.

   31,200    143,116 

Umicore SA

   240    11,736 
    

 

 

 
     525,937 
    

 

 

 

Containers & Packaging – 0.1%

    

Packaging Corp. of America

   1,100    143,649 
    

 

 

 

Metals & Mining – 0.6%

    

BHP Group Ltd.(b)

   4,951    138,696 

Evraz PLC

   18,270    139,278 

Fortescue Metals Group Ltd.

   13,968    167,738 

Rio Tinto Ltd.

   1,388    92,098 

Steel Dynamics, Inc.

   370    22,126 

Teck Resources Ltd. – Class B

   610    16,178 
    

 

 

 
     576,114 
    

 

 

 
     1,245,700 
    

 

 

 

 

22    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Consumer Staples – 1.1%

    

Beverages – 0.6%

    

Asahi Group Holdings Ltd.

   4,190   $154,528 

Coca-Cola Co. (The)

   5,804    304,420 

Constellation Brands, Inc. – Class A

   476    107,257 
    

 

 

 
     566,205 
    

 

 

 

Food & Staples Retailing – 0.0%

    

Kroger Co. (The)

   362    15,034 
    

 

 

 

Tobacco – 0.5%

    

Altria Group, Inc.

   3,662    156,148 

Imperial Brands PLC

   7,603    155,380 

Philip Morris International, Inc.

   1,987    170,763 
    

 

 

 
     482,291 
    

 

 

 
     1,063,530 
    

 

 

 

Utilities – 0.7%

    

Electric Utilities – 0.2%

    

AusNet Services Ltd.

   11,570    20,897 

Endesa SA

   4,830    108,650 

Iberdrola SA

   7,708    86,577 

NRG Energy, Inc.

   340    12,247 
    

 

 

 
     228,371 
    

 

 

 

Gas Utilities – 0.2%

    

AltaGas Ltd.

   5,831    110,919 

Snam SpA

   3,103    17,486 

UGI Corp.

   1,276    52,635 
    

 

 

 
     181,040 
    

 

 

 

Independent Power and Renewable Electricity Producers – 0.1%

    

Uniper SE

   2,065    89,654 
    

 

 

 

Multi-Utilities – 0.2%

    

Atco Ltd./Canada – Class I

   1,208    39,367 

E.ON SE

   5,099    62,903 

Sempra Energy

   326    39,078 
    

 

 

 
     141,348 
    

 

 

 
     640,413 
    

 

 

 

Total Common Stocks
(cost $31,128,348)

     32,401,982 
    

 

 

 
    

INVESTMENT COMPANIES – 16.3%

    

Funds and Investment Trusts – 16.3%(e)(f)

    

AB High Income Fund, Inc. – Class Z
(cost $15,241,298)

   1,921,277    15,120,449 
    

 

 

 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    23


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

PREFERRED STOCKS – 7.1%

    

Real Estate – 7.1%

    

Diversified REITs – 1.5%

    

Armada Hoffler Properties, Inc.
Series A
6.75%

   7,725   $197,760 

DigitalBridge Group, Inc.
Series H
7.125%(b)

   1,751    43,407 

DigitalBridge Group, Inc.
Series I
7.15%

   11,710    295,092 

DigitalBridge Group, Inc.
Series J
7.125%

   6,098    157,389 

Gladstone Commercial Corp.
Series E
6.625%

   2,270    59,860 

Gladstone Commercial Corp.
Series G
6.00%

   3,125    84,344 

Global Net Lease, Inc.
Series A
7.25%

   3,467    88,478 

Global Net Lease, Inc.
Series B
6.875%

   4,450    114,499 

PS Business Parks, Inc.
Series Y
5.20%

   5,441    139,290 

PS Business Parks, Inc.
Series Z
4.875%

   2,700    70,902 

Vornado Realty Trust
Series L
5.40%(b)

   6,516    163,486 
    

 

 

 
     1,414,507 
    

 

 

 

Equity Real Estate Investment Trusts (REITs) – 0.1%

    

Healthcare Trust, Inc.
Series B
7.125%

   1,033    25,949 

Hudson Pacific Properties, Inc.
Series C
4.75%

   4,175    105,043 
    

 

 

 
     130,992 
    

 

 

 

 

24    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Health Care REITs – 0.1%

    

Global Medical REIT, Inc.
Series A
7.50%

   2,320   $59,508 
    

 

 

 

Hotel & Resort REITs – 0.9%

    

Chatham Lodging Trust
Series A
6.625%

   3,680    94,392 

DiamondRock Hospitality Co.
8.25%

   6,875    185,212 

Hersha Hospitality Trust
Series C
6.875%

   3,635    85,423 

Hersha Hospitality Trust
Series D
6.50%

   2,481    57,683 

Hersha Hospitality Trust
Series E
6.50%

   1,757    41,001 

Pebblebrook Hotel Trust
Series E
6.375%

   4,819    119,126 

Pebblebrook Hotel Trust
Series F
6.30%

   3,002    73,699 

Summit Hotel Properties, Inc.
Series E
6.25%

   1,075    27,005 

Summit Hotel Properties, Inc.
Series F
5.875%

   6,950    172,429 
    

 

 

 
     855,970 
    

 

 

 

Industrial REITs – 0.4%

    

Monmouth Real Estate Investment Corp.
Series C
6.125%

   7,925    198,204 

Plymouth Industrial REIT, Inc.
Series A
7.50%

   1,100    29,315 

Rexford Industrial Realty, Inc.
Series B
5.875%

   4,168    107,618 

Rexford Industrial Realty, Inc.
Series C
5.625%

   3,072    80,855 
    

 

 

 
     415,992 
    

 

 

 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    25


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Office REITs – 0.3%

    

City Office REIT, Inc.
Series A
6.625%

   4,841   $121,896 

SL Green Realty Corp.
Series I
6.50%(b)

   1,718    44,325 

Vornado Realty Trust
Series M
5.25%(b)

   4,821    122,791 

Vornado Realty Trust
Series N
5.25%

   875    22,479 
    

 

 

 
     311,491 
    

 

 

 

Real Estate Development – 0.9%

    

Agree Realty Corp.
Series A
4.25%

   11,050    261,443 

American Finance Trust, Inc.
Series C
7.375%

   8,325    218,448 

Pebblebrook Hotel Trust
Series G
6.375%

   5,497    139,624 

Sunstone Hotel Investors, Inc.
Series H
6.125%

   2,925    74,412 

Vornado Realty Trust
Series O
4.45%

   5,500    134,585 
    

 

 

 
   828,512 
  

 

 

 

Real Estate Operating Companies – 0.1%

    

Brookfield Property Partners LP
Series A
5.75%

   335    7,933 

Brookfield Property Partners LP
Series A2
6.375%

   2,779    69,836 
    

 

 

 
   77,769 
  

 

 

 

Real Estate Services – 0.2%

 

CTO Realty Growth, Inc.
Series A
6.375%

   2,243    58,879 

Sunstone Hotel Investors, Inc.
Series I
5.70%

   3,700    92,148 
    

 

 

 
   151,027 
  

 

 

 

 

26    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

Company   Shares       
    
U.S. $ Value
 

 

 

Residential REITs – 0.6%

 

American Homes 4 Rent
Series F
5.875%

   1,683   $42,664 

American Homes 4 Rent
Series G
5.875%

   393    9,982 

American Homes 4 Rent
Series H
6.25%

   801    21,026 

Bluerock Residential Growth REIT, Inc.
Series D
7.125%

   2,741    69,210 

Centerspace
Series C
6.625%

   3,614    92,880 

UMH Properties, Inc.
Series C
6.75%

   6,216    159,068 

UMH Properties, Inc.
Series D
6.375%

   5,800    151,902 
    

 

 

 
   546,732 
  

 

 

 

Retail REITs – 1.0%

 

American Finance Trust, Inc.
Series A
7.50%

   1,075    28,240 

Cedar Realty Trust, Inc.
Series C
6.50%

   6,003    151,036 

Saul Centers, Inc.
Series D
6.125%

   7,607    194,511 

Saul Centers, Inc.
Series E
6.00%

   695    18,932 

SITE Centers Corp.
Series A
6.375%(b)

