Document/Exhibit Description Pages Size
1: 485APOS Post-Effective Amendment 319± 1.23M
5: COVER ¶ Comment-Response or Cover Letter to the SEC 2± 2K
4: EX-99 Power of Attorney 8 39K
2: EX-99.A Miscellaneous Exhibit 9± 36K
3: EX-99.B Miscellaneous Exhibit 20± 90K
As filed with the Securities and Exchange
Commission on August 30, 2006
File Nos. 333-85164
811-21064
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 6 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 8 X
AllianceBernstein Global Research Growth Fund, Inc.
1345 Avenue of the Americas, New York, New York 10105
(800) 221-5672
MARK R. MANLEY
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Copies of Communications to:
Patricia A. Poglinco
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
It is proposed that this filing will become effective (check appropriate
box)
[_] immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
AllianceBernstein Investments [LOGO]
--------------------------------------------------------------------------------
The AllianceBernstein Growth Funds
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PROSPECTUS November 1, 2006
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The AllianceBernstein Growth Funds Domestic Growth Funds
provide a broad selection of investment
alternatives to investors seeking capital > AllianceBernstein Large Cap
growth or high total return. Growth Fund
> AllianceBernstein Growth Fund
> AllianceBernstein Mid-Cap
Growth Fund
> AllianceBernstein Small Cap
Growth Portfolio
Global Growth Funds
> AllianceBernstein Global
Technology Fund
> AllianceBernstein Global
Health Care Fund
> AllianceBernstein Global
Research Growth Fund
> AllianceBernstein
International Research
Growth Fund
> AllianceBernstein
International Growth Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any representation to
the contrary is a criminal offense.
Investment Products Offered
o Are not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Page
SUMMARY INFORMATION...........................................................4
DOMESTIC GROWTH FUNDS.........................................................6
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND.......................................6
ALLIANCEBERNSTEIN GROWTH FUND.................................................9
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND........................................11
ALLIANCEBERNSTEIN SMALL CAP GROWTH PORTFOLIO.................................13
GLOBAL GROWTH FUNDS..........................................................16
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND.....................................16
ALLIANCEBERNSTEIN GLOBAL HEALTH CARE FUND....................................20
ALLIANCEBERNSTEIN GLOBAL RESEARCH GROWTH FUND................................23
ALLIANCEBERNSTEIN INTERNATIONAL RESEARCH GROWTH FUND.........................26
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND..................................30
RISKS SUMMARY................................................................33
FEES AND EXPENSES OF THE FUNDS...............................................35
INVESTING IN THE FUNDS.......................................................41
How to Buy Shares.........................................................41
The Different Share Class Expenses........................................43
Sales Charge Reduction programs...........................................44
CDCS Waivers and Other Programs...........................................47
The "Pros" and "Cons" of Different Share Classes..........................47
Payments to Financial Advisors and Their Firms............................48
How to Exchange Shares....................................................51
How to Sell or Redeem Shares..............................................51
Frequent Purchases and Redemptions of Fund Shares.........................52
How the Funds Value Their Shares..........................................54
MORE INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS.......................56
MANAGEMENT OF THE FUNDS......................................................66
DIVIDENDS, DISTRIBUTIONS AND TAXES...........................................79
CONVERSION FEATURE...........................................................81
GENERAL INFORMATION..........................................................81
GLOSSARY OF INVESTMENT TERMS.................................................82
FINANCIAL HIGHLIGHTS.........................................................83
APPENDIX A - HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION.................97
SUMMARY INFORMATION
This prospectus begins with a summary of key information about each of the
AllianceBernstein(R) Growth Funds. The Summary describes a Fund's objective,
investment strategies, principal risks, and fees. You will find additional
information about the Funds and their investments beginning on page [___].
Performance Information
-----------------------
This Summary includes a table for each Fund showing its average annual returns
and a bar chart showing its annual returns. The table and bar chart provide an
indication of the historical risk of an investment in each Fund by showing:
o how the Fund's average annual returns for one, five and ten years (or
over the life of the Fund) compare to those of a broad based
securities market index; and
o how the Fund's performance changed from year to year over the life of
the Fund.
---------------------------------------------------------------------------
PLEASE NOTE
A Fund's past performance before and after taxes, of
course, does not necessarily indicate how it will
perform in the future.
As with all investments, you may lose money by investing
in the Fund.
---------------------------------------------------------------------------
Risk
----
---------------------------------------------------------------------------
WHY IS RISK IMPORTANT?
You should consider risk carefully when investing in a Fund. You could put
your money in investments that have very little risk (for example,
certificates of deposit issued by a bank), but these investments would
typically have a lower return than a riskier investment. In other words, you
should get a higher return if your investments have more risk.
We have included a graphic for each Fund that shows the Fund's risk profile
as compared to our other funds. The bar chart for each Fund also gives an
indication of a Fund's overall risk. A Fund with a higher variability of
returns is a riskier investment.
---------------------------------------------------------------------------
This Summary lists the principal risks for each Fund followed by an explanation
of these risks. Generally, each Fund has broad risks that apply to all funds,
such as market risk, as well as specific risks of investing in particular types
of securities, such as foreign (non-U.S.) securities risk or small- or
mid-capitalization risk. The risks of a Fund may be increased by the use of
derivatives, such as futures, options and swaps.
---------------------------------------------------------------------------
WHAT IS MARKET RISK?
Market risk is the risk that factors affecting the securities markets
generally will cause a possibly adverse change in the value of the
securities owned by a Fund. The value of these securities may decline simply
because of economic changes or other events that impact large portions of
the market. The factors include real or perceived unfavorable market
conditions, increases in the rate of inflation, and changes in the general
outlook for consumer spending, or corporate earnings. Each of the Funds is
subject to this risk.
---------------------------------------------------------------------------
General
-------
o The Fund's investment adviser is AllianceBernstein L.P., or the
"Adviser", a global investment manager providing diversified services
to institutions and individuals through a broad line of investments
including more than 120 mutual funds.
o Each Fund may enter into derivatives transactions, such as options,
futures, forwards and swap agreements.
o References to "net assets" mean the assets of a Fund after
liabilities, plus any borrowings used for investment purposes. In
other words, net assets reflects the value of a Fund's investments.
o Funds that have a policy to invest at least 80% of their net assets in
securities indicated by their name, such as AllianceBernstein Large
Cap Growth Fund or AllianceBernstein Global Technology Fund, will not
change these policies without 60 days' prior written notice to
shareholders.
o The Adviser employs an active, growth-oriented approach in the
management of equity portfolios. The growth universe is defined
broadly to take advantage of growth opportunities wherever they may
arise.
Research is the cornerstone of the Adviser's growth investment
process, primarily based on internally generated analysis. The process
seeks to identify companies that have underappreciated growth
prospects. We believe that in-depth, "on-the-ground," fundamental
research is the key to investment success. To achieve this goal, the
Adviser has built a global research platform comprised of fundamental
analysts together with portfolio managers located in markets around
the world, which allows them the opportunity to closely monitor the
companies they follow.
DOMESTIC GROWTH FUNDS
The Domestic Growth Funds offer investors seeking capital appreciation a range
of alternative approaches to investing primarily in U.S. equity markets.
AllianceBernstein Large Cap Growth Fund
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[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in equity securities of a limited number of large,
carefully selected, high-quality U.S. companies. The Adviser tends to focus on
those companies that have strong management, superior industry positions,
excellent balance sheets and superior earnings growth prospects.
Under normal circumstances, the Fund will invest at least 80% of its net assets
in common stocks of large-capitalization companies. For these purposes,
"large-capitalization companies" are those that, at the time of investment, have
market capitalizations within the range of market capitalizations of companies
appearing in the Russell 1000(R) Growth Index. While the market capitalizations
of companies in the Russell 1000(R) Growth Index ranged from $[____] million to
almost $[____] billion as of September 30, 2006, the Fund normally will invest
in common stocks of companies with market capitalizations of at least $5 billion
at the time of purchase.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose
substantially above average prospective earnings growth is not fully reflected
in current market valuations.