   5,081    127,177 

Spirit Realty Capital, Inc.
Series A
6.00%

   5,738    145,745 

Urstadt Biddle Properties, Inc.
Series H
6.25%

   2,000    50,500 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    27


 

PORTFOLIO OF INVESTMENTS (continued)

 

Company    Shares       
    
U.S. $ Value
 

 

 

Urstadt Biddle Properties, Inc.
Series K
5.875%(b)

   6,638   $167,211 
    

 

 

 
   883,352 
  

 

 

 

Specialized REITs – 1.0%

 

Digital Realty Trust, Inc.
Series J
5.25%

   825    21,244 

Digital Realty Trust, Inc.
Series K
5.85%(b)

   2,840    77,589 

Digital Realty Trust, Inc.
Series L
5.20%(b)

   9,200    245,180 

EPR Properties
Series G
5.75%(b)

   805    20,141 

National Storage Affiliates Trust
Series A
6.00%

   8,819    227,971 

Public Storage
Series L
4.625%(b)

   1,901    49,749 

Public Storage
Series M
4.125%

   3,905    97,977 

Public Storage
Series P
4.00%(b)

   6,615    162,398 
    

 

 

 
   902,249 
  

 

 

 

Total Preferred Stocks
(cost $6,358,887)

     6,578,101 
  

 

 

 
   Principal
Amount
(000)
     

EMERGING MARKETS –
SOVEREIGNS – 2.4%

    

Argentina – 0.1%

 

Argentine Republic Government International Bond
0.50%, 07/09/2030

  U.S.$   109    33,548 

1.00%, 07/09/2029

   16    5,371 

1.125%, 07/09/2035

   188    52,427 
    

 

 

 
     91,346 
    

 

 

 

 

28    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

     Principal
Amount
(000)
       
    
U.S. $ Value
 

 

 

Bahrain – 0.2%

 

Bahrain Government International Bond
7.00%, 10/12/2028(d)

  U.S.$   200   $214,250 
    

 

 

 

Dominican Republic – 0.2%

 

Dominican Republic International Bond
6.40%, 06/05/2049(d)

   200    203,850 
    

 

 

 

Ecuador – 0.2%

 

Ecuador Government International Bond

    

Zero Coupon, 07/31/2030(d)

   12    6,407 

0.50%, 07/31/2040(d)

   45    25,821 

1.00%, 07/31/2035(d)

   99    63,894 

5.00%, 07/31/2030(d)

   38    30,807 
    

 

 

 
     126,929 
    

 

 

 

Egypt – 0.2%

 

Egypt Government International Bond
8.70%, 03/01/2049(d)

   200    170,750 
    

 

 

 

El Salvador – 0.1%

 

El Salvador Government International Bond
6.375%, 01/18/2027(d)

   182    117,481 
    

 

 

 

Gabon – 0.2%

 

Gabon Government International Bond
6.625%, 02/06/2031(d)

   200    187,413 
    

 

 

 

Ghana – 0.2%

 

Ghana Government International Bond
8.95%, 03/26/2051(d)

   200    153,500 
    

 

 

 

Guatemala – 0.2%

 

Guatemala Government Bond
4.90%, 06/01/2030(d)

   200    213,600 
    

 

 

 

Ivory Coast – 0.2%

 

Ivory Coast Government International Bond
5.375%, 07/23/2024(d)

   200    207,787 
    

 

 

 

Kenya – 0.2%

 

Republic of Kenya Government International Bond
6.875%, 06/24/2024(d)

   200    210,400 
    

 

 

 

Lebanon – 0.0%

 

Lebanon Government International Bond
6.60%, 11/27/2026(a)(d)(g)

   107    11,770 
    

 

 

 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    29


 

PORTFOLIO OF INVESTMENTS (continued)

 

    Principal
Amount
(000)
       
    
U.S. $ Value
 

 

 

Senegal – 0.2%

 

Senegal Government International Bond
6.75%, 03/13/2048(d)

 U.S.$  200   $192,500 
    

 

 

 

Ukraine – 0.2%

 

Ukraine Government International Bond
7.75%, 09/01/2027(d)

   150    149,625 
    

 

 

 

Total Emerging Markets – Sovereigns
(cost $2,584,422)

    2,251,201 
   

 

 

 
    Notional
Amount
     

OPTIONS PURCHASED – PUTS – 2.0%

 

Options on Equity Indices – 2.0%

 

Euro STOXX 50 Index
Expiration: Jun 2022; Contracts: 1,540; Exercise Price: EUR 3,550.00;
Counterparty: Bank of America, NA(a)

 EUR  5,467,000    248,179 

Euro STOXX 50 Index
Expiration: Jun 2022; Contracts: 120; Exercise Price: EUR 3,550.00;
Counterparty: Bank of America, NA(a)

   426,000    19,339 

FTSE 100 Index
Expiration: May 2022; Contracts: 320; Exercise Price: GBP 6,200.00;
Counterparty: Bank of America, NA(a)

 GBP  1,984,000    71,832 

FTSE 100 Index
Expiration: May 2022; Contracts: 30; Exercise Price: GBP 6,200.00;
Counterparty: Bank of America, NA(a)

   186,000    6,734 

Nikkei 225 Index
Expiration: May 2022; Contracts: 1,000; Exercise Price: JPY 24,500.00;
Counterparty: UBS AG(a)

 JPY  24,500,000    6,452 

Nikkei 225 Index
Expiration: May 2022; Contracts: 20,000; Exercise Price: JPY 24,500.00;
Counterparty: UBS AG(a)

   490,000,000    129,034 

S&P 500 Index
Expiration: May 2022; Contracts: 700; Exercise Price: USD 3,900.00;
Counterparty: UBS AG(a)

 USD  2,730,000    80,197 

S&P 500 Index
Expiration: May 2022; Contracts: 11,400; Exercise Price: USD 3,900.00;
Counterparty: UBS AG(a)

   44,460,000    1,306,058 
    

 

 

 

Total Options Purchased – Puts
(premiums paid $1,215,652)

    1,867,825 
   

 

 

 

 

30    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

     Principal
Amount
(000)
       
    
U.S. $ Value
 

 

 

GOVERNMENTS – TREASURIES – 0.6%

    

Colombia – 0.1%

    

Colombian TES
Series B
6.25%, 11/26/2025

  COP   492,700   $119,191 
    

 

 

 

Indonesia – 0.2%

    

Indonesia Treasury Bond
Series FR70
8.375%, 03/15/2024

  IDR   1,105,000    84,249 

Series FR71
9.00%, 03/15/2029

   1,438,000    116,918 
    

 

 

 
     201,167 
    

 

 

 

Mexico – 0.2%

    

Mexican Bonos
Series M 20
10.00%, 12/05/2024

  MXN   2,777    139,384 
    

 

 

 

Russia – 0.1%

    

Russian Federal Bond – OFZ
Series 6215
7.00%, 08/16/2023

  RUB   9,626    127,002 
    

 

 

 

Total Governments – Treasuries
(cost $646,100)

     586,744 
    

 

 

 
    

EMERGING MARKETS – TREASURIES – 0.3%

    

Brazil – 0.1%

    

Brazil Notas do Tesouro Nacional
Series NTNF
10.00%, 01/01/2023-01/01/2025

  BRL   658    113,821 
    

 

 

 

South Africa – 0.2%

    

Republic of South Africa Government Bond
Series 2032
8.25%, 03/31/2032

  ZAR   2,848    156,651 
    

 

 

 

Total Emerging Markets – Treasuries
(cost $308,603)

     270,472 
    

 

 

 
    

QUASI-SOVEREIGNS – 0.1%

    

Quasi-Sovereign Bonds – 0.1%

    

Mexico – 0.1%

    

Petroleos Mexicanos
5.95%, 01/28/2031

  U.S.$   43    40,278 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    31


 

PORTFOLIO OF INVESTMENTS (continued)

 

     Principal
Amount
(000)
       
    
U.S. $ Value
 

 

 

7.69%, 01/23/2050

  U.S.$   97   $87,039 
    

 

 

 

Total Quasi-Sovereigns
(cost $135,752)

     127,317 
    

 

 