Normally, the Fund invests in about 40 - 60 companies, with the 25 most highly
regarded of these companies usually constituting approximately 70% of the Fund's
net assets. The Fund is thus atypical from most equity mutual funds in its focus
on a relatively small number of intensively researched companies. The Adviser
expects that normally the Fund's portfolio will tend to emphasize investments in
securities issued by U.S. companies, although it may invest in foreign
securities. The Fund is designed for those seeking to accumulate capital over
time with less volatility than that associated with investment in smaller
companies.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Focused Portfolio Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1Year** 5 Years** 10 Years**
------- --------- ----------
Class A*** Return Before Taxes 9.29% -5.69% 6.61%
Return After Taxes on
Distributions 9.29% -5.69% 5.85%
Return After Taxes on
Distributions and Sale
of Fund Shares 6.04% -4.74% 5.58%
Class B Return Before Taxes 9.31% -5.58% 6.47%
Class C Return Before Taxes 12.40% -5.55% 6.34%
Advisor Class Return Before Taxes 14.54% -4.58% 7.42%
Russell 1000 reflects no deduction
Growth Index for fees, expenses, or taxes) 5.26% -3.58% 6.73%
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class Shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
24.14 32.67 49.31 28.98 -19.87 -23.92 -32.38 22.71 8.19 14.15
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 31.05%, 4th quarter, 1998; and Worst Quarter was down
-19.84%, 3rd quarter, 2001.
AllianceBernstein Growth Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund seeks to achieve its objective by investing primarily in equity
securities of companies with favorable earnings outlooks whose long-term growth
rates are expected to exceed that of the U.S. economy over time. The Adviser
relies heavily upon the fundamental analysis and research of its large internal
research staff. The Adviser looks for companies whose prospective earnings
growth is not fully reflected in current market valuations. The Adviser seeks to
invest in well-managed companies that are leaders in their industries, with
strong business franchises, sustainable competitive advantages and superior
growth prospects.
Investment selections are made from a universe of more than 500 covered
securities. Normally, the Fund invests in approximately 45-70 companies. The
Fund emphasizes investments in large- and mid-capitalization companies, however,
the Fund has the flexibility to invest across the capitalization spectrum. The
Fund is designed for those seeking to accumulate capital over time with exposure
to companies of various sizes.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 Year 5 Years 10 Years**
------ ------- ----------
Class A*** Return Before Taxes 6.89% -2.22% 6.27%
Return After Taxes on
Distributions 6.89% -2.22% 5.20%
Return After Taxes on 4.48% -1.87% 5.11%
Distributions and Sale
of Fund Shares
Class B Return Before Taxes 6.75% -2.11% 6.11%
Class C Return Before Taxes 9.82% -2.08% 5.97%
Advisor Class Return Before Taxes 11.95% -1.07% 7.04%
Russell 3000 (reflects no deduction
Growth Index for fees, expenses, or taxes) 5.17% -3.15% 6.48%
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class Shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
23.20 27.90 28.17 25.59 -18.47 -24.49 -28.63 34.88 15.03 11.64
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 28.86%, 4th quarter, 1998; and Worst Quarter was down
-23.60%, 1st quarter, 2001.
AllianceBernstein Mid-Cap Growth Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund normally invests substantially all of its assets in high-quality equity
securities that the Adviser believes offer the possibility of above-average
long-term growth rates. Under normal circumstances, the Fund invests at least
80% of its net assets in common stocks of mid-capitalization companies. For
these purposes, "mid-capitalization companies" are those that, at the time of
investment, have market capitalizations within the range of market
capitalizations of companies constituting the Russell Midcap(R) Growth Index.
The market capitalizations of companies in the Russell Midcap(R) Growth Index
ranged from $[_____] million to $[______] billion as of September 30, 2006. The
capitalization range of companies in the Russell Midcap(R) Growth Index will
change with the markets and the Fund typically invests in common stocks with
market capitalizations of between $[1] billion and $[15] billion at time of
purchase.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations. In addition
to the fundamental company research provided by the Adviser's research staff,
the Fund utilizes a top-down, thematic approach to manage the portfolio. This
may include the incorporation of economic, sector and industry level factors in
portfolio decisions.