 
     Shares     

SHORT-TERM INVESTMENTS – 33.5%

    

Investment Companies – 28.6%

    

AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.01%(e)(f)(h)
(cost $26,524,878)

   26,524,878    26,524,878 
    

 

 

 
     Principal
Amount
(000)
     

U.S. Treasury Bills – 4.9%

    

U.S. Treasury Bill
Zero Coupon, 12/09/2021
(cost $4,574,959)

  U.S.$   4,575    4,574,970 
    

 

 

 

Total Investments Before Security Lending Collateral for Securities
Loaned – 97.2%

(cost $88,718,899)

     90,303,939 
    

 

 

 
     Shares     

INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED – 0.8%

    

Investment Companies – 0.8%

    

AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.01%(e)(f)(h)
(cost $726,871)

   726,871    726,871 
    

 

 

 

Total Investments – 98.0%
(cost $89,445,770)

     91,030,810 

Other assets less liabilities – 2.0%

     1,849,807 
    

 

 

 

Net Assets – 100.0%

    $    92,880,617 
    

 

 

 

 

32    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

FUTURES (see Note D)

 

Description  

Number of

Contracts

   Expiration
Month
   Current
Notional
   Value and
Unrealized
Appreciation/
(Depreciation)
 

Purchased Contracts

 

10 Yr Mini Japan Government Bond Futures

   2    December 2021   $268,961   $328 

Euro STOXX 50 Index Futures

   51    December 2021      2,358,102    (93,307

Euro-Bund Futures

   9    December 2021    1,759,364    11,456 

FTSE 100 Index Futures

   9    December 2021    847,385    (21,943

FTSE China A50 Futures

   9    December 2021    138,546    (2,839

FTSE KLCI Futures

   1    December 2021    18,034    (11

FTSE Taiwan Index Futures

   5    December 2021    302,200    (6,817

Long Gilt Future

   1    March 2022    167,946    (294

S&P 500 E-Mini Futures

   44    December 2021    10,045,750    (99,423

SET 50 Futures

   137    December 2021    755,630    (38,287

TOPIX Index Futures

   12    December 2021    2,012,828    (124,543

U.S. T-Note 10 Yr (CBT) Futures

   5    March 2022    654,063    1,711 

WIG 20 Index Futures

   2    December 2021    21,367    (1,233

Sold Contracts

 

BIST 30 Futures

   359    December 2021    518,112    (20,867

Euro STOXX 50 Index Futures

   2    December 2021    92,475    1,815 

FTSE 100 Index Futures

   3    December 2021    282,461    2,017 

FTSE/JSE Top 40 Futures

   19    December 2021    765,304    (41,159

Hang Seng Index Futures

   4    December 2021    602,078    30,412 

Mexican BOLSA Index Futures

   8    December 2021    184,755    7,906 

MSCI Singapore IX ETS Futures

   27    December 2021    681,060    37,928 

OMXS30 Index Futures

   24    December 2021    597,105    36,878 

S&P 500 E-Mini Futures

   10    December 2021    2,283,125    (32,128

S&P TSX 60 Index Futures

   4    December 2021    780,305    26,766 

SGX Nifty 50 Futures

   13    December 2021    443,651    10,603 

WIG 20 Index Futures

   9    December 2021    96,153    (86
        

 

 

 
        $  (315,117
        

 

 

 

FORWARD CURRENCY EXCHANGE CONTRACTS (see Note D)

 

Counterparty  Contracts to
Deliver
(000)
   In Exchange
For
(000)
   Settlement
Date
   Unrealized
Appreciation/
(Depreciation)
 

Bank of America, NA

  PEN   6,628    USD    1,647    01/21/2022   $21,495 

Bank of America, NA

  CNY   1,593    USD    246    12/09/2021    (4,175

Bank of America, NA

  USD   167    RUB    11,950    12/15/2021    (5,753

Bank of America, NA

  USD   2,363    NOK    20,633    12/15/2021    (82,223

Barclays Bank PLC

  COP   10,063,274    USD    2,609    01/21/2022    103,370 

Barclays Bank PLC

  IDR   6,963,994    USD    485    01/27/2022    2,111 

Barclays Bank PLC

  IDR   1,204,999    USD    83    01/27/2022    (562

Barclays Bank PLC

  JPY   91,386    USD    801    12/15/2021    (7,763

Barclays Bank PLC

  PHP   163,773    USD    3,204    01/27/2022      (36,512

Barclays Bank PLC

  INR   71,460    USD    948    01/07/2022    (1,153

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    33


 

PORTFOLIO OF INVESTMENTS (continued)

 

Counterparty  Contracts to
Deliver
(000)
   In Exchange
For
(000)
   Settlement
Date
   Unrealized
Appreciation/
(Depreciation)
 

Barclays Bank PLC

  TWD   14,073   USD   508    01/20/2022   $(2,240

Barclays Bank PLC

  PHP   6,469   USD   128    01/27/2022    415 

Barclays Bank PLC

  CNY   3,987   USD   622    12/09/2021    (3,406

Barclays Bank PLC

  CAD   1,465   USD   1,152    12/15/2021    5,491 

Barclays Bank PLC

  MYR   889   USD   211    12/22/2021    757 

Barclays Bank PLC

  GBP   467   USD   624    12/15/2021    3,170 

Barclays Bank PLC

  USD   2,026   MYR   8,458    12/22/2021      (21,482

Barclays Bank PLC

  USD   245   TWD   6,773    01/20/2022    1,002 

Barclays Bank PLC

  USD   886   NOK   7,902    12/15/2021    (12,872

Barclays Bank PLC

  USD   981   SEK   8,626    12/15/2021    (23,338

Barclays Bank PLC

  USD   3,423   PHP   175,467    01/27/2022    49,299 

Barclays Bank PLC

  USD   1,224   SEK   11,047    12/15/2021    2,198 

Barclays Bank PLC

  USD   2,024   INR   151,295    01/07/2022    (15,431

Barclays Bank PLC

  USD   257   KRW   302,623    01/20/2022    (1,620

Barclays Bank PLC

  USD   937   CLP   770,682    01/21/2022    (10,499

Barclays Bank PLC

  USD   172   IDR   2,454,626    01/27/2022    (1,216

Barclays Bank PLC

  USD   486   IDR   7,016,597    01/27/2022    498 

BNP Paribas SA

  HUF   248,206   USD   838    12/07/2021    65,696 

BNP Paribas SA

  USD   2,512   CAD   3,156    12/15/2021    (41,862

Citibank, NA

  USD   674   SEK   5,980    12/15/2021    (9,917

Credit Suisse International

  CZK   11,610   USD   515    12/07/2021    (1,318

Credit Suisse International

  CNY   8,009   USD   1,255    12/09/2021    (2,446

Credit Suisse International

  GBP   538   USD   715    12/15/2021    (198

Credit Suisse International

  EUR   503   USD   567    12/15/2021    (3,918

Credit Suisse International

  USD   2,739   CNY   17,609    12/09/2021    25,204 

Credit Suisse International

  USD   304   HUF   97,986    12/07/2021    861 

Credit Suisse International

  USD   559   HUF   174,993    12/07/2021    (14,660

Deutsche Bank AG

  CLP   482,544   USD   596    01/21/2022    15,669 

Deutsche Bank AG

  INR   53,258   USD   706    01/07/2022    (1,025

Deutsche Bank AG

  RUB   21,606   USD   293    12/15/2021    2,490 

Deutsche Bank AG

  BRL   1,504   USD   274    12/02/2021    6,300 

Deutsche Bank AG

  GBP   432   USD   580    12/15/2021    5,371 

Deutsche Bank AG

  PEN   396   USD   97    01/21/2022    (197

Deutsche Bank AG

  PEN   346   USD   86    01/21/2022    835 

Deutsche Bank AG

  USD   268   BRL   1,504    12/02/2021    (93

Deutsche Bank AG

  USD   89   CLP   72,837    01/21/2022    (1,640

Deutsche Bank AG

  USD   1,598   RUB   117,786    12/15/2021    (13,575

Deutsche Bank AG

  USD   522   COP   2,048,065    01/21/2022    (11,568

Deutsche Bank AG

  USD   1,018   KRW   1,206,799    01/20/2022    890 

Goldman Sachs International

  HUF   183,971   USD   589    12/07/2021    16,557 

Goldman Sachs International

  RUB   112,435   USD   1,551    12/15/2021    38,428 

 

34    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

Counterparty  Contracts to
Deliver
(000)
   In Exchange
For
(000)
   Settlement
Date
   Unrealized
Appreciation/
(Depreciation)
 

Goldman Sachs International

  ZAR   13,806   USD   867    01/25/2022   $5,289 

Goldman Sachs International

  RUB   4,506   USD   61    12/15/2021    (26

Goldman Sachs International

  BRL   1,708   USD   304    12/02/2021    106 

Goldman Sachs International

  AUD   891   USD   643    12/15/2021    7,714 

Goldman Sachs International

  USD   108   BRL   610    12/02/2021    525 

Goldman Sachs International

  USD   197   BRL   1,098    12/02/2021    (1,659

Goldman Sachs International

  USD   1,299   MYR   5,403    12/22/2021    (18,880

Goldman Sachs International

  USD   1,189   RUB   86,090    12/15/2021    (31,099

HSBC Bank USA

  KRW   1,119,129   USD   949    01/20/2022    3,595 

HSBC Bank USA

  INR   65,777   USD   863    01/07/2022    (10,066

HSBC Bank USA

  IDR   37,171   USD   3    01/27/2022    4 

HSBC Bank USA

  AUD   2,684   USD   1,962    12/15/2021    47,771 

HSBC Bank USA

  PLN   2,390   USD   620    12/07/2021    37,879 

HSBC Bank USA

  USD   961   TWD   26,965    01/20/2022    17,142 

HSBC Bank USA

  USD   1,821   INR   137,041    01/07/2022    (1,465

HSBC Bank USA

  USD   177   CLP   143,485    01/21/2022    (4,695

Morgan Stanley Capital Services, Inc.

  TWD   47,447   USD   1,695    01/20/2022      (26,538

Morgan Stanley Capital Services, Inc.

  BRL   8,713   USD   1,550    12/02/2021    538 

Morgan Stanley Capital Services, Inc.

  USD   1,551   BRL   8,713    12/02/2021    (1,656

Standard Chartered Bank

  INR   45,937   USD   617    01/07/2022    7,587 

Standard Chartered Bank

  PHP   14,594   USD   290    01/27/2022    935 

Standard Chartered Bank

  USD   959   IDR   13,777,108    01/27/2022    (2,707

State Street Bank & Trust Co.

  THB   76,063   USD   2,246    12/09/2021    (10,926

State Street Bank & Trust Co.

  THB   28,846   USD   872    12/09/2021    16,202 

State Street Bank & Trust Co.

  MXN   11,066   USD   541    01/13/2022    28,888 

State Street Bank & Trust Co.

  CZK   11,704   USD   517    12/07/2021    (3,021

State Street Bank & Trust Co.

  NOK   4,503   USD   498    12/15/2021    (157

State Street Bank & Trust Co.

  CZK   7,421   USD   340    12/07/2021    10,559 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    35


 

PORTFOLIO OF INVESTMENTS (continued)

 

Counterparty  Contracts to
Deliver
(000)
   In Exchange
For
(000)
   Settlement
Date
   Unrealized
Appreciation/
(Depreciation)
 

State Street Bank & Trust Co.

  ZAR   1,873   USD   118    01/25/2022   $863 

State Street Bank & Trust Co.

  NZD   308   USD   217    12/15/2021    7,192 

State Street Bank & Trust Co.

  GBP   270   USD   363    12/15/2021    3,673 

State Street Bank & Trust Co.

  GBP   94   USD   128    01/14/2022    2,422 

State Street Bank & Trust Co.

  EUR   52   USD   59    12/15/2021    (378

State Street Bank & Trust Co.

  USD   92   NZD   133    12/15/2021    (1,598

State Street Bank & Trust Co.

  USD   169   EUR   148    12/15/2021    (1,195

State Street Bank & Trust Co.

  USD   125   CAD   156    12/15/2021    (2,460

State Street Bank & Trust Co.

  USD   519   CHF   481    12/15/2021    5,561 

State Street Bank & Trust Co.

  USD   805   PLN   3,258    12/07/2021    (11,694

State Street Bank & Trust Co.

  USD   172   AUD   242    12/15/2021    210 

State Street Bank & Trust Co.

  USD   402   EUR   355    12/15/2021    200 

State Street Bank & Trust Co.

  USD   383   CAD   489    12/15/2021    268 

State Street Bank & Trust Co.

  USD   490   NZD   721    12/15/2021    2,232 

State Street Bank & Trust Co.

  USD   454   PLN   1,897    12/07/2021    7,536 

State Street Bank & Trust Co.

  USD   114   NOK   993    12/15/2021    (4,453

State Street Bank & Trust Co.

  USD   189   NOK   1,618    01/20/2022    (10,251

State Street Bank & Trust Co.

  USD   665   MXN   14,222    01/13/2022    (7,480

State Street Bank & Trust Co.

  USD   707   CZK   15,732    12/07/2021    (7,488

State Street Bank & Trust Co.

  USD   408   JPY   46,618    12/15/2021    4,405 

State Street Bank & Trust Co.

  USD   714   THB   23,702    12/09/2021    (10,600

State Street Bank & Trust Co.

  USD   187   HUF   61,212    12/07/2021    3,601 

UBS AG

  RUB   37,684   USD   501    12/15/2021    (5,865

UBS AG

  RUB   20,586   USD   279    12/15/2021    1,535 

UBS AG

  BRL   8,917   USD   1,591    12/02/2021    5,330 

UBS AG

  TWD   4,344   USD   157    01/20/2022    (1,006

UBS AG

  NZD   3,879   USD   2,713    12/15/2021    65,455 

UBS AG

  CHF   2,339   USD   2,515    12/15/2021    (33,503

UBS AG

  USD   1,580   BRL   8,917    01/04/2022    (4,928

UBS AG

  USD   1,587   BRL   8,917    12/02/2021    (550
            

 

 

 
  $  114,318 
  

 

 

 

 

36    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

CENTRALLY CLEARED CREDIT DEFAULT SWAPS (see Note D)

 

Description Fixed
Rate
(Pay)
Receive
  Payment
Frequency
  Implied
Credit
Spread at
November 30,
2021
  

Notional
Amount
(000)

  Market
Value
  

Upfront
Premiums

Paid/

(Received)

  Unrealized
Appreciation/
(Depreciation)
 

Buy Contracts

 

CDX-NAHY Series 37, 5 Year Index, 12/20/2026*

  (5.00)%   Quarterly   3.30 USD  1,000  $(85,539 $(82,048 $(3,491

iTraxx Xover Series 36, 5 Year Index, 12/20/2026*

  (5.00  Quarterly   2.87  EUR  230   (27,974  (24,712  (3,262

Sale Contracts

 

CDX-NAHY Series 36, 5 Year Index, 06/20/2026*

  5.00   Quarterly   3.13  USD  13,180   1,134,864   1,154,509   (19,645

CDX-NAHY Series 37, 5 Year Index, 12/20/2026*

  5.00   Quarterly   3.30  USD  640   54,773   58,906   (4,133

iTraxx Xover Series 35, 5 Year Index, 06/20/2026*

  5.00   Quarterly   2.66  EUR  2,740   336,989   350,471   (13,482

iTraxx Xover Series 36, 5 Year Index, 12/20/2026*

  5.00   Quarterly   2.87  EUR  220   26,752   29,211   (2,459
      

 

 

  

 

 

  

 

 

 
      $ 1,439,865  $ 1,486,337  $ (46,472
      

 

 

  

 

 

  

 

 

 

 

*

Termination date

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)

 

     Rate Type           

Notional
Amount

(000)

 Termination
Date
  Payments
made
by the
Fund
 Payments
received
by the
Fund
 Payment
Frequency
Paid/Received
 Market
Value
  Upfront
Premiums
Paid/
(Received)
  Unrealized
Appreciation/
(Depreciation)
 