Normally, the Fund invests in securities of a smaller number of companies,
usually about 40 to 70 companies, with the 25 most highly regarded of these
companies usually constituting approximately 70% of the Fund's net assets.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Focused Portfolio Risk
o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 5 10
Year Years Years**
---- ----- -------
Class A*** Return Before Taxes 2.16% 2.20% 6.91%
Return After Taxes on 0.69% 1.91% 4.85%
Distributions
Return After Taxes on
Distributions and Sale
of Fund Shares 2.98% 1.85% 4.92%
Class B Return Before Taxes 2.03% 2.15% 6.64%
Class C Return Before Taxes 4.89% 2.19% 6.44%
Advisor Class Return Before Taxes 6.92% 3.29% 7.61%
Russell Mid-Cap (reflects no deduction for
Growth Index fees, expenses, or taxes) 12.10% 1.38% 9.27%
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class Shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
17.54 36.01 -2.72 33.90 -15.88 -18.09 -32.72 65.96 19.23 6.71
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 26.41%, 4th quarter, 1999; and Worst Quarter was down
-25.52%, 3rd quarter, 2001.
AllianceBernstein Small Cap Growth Portfolio
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
Under normal circumstances, the Fund invests at least 80% of its net assets in
equity securities of smaller companies. For these purposes, "smaller companies"
are those that, at the time of investment, fall within the lowest 20% of the
total U.S. equity market capitalization (excluding, for purposes of this
calculation, companies with market capitalizations of less than $10 million).
Because the Fund's definition of smaller companies is dynamic, the upper limit
on market capitalization will change with the markets. As of September 30, 2006,
there were approximately [_____] smaller companies, and those smaller companies
had market capitalizations ranging up to approximately $[____] billion.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth has been underestimated by the marketplace or whose earnings
prospects are not fully reflected in current market valuations.
The Fund may invest in any company and industry and in any type of security with
potential for capital appreciation. It invests in well-known and established
companies and in new and less seasoned companies. The Fund's investment policies
emphasize investments in companies that are demonstrating improving fundamentals
and favorable earnings momentum.
Normally, the Fund invests in about 95-125 companies. When selecting securities,
the Adviser typically looks for companies that have strong, experienced
management teams, strong market positions, and the potential to support
above-average earnings growth rates. In making specific investment decisions for
the Fund, the Adviser will employ a "bottom-up" stock selection process. The
Fund may periodically invest in the securities of companies that are expected to
appreciate due to a development particularly or uniquely applicable to that
company regardless of general business conditions or movements of the market as
a whole.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 Year 5 Years 10 Years**
------ ------- ----------
Class A*** Return Before Taxes 0.25% -0.08% 4.42%
Return After Taxes on 0.25% -0.08% 3.19%
Distributions
Return After Taxes on
Distributions and
Sale of Fund Shares 0.16% -0.07% 3.09%
Class B Return Before Taxes -0.16% -0.02% 4.23%
Class C Return Before Taxes 2.89% 0.01% 4.08%
Advisor Class Return Before Taxes 4.96% 1.06% 5.18%
Russell 2000 (reflects no deduction for
Growth Index fees, expenses, or taxes) 4.15% 2.28% 4.69%
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class Shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have higher expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
32.62 17.24 -4.57 12.96 -7.61 -13.64 -31.84 48.09 13.95 4.71
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 25.05%, 4th quarter, 2001; and Worst Quarter was down
-28.79%, 3rd quarter, 2001.
GLOBAL GROWTH FUNDS
The Global Growth Funds offer investors seeking long-term capital appreciation a
range of alternative approaches to investing in foreign securities.
AllianceBernstein Global Technology Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in equity securities of companies expected to derive
a substantial portion of their income from products and services in
technology-related industries and/or to benefit from technological advances and
improvements (i.e., companies principally engaged in the production, creation,
marketing or distribution of technology products and services or that use
technology extensively). The Fund will normally invest at least 80% of its net
assets in the equity securities of these companies.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations.
Normally, the Fund invests in about 40-70 companies from multiple industry
segments, in an attempt to maximize opportunity and reduce risk. When selecting
securities, the Adviser emphasizes companies that are demonstrating improving
fundamentals and favorable earnings momentum and companies