USD     1,050

  01/10/2022  3 Month
LIBOR
 1.941% Quarterly/

Semi-Annual

 $9,919  $  – 0 – $  9,919 

CNY        740

  02/17/2025  China
7-Day
Reverse
Repo
Rate
 2.547% Quarterly  652   – 0 –  652 

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    37


 

PORTFOLIO OF INVESTMENTS (continued)

 

     Rate Type           

Notional
Amount

(000)

 Termination
Date
  Payments
made
by the
Fund
 Payments
received
by the
Fund
 Payment
Frequency
Paid/Received
 Market
Value
  Upfront
Premiums
Paid/
(Received)
  Unrealized
Appreciation/
(Depreciation)
 

CNY     2,204

  02/20/2025  China
7-Day
Reverse
Repo
Rate
 2.598% Quarterly $2,465  $  – 0 – $2,465 

CNY     2,236

  02/21/2025  China
7-Day
Reverse
Repo
Rate
 2.620% Quarterly  2,740   – 0 –  2,740 

EUR           10

  09/12/2029  6 Month
EURIBOR
 (0.157)% Semi-
Annual/
Annual
  (145  – 0 –  (145

EUR         180

  11/18/2029  6 Month
EURIBOR
 0.073% Semi-
Annual/
Annual
  835   – 0 –  835 

EUR         220

  01/23/2030  6 Month
EURIBOR
 0.131% Semi-
Annual/
Annual
  2,757   – 0 –  2,757 

USD           80

  02/12/2030  3 Month
LIBOR
 1.495% Quarterly/
Semi-Annual
  619   – 0 –  619 

USD         670

  06/10/2030  3 Month
LIBOR
 0.865% Quarterly/
Semi-Annual
  (30,050  – 0 –  (30,050

EUR         430

  06/11/2030  6 Month
EURIBOR
 (0.045)% Semi-
Annual/
Annual
  (3,028  3   (3,031

EUR           60

  06/19/2030  6 Month
EURIBOR
 (0.119)% Semi-
Annual/
Annual
  (904  (3  (901

USD           40

  06/19/2030  3 Month
LIBOR
 0.725% Quarterly/
Semi-Annual
  (2,294  – 0 –  (2,294

USD         760

  08/04/2030  3 Month
LIBOR
 0.536% Quarterly/
Semi-Annual
  (57,424  – 0 –  (57,424

EUR         520

  08/05/2030  6 Month
EURIBOR
 (0.232)% Semi-Annual/

Annual

  (14,708  – 0 –   (14,708

USD         320

  08/20/2030  3 Month
LIBOR
 0.645% Quarterly/
Semi-Annual
  (21,401  – 0 –   (21,401

USD      1,510

  10/21/2030  3 Month
LIBOR
 0.794% Quarterly/
Semi-Annual
  (86,072  – 0 –   (86,072

EUR         600

  10/22/2030  6 Month
EURIBOR
 (0.280)% Semi-
Annual/
Annual
  (21,496  – 0 –   (21,496

USD         480

  11/12/2030  3 Month
LIBOR
 0.938% Quarterly/
Semi-Annual
  (21,892  – 0 –   (21,892

EUR         190

  11/12/2030  6 Month
EURIBOR
 (0.169)% Semi-
Annual/
Annual
  (4,766  – 0 –   (4,766

USD         490

  05/11/2031  3 Month
LIBOR
 1.560% Quarterly/
Semi-Annual
  3,322   – 0 –   3,322 

 

38    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

     Rate Type           

Notional
Amount

(000)

 Termination
Date
  Payments
made
by the
Fund
 Payments
received
by the
Fund
 Payment
Frequency
Paid/Received
 Market
Value
  Upfront
Premiums
Paid/
(Received)
  Unrealized
Appreciation/
(Depreciation)
 

EUR        490

  05/11/2031  6 Month
EURIBOR
 0.115% Semi-Annual/

Annual

 $1,168  $1  $1,167 

USD        200

  08/18/2031  3 Month
LIBOR
 1.262% Quarterly/
Semi-Annual
  (3,685  – 0 –   (3,685

GBP        920

  08/19/2031  1 Day
SONIA
 0.539% Annual  (29,655  – 0 –   (29,655

CAD        550

  08/19/2031  3 month
CDOR
 1.595% Semi-Annual  (14,905  – 0 –   (14,905

EUR        150

  08/19/2031  6 Month
EURIBOR
 (0.116)% Semi-
Annual/
Annual
  (3,665  – 0 –   (3,665

USD     5,570

  08/23/2031  3 Month
LIBOR
 1.255% Quarterly/
Semi-Annual
  (107,969  – 0 –   (107,969

AUD     1,240

  08/23/2031  6 Month
BBSW
 1.207% Semi-Annual  (61,836  – 0 –   (61,836

JPY  440,350

  08/27/2031  1 Day
TONAR
 (0.015)% Annual  (20,018  (3,369  (16,649

AUD        100

  08/27/2031  6 Month
BBSW
 1.345% Semi-Annual  (4,082  – 0 –   (4,082

CHF        670

  09/14/2031  1 Day
SARON
 (0.085)% Annual  (4,507  2,318   (6,825

SEK         930

  10/04/2031  3 Month
STIBOR
 0.888% Quarterly/
Annual
  704   – 0 –   704 

NZD         230

  10/04/2031  3 Month
BKBM
 2.265% Quarterly/
Semi-Annual
  (5,227  – 0 –   (5,227

AUD         330

  10/05/2031  6 Month
BBSW
 1.640% Semi-Annual  (7,584  – 0 –   (7,584

SEK      1,550

  10/06/2031  3 Month
STIBOR
 0.888% Quarterly/
Annual
  1,167   – 0 –   1,167 

NZD         290

  10/06/2031  3 Month
BKBM
 2.198% Quarterly/
Semi-Annual
  (7,796  – 0 –   (7,796

CHF           90

  10/06/2031  1 Day
SARON
 0.021% Annual  378   – 0 –   378 

CAD         620

  10/19/2031  2.065% 3 month
CDOR
 Semi-Annual  (2,860  – 0 –   (2,860

GBP         530

  10/19/2031  1.052% 1 Day
SONIA
 Annual  (16,779  – 0 –   (16,779

AUD        460

  10/20/2031  6 Month
BBSW
 1.870% Semi-Annual  (3,935  – 0 –   (3,935

NOK     5,560

  10/21/2031  1.983% 6 Month
NIBOR
 Annual/
Semi-Annual
  (16,411  – 0 –   (16,411

EUR         260

  10/21/2031  6 Month
EURIBOR
 0.274% Semi-
Annual/
Annual
  4,664   – 0 –   4,664 

USD        105

  11/02/2031  1.561% 3 Month
LIBOR
 Semi-
Annual/
Quarterly
  (649  – 0 –   (649

USD        315

  11/03/2031  1.579% 3 Month
LIBOR
 Semi-
Annual/
Quarterly
  (2,466  123   (2,589

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    39


 

PORTFOLIO OF INVESTMENTS (continued)

 

    Rate Type            

Notional
Amount

(000)

 Termination
Date
 Payments
made
by the
Fund
 Payments
received
by the
Fund
 Payment
Frequency
Paid/Received
  Market
Value
  Upfront
Premiums
Paid/
(Received)
  Unrealized
Appreciation/
(Depreciation)
 

JPY    34,220

 11/09/2031 1 Day
TONAR
 0.048%  Annual  $172  $– 0 –  $172 

USD        110

 11/09/2031 1.516% 3 Month
LIBOR
  

Semi-
Annual/
Quarterly


 
  (176  – 0 –   (176

USD        490

 11/17/2031 3 Month
LIBOR
 1.664%  

Quarterly/
Semi-
Annual


 
  7,438   – 0 –   7,438 

USD        430

 11/17/2031 3 Month
LIBOR
 1.690%  

Quarterly/
Semi-
Annual


 
  6,358   – 0 –   6,358 

AUD        130

 11/17/2031 6 Month
BBSW
 2.100%  
Semi-
Annual

 
  685   – 0 –   685 

JPY    24,300

 11/18/2031 1 Day
TONAR
 0.068%  Annual   539   – 0 –   539 

EUR         330

 11/18/2031 6 Month
EURIBOR
 0.174%  

Semi-
Annual/
Annual


 
  1,824   – 0 –   1,824 

CHF           60

 11/19/2031 1 Day
SARON
 0.100%  Annual   693   – 0 –   693 

USD         220

 08/21/2045 3 Month
LIBOR
 2.630%  

Quarterly/
Semi-
Annual


 
  43,759   – 0 –   43,759 

USD           70

 09/04/2045 3 Month
LIBOR
 2.708%  

Quarterly/
Semi-
Annual


 
  14,980   – 0 –   14,980 
     

 

 

  

 

 

  

 

 

 
  $ (470,547 $ (927 $ (469,620
  

 

 

  

 

 

  

 

 

 

TOTAL RETURN SWAPS (see Note D)

 

Counterparty &
Referenced
Obligation
  Rate
Paid/
Received
  Payment
Frequency
   Current
Notional
(000)
   Maturity
Date
   Unrealized
Appreciation/
(Depreciation)
 

Receive Total Return on Reference Obligation

 

JPMorgan Chase Bank, NA

 

JPABSAA1(1)

   0.14  Maturity    USD    4,594    12/31/2021   $– 0 – 

Morgan Stanley Capital Services LLC

 

KOSPI 200 Futures

   0.00  Monthly    KRW    186,675    12/09/2021    (6,501

KOSPI 200 Futures

   0.00  Monthly    KRW    186,675    12/09/2021    (7,827

KOSPI 200 Futures

   0.00  Monthly    KRW    186,675    12/09/2021    (9,070

KOSPI 200 Futures

   0.00  Monthly    KRW    186,675    12/09/2021    (15,490

KOSPI 200 Futures

   0.00  Monthly    KRW    466,688    12/09/2021        (27,268

RTS Futures

   0.00  Monthly    USD    99    12/16/2021    (70

RTS Futures

   0.00  Monthly    USD    178    12/16/2021    (24,526

 

40    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

PORTFOLIO OF INVESTMENTS (continued)

 

Counterparty &
Referenced
Obligation
  Rate
Paid/
Received
  Payment
Frequency
   Current
Notional
(000)
   Maturity
Date
   Unrealized
Appreciation/
(Depreciation)
 

RTS Futures

   0.00  Monthly    USD    280    12/16/2021   $(35,200

Swiss Market Index Futures

   0.00  Monthly    CHF    364    12/17/2021    (7,447

Pay Total Return on Reference Obligation

 

Morgan Stanley Capital Services LLC

 

IBOVESPA Futures

   0.00  Monthly    BRL    1,026    12/15/2021    6,938 

IBOVESPA Futures

   0.00  Monthly    BRL    410    12/15/2021    163 
           

 

 

 
           $    (126,298
           

 

 

 

 

(a)

Non-income producing security.

 

(b)

Represents entire or partial securities out on loan. See Note E for securities lending information.

 

(c)

Position, or a portion thereof, has been segregated to collateralize margin requirements for open futures contracts.

 

(d)

Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration. At November 30, 2021, the aggregate market value of these securities amounted to $2,244,508 or 2.4% of net assets.

 

(e)

To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

 

(f)

Affiliated investments.

 

(g)

Defaulted.

 

(h)

The rate shown represents the 7-day yield as of period end.

Currency Abbreviations:

AUD – Australian Dollar

BRL – Brazilian Real

CAD – Canadian Dollar

CHF – Swiss Franc

CLP – Chilean Peso

CNY – Chinese Yuan Renminbi

COP – Colombian Peso

CZK – Czech Koruna

EUR – Euro

GBP – Great British Pound

HUF – Hungarian Forint

IDR – Indonesian Rupiah

INR – Indian Rupee

JPY – Japanese Yen

KRW – South Korean Won

MXN – Mexican Peso

MYR – Malaysian Ringgit

NOK – Norwegian Krone

NZD – New Zealand Dollar

PEN – Peruvian Sol

PHP – Philippine Peso

PLN – Polish Zloty

RUB – Russian Ruble

SEK – Swedish Krona

THB – Thailand Baht

TWD – New Taiwan Dollar

USD – United States Dollar

ZAR – South African Rand

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    41


 

PORTFOLIO OF INVESTMENTS (continued)

 

Glossary:

ADR – American Depositary Receipt

BBSW – Bank Bill Swap Reference Rate (Australia)

BIST – Borsa Istanbul Stock Exchange

BKBM – Bank Bill Benchmark (New Zealand)

CBT – Chicago Board of Trade

CDOR – Canadian Dealer Offered Rate

CDX-NAHY – North American High Yield Credit Default Swap Index

ETS – Emission Trading Scheme

EURIBOR – Euro Interbank Offered Rate

FTSE – Financial Times Stock Exchange

GDR – Global Depositary Receipt

ICE – Intercontinental Exchange

KLCI – Kuala Lumpur Composite Index

KOSPI – Korea Composite Stock Price Index

LIBOR – London Interbank Offered Rate

MSCI – Morgan Stanley Capital International

NIBOR – Norwegian Interbank Offered Rate

PJSC – Public Joint Stock Company

REIT – Real Estate Investment Trust

RTS – Russian Trading System

SARON – Swiss Average Rate Overnight

SET – Stock Exchange of Thailand

SGX – Singapore Exchange

SONIA – Sterling Overnight Index Average

STIBOR – Stockholm Interbank Offered Rate

TONAR – Tokyo Overnight Average Rate

TOPIX – Tokyo Price Index

TSX – Toronto Stock Exchange

WIG – Warszawski Indeks Gieldowy

 

(1)

The following table represents the 50 largest (long/(short)) equity basket holdings underlying the total return swap in JPABSAA1 as of November 30, 2021.

 

Security Description  Shares  Current
Notional
  Percent of
Basket’s Value
 

S&P 500 Total Return Index

   (261 USD (2,496,995  (54.4)% 

MSCI Daily TR Gross EAFE Index

   (112  (1,114,818  (24.3)% 

JPMorgan Cash Index

   (2,739  (835,108  (18.2)% 

Microsoft Corp.

   706   233,394   5.1

Alphabet, Inc.

   55   156,649   3.4

AutoZone, Inc.

   64   116,923   2.5

Apple, Inc.

   702   116,020   2.5

MSCI Daily TR Gross Canada Index

   (11  (114,766  (2.5)% 

Roche Holding AG

   272   105,637   2.3

Oracle Corp.

   1,124   102,025   2.2

Paychex, Inc.

   829   98,865   2.2

UnitedHealth Group, Inc.

   208   92,545   2.0

Novo Nordisk A/S

   800   85,322   1.9

Amazon.com, Inc.

   24   83,968   1.8

Koninklijke Ahold Delhaize

   2,421   80,808   1.8

Royal Bank of Canada

   793   78,099   1.7

S&P Global, Inc.

   171   78,099   1.7

RELX PLC

   2,488   76,745   1.7

Walmart, Inc.

   536   75,390   1.6

Home Depot, Inc. (The)

   185   74,036   1.6

 

42    |    AB ALL MARKET INCOME PORTFOLIO

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PORTFOLIO OF INVESTMENTS (continued)

 

Security Description  Shares   Current
Notional
   Percent of
Basket’s Value
 

Meta Platforms Inc.

   223   USD72,230    1.6

Constellation Software, Inc. (Canada)

   42    71,779    1.6

Capgemini SE

   285    65,459    1.4

Procter & Gamble Co. (The)

   440    63,653    1.4

Salmar ASA

   1,004    63,202    1.4

Partners Group Holding AG

   37    63,202    1.4

JPMorgan Chase & Co.

   395    62,750    1.4

Swedish Match AB

   8,522    61,847    1.3

Royal Dutch Shell PLC

   28    59,139    1.3

Wolters Kluwer NV

   529    59,139    1.3

Visa, Inc.

   301    58,236    1.3

Merck & Co., Inc.

   723    54,173    1.2

Adobe Inc.

   80    53,721    1.2

Deckers Outdoor Corp.

   133    53,721    1.2

Nippon Telegraph & Telephone Co.

   1,936    53,270    1.2

CME Group, Inc.

   231    51,013    1.1

Bank Leumi Le-Israel

   53    51,013    1.1

Thermo Fisher Scientific Inc.

   79    50,110    1.1

Toronto-Dominion Bank (The)

   687    48,304    1.1

Booz Allen Hamilton Holding Co.

   559    46,950    1.0

NextEra Energy Inc.

   536    46,498    1.0

Anthem, Inc.

   112    45,595    1.0

Assa Abloy

   1,630    45,595    1.0

Progressive Corp.

   486    45,144    1.0

Broadcom Inc.

   82    45,144    1.0

DBS Group Holdings Ltd.

   2,052    44,693    1.0

Sony Group Corp.

   356    43,338    0.9

Electronic Arts Inc.

   338    41,984    0.9

NortonLifeLock Inc.

   1,635    40,630    0.9

Oracle Corp. (Japan)

   413    40,630    0.9

Other Long

   28,465    1,259,064    27.4

See notes to financial statements.

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    43


 

STATEMENT OF ASSETS & LIABILITIES

November 30, 2021

 

Assets

 

Investments in securities, at value

 

Unaffiliated issuers (cost $46,952,723)

  $    48,658,612(a) 

Affiliated issuers (cost $42,493,047—including investment of cash collateral for securities loaned of $726,871)

   42,372,198 

Cash collateral due from broker

   2,155,517 

Foreign currencies, at value (cost $3,014,510)

   2,992,250 

Receivable for investment securities sold and foreign currency transactions

   695,342 

Unrealized appreciation on forward currency exchange contracts

   663,324 

Unaffiliated dividends and interest receivable

   163,227 

Receivable for terminated centrally cleared credit default swaps

   116,544 

Receivable for capital stock sold

   99,121 

Affiliated dividends receivable

   79,069 

Receivable for variation margin on centrally cleared swaps

   26,811 

Unrealized appreciation on total return swaps

   7,101 
  

 

 

 

Total assets

   98,029,116 
  

 

 

 
Liabilities

 

Due to custodian

   160,748 

Cash collateral due to broker

   1,700,000 

Payable for investment securities purchased and foreign currency transactions

   1,173,187 

Payable for collateral received on securities loaned

   726,871 

Unrealized depreciation on forward currency exchange contracts

   549,006 

Unrealized depreciation on total return swaps

   133,399 

Payable for variation margin on futures

   130,236 

Payable for terminated centrally cleared credit default swaps

   116,394 

Payable for capital stock redeemed

   83,352 

Payable for terminated total return swaps

   46,851 

Foreign capital gains tax payable

   6,467 

Directors’ fees payable

   4,852 

Distribution fee payable

   2,481 

Transfer Agent fee payable

   1,405 

Advisory fee payable

   1,103 

Accrued expenses

   312,147 
  

 

 

 

Total liabilities

   5,148,499 
  

 

 

 

Net Assets

  $92,880,617 
  

 

 

 
Composition of Net Assets

 

Capital stock, at par

  $991 

Additional paid-in capital

   102,835,359 

Accumulated loss

   (9,955,733
  

 

 

 

Net Assets

  $92,880,617 
  

 

 

 

See notes to financial statements.

 

44    |    AB ALL MARKET INCOME PORTFOLIO

 abfunds.com


 

STATEMENT OF ASSETS & LIABILITIES (continued)

 

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value

 

Class Net Assets     Shares
Outstanding
     Net Asset
Value
 

 

 
A $9,897,252      1,057,407     $9.36

 

 
C $486,127      51,892     $9.37 

 

 
Advisor $  82,497,238      8,801,040     $  9.37 

 

 

 

(a)

Includes securities on loan with a value of $1,185,887 (see Note E).

 

*

The maximum offering price per share for Class A shares was $9.78 which reflects a sales charge of 4.25%.

See notes to financial statements.

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    45


 

STATEMENT OF OPERATIONS

Year Ended November 30, 2021

 

Investment Income

 

Dividends

 

Affiliated issuers

   1,473,368  

Unaffiliated issuers (net of foreign taxes withheld of $56,229)

   1,196,011  

Interest (net of foreign taxes withheld of $2,933)

   218,614  

Securities lending income

   18,192  $2,906,185 
  

 

 

  
Expenses

 

Advisory fee (see Note B)

   504,114  

Distribution fee—Class A

   20,702  

Distribution fee—Class C

   5,958  

Transfer agency—Class A

   3,680  

Transfer agency—Class C

   290  

Transfer agency—Advisor Class

   36,504  

Custody and accounting

   208,320  

Audit and tax

   137,139  

Administrative

   95,875  

Registration fees

   56,633  

Legal

   41,214  

Printing

   21,980  

Directors’ fees

   19,626  

Miscellaneous

   31,082  
  

 

 

  

Total expenses

   1,183,117  

Less: expenses waived and reimbursed by the Adviser (see Notes B & E)

   (610,251 
  

 

 

  

Net expenses

    572,866 
 

 

 

 

Net investment income

    2,333,319 
 

 

 

 
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions   

Net realized gain (loss) on:

 

Affiliated Underlying Portfolios

    (631,797

Investment transactions(a)

    5,516,521 

Forward currency exchange contracts

    323,715 

Futures

    (137,958

Options written

    144,376 

Swaps

    421,919 

Foreign currency transactions

    143,453 

Net change in unrealized appreciation/depreciation of:

   

Affiliated Underlying Portfolios

    998,339 

Investments(b)

    (1,491,999

Forward currency exchange contracts

    98,653 

Futures

    (160,441

Swaps

    (1,079,608

Foreign currency denominated assets and liabilities

    (91,397
   

 

 

 

Net gain on investment and foreign currency transactions

    4,053,776 
   

 

 

 

Contributions from Affiliates (see Note B)

    70 
   

 

 

 

Net Increase in Net Assets from Operations

   $    6,387,165 
 

 

 

 

 

(a)

Net of foreign realized capital gains taxes of $849.

 

(b)

Net of decrease in accrued foreign capital gains taxes on unrealized gains of $952.

See notes to financial statements.

 

46    |    AB ALL MARKET INCOME PORTFOLIO

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STATEMENT OF CHANGES IN NET ASSETS

 

   Year Ended
November 30,
2021
  Year Ended
November 30,
2020
 
Increase (Decrease) in Net Assets from Operations   

Net investment income

  $2,333,319  $2,976,616 

Net realized gain (loss) on investment and foreign currency transactions

   5,780,229   (10,802,418

Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities

   (1,726,453  1,339,194 

Contributions from Affiliates (see Note B)

   70   – 0 – 
  

 

 

  

 

 

 

Net increase (decrease) in net assets from operations

   6,387,165   (6,486,608

Distributions to Shareholders

 

Class A

   (268,120  (286,500

Class C

   (15,088  (33,929

Advisor Class

   (2,855,141  (4,028,729

Return of Capital

 

Class A

   (44,170  – 0 – 

Class C

   (2,486  – 0 – 

Advisor Class

   (470,354  – 0 – 
Capital Stock Transactions

 

Net decrease

   (4,103,075  (3,051,229
  

 

 

  

 

 

 

Total decrease

   (1,371,269  (13,886,995
Net Assets

 

Beginning of period

   94,251,886       108,138,881 
  

 

 

  

 

 

 

End of period

  $    92,880,617  $94,251,886 
  

 

 

  

 

 

 

See notes to financial statements.

 

abfunds.com 

AB ALL MARKET INCOME PORTFOLIO    |    47


 

NOTES TO FINANCIAL STATEMENTS

November 30, 2021

 

NOTE A

Significant Accounting Policies

AB Cap Fund, Inc. (the “Company”) is registered under the Investment Company Act of 1940 as an open-end management investment company. The Company, which is a Maryland corporation, operates as a series company comprised of 12 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB All Market Income Portfolio (the “Fund”), a diversified portfolio. The Fund has authorized the issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1 and Class 2 shares. Class B, Class R, Class K, Class I, Class Z, Class T, Class 1 and Class 2 shares have not been issued. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase, and 0% after the first year of purchase. Effective May 31, 2021, Class C shares automatically converted to Class A shares eight years after the end of the calendar month of purchase. Prior to May 31, 2021, Class C shares automatically converted to Class A shares ten years after the end of the calendar month of purchase. Advisor Class shares are sold without any initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Company’s Board of Directors (the “Board”).

 

48    |    AB ALL MARKET INCOME PORTFOLIO

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NOTES TO FINANCIAL STATEMENTS (continued)

 

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, AllianceBernstein L.P. (the “Adviser”) will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open-end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this

 

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determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the 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 and may materially affect the value of those securities. To account for this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

  

Level 1—quoted prices in active markets for identical investments

  

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

  

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and

 

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other unique security features in order to estimate the relevant cash flows which are then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3.

Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation.

Options are valued using market-based inputs to models, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency, where such inputs and models are available. Alternatively, the values may be obtained through unobservable management determined inputs and/or management’s proprietary models. Where models are used, the selection of a particular model to value an option depends upon the contractual terms of, and specific risks inherent in, the option as well as the availability of pricing information in the market. Valuation models require a variety of inputs, including contractual terms, market prices, measures of volatility and correlations of such inputs. Exchange traded options generally will be classified as Level 2. For options that do not trade on an exchange but trade in liquid markets, inputs can generally be verified and model selection does not involve significant management judgment. Options are classified within Level 2 on the fair value hierarchy when all of the significant inputs can be corroborated to market evidence. Otherwise such instruments are classified as Level 3.

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of November 30, 2021:

 

Investments in
Securities:

  Level 1   Level 2   Level 3  Total 

Assets:

       

Common Stocks:

       

Information Technology

  $7,905,549   $644,375   $  – 0 –  $8,549,924 

Financials

   2,504,878    2,238,420    – 0 –   4,743,298 

Health Care

   3,324,705    999,247    – 0 –   4,323,952 

Consumer Discretionary

   2,900,291    977,551    – 0 –   3,877,842 

 

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Investments in
Securities:

  Level 1  Level 2  Level 3  Total 

Communication Services

  $2,230,001  $600,934  $– 0 –  $2,830,935 

Industrials

   1,540,157   664,461   – 0 –   2,204,618 

Energy

   920,575   544,033   – 0 –   1,464,608 

Real Estate

   1,266,090   191,072   – 0 –   1,457,162 

Materials

   475,994   769,706   – 0 –   1,245,700 

Consumer Staples

   753,622   309,908   – 0 –   1,063,530 

Utilities

   449,473   190,940   – 0 –   640,413 

Investment Companies

   15,120,449   – 0 –   – 0 –   15,120,449 

Preferred Stocks

   6,578,101   – 0 –   – 0 –   6,578,101 

Emerging Markets – Sovereigns

   – 0 –   2,251,201   – 0 –   2,251,201 

Options Purchased – Puts

   – 0 –   1,867,825   – 0 –   1,867,825 

Governments – Treasuries

   – 0 –   586,744   – 0 –   586,744 

Emerging Markets – Treasuries

   – 0 –   270,472   – 0 –   270,472 

Quasi-Sovereigns

   – 0 –   127,317   – 0 –   127,317 

Short-Term Investments:

     

Investment Companies

   26,524,878   – 0 –   – 0 –   26,524,878 

U.S. Treasury Bills

   – 0 –   4,574,970   – 0 –   4,574,970 

Investments of Cash Collateral for Securities Loaned in Affiliated Money Market Fund

   726,871   – 0 –   – 0 –   726,871 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total Investments in Securities

   73,221,634   17,809,176   – 0 –   91,030,810 

Other Financial Instruments(a):

     

Assets:

     

Futures

   167,820   – 0 –   – 0 –   167,820(b) 

Forward Currency Exchange Contracts

   – 0 –   663,324   – 0 –   663,324 

Centrally Cleared Credit Default Swaps

   – 0 –   1,553,378   – 0 –   1,553,378(b) 

Centrally Cleared Interest Rate Swaps

   – 0 –   107,838   – 0 –   107,838(b) 

Total Return Swaps

   – 0 –   7,101   – 0 –   7,101 

Liabilities:

     

Futures

   (482,937  – 0 –   – 0 –   (482,937)(b) 

Forward Currency Exchange Contracts

   – 0 –   (549,006  – 0 –   (549,006

Centrally Cleared Credit Default Swaps

   – 0 –   (113,513  – 0 –   (113,513)(b) 

Centrally Cleared Interest Rate Swaps

   – 0 –   (578,385  – 0 –   (578,385)(b) 

Total Return Swaps

   – 0 –   (133,399  – 0 –   (133,399
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $72,906,517  $  18,766,514  $  – 0 –  $91,673,031 
  

 

 

  

 

 

  

 

 

  

 

 

 

 

(a)

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/(depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, options written and swaptions written which are valued at market value.

 

(b)

Only variation margin receivable/(payable) at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments. Where applicable, centrally cleared swaps with upfront premiums are presented here at market value.

 

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3. Currency Translation

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

Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of foreign currency denominated assets and liabilities.

4. Taxes

It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as

 

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adjustments to interest income. The Fund accounts for distributions received from REIT investments or from regulated investment companies as dividend income, realized gain, or return of capital based on information provided by the REIT or the investment company.

6. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.

7. Dividends and Distributions

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .55% of the first $2.5 billion, .45% for the next $2.5 billion and .40% in excess of $5 billion, of the Fund’s average daily net assets. The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses (excluding acquired fund fees and expenses, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs) on an annual basis (the “Expense Caps”) to .99%, 1.74% and .74% of daily average net assets for Class A, Class C, and Advisor Class shares, respectively. For the year ended November 30, 2021, such reimbursements/waivers amounted to $381,586. The Expense Caps may not be terminated by the Adviser before February 28, 2022.

Pursuant to the investment advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended November 30, 2021, the Adviser voluntarily agreed to waive such fees in the amount of $95,875.

 

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The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $17,923 for the year ended November 30, 2021.

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has retained front-end sales charges of $165 from the sale of Class A shares and received $37 and $0 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A and Class C shares, respectively, for the year ended November 30, 2021.

The Fund may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2022. In connection with the investment by the Fund in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Fund in an amount equal to the Fund’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. For the year ended November 30, 2021, such waiver amounted to $10,380.

The Fund currently invests in AB High Income Fund, Inc. (“ABHI”), an open-end management investment company managed by the Adviser. The Adviser has contractually agreed to waive its management fees and/or bear Fund expenses through February 28, 2022 in an amount equal to the Fund’s proportionate share of all advisory fees and other expenses of ABHI that are indirectly borne by the Fund. For the year ended November 30, 2021, such waiver amounted to $122,401.

 

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A summary of the Fund’s transactions in AB mutual funds for the year ended November 30, 2021 is as follows:

 

   Distributions 
Fund Market
Value
11/30/20
(000)
  Purchases
at Cost
(000)
  Sales
Proceeds
(000)
  Realized
Gain
(Loss)
(000)
  Change in
Unrealized
Appr./
(Depr.)
(000)
  Market
Value
11/30/21
(000)
  Dividend
Income
(000)
  Realized
Gains
(000)
 

Government Money Market Portfolio

 $  13,316  $  105,837  $  92,628  $– 0 –  $– 0 –  $26,525  $2  $  – 0 – 

AB High Income Fund, Inc.

  35,037   2,678   22,961   (632  998   15,120   1,471   – 0 – 

Government Money Market Portfolio*

  537   10,693   10,503   – 0 –   – 0 –   727   0**   – 0 – 
    

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total

    $  (632 $  998  $  42,372  $  1,473  $– 0 – 
    

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

*

Investments of cash collateral for securities lending transactions (see Note E).

 

**

Amount is less than $500.

During the year ended November 30, 2021, the Adviser reimbursed the Fund $70 for trading losses incurred due to a trade entry error.

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .25% of the Fund’s average daily net assets attributable to Class A shares, 1% of the Fund’s average daily net assets attributable to Class C shares. There are no distribution and servicing fees on the Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Since the commencement of the Fund’s operations, the Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amount of $2,770 for Class C shares. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund’s shares.

 

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NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended November 30, 2021 were as follows:

 

   Purchases  Sales 

Investment securities (excluding U.S. government securities)

  $    57,054,443  $    82,158,663 

U.S. government securities

   – 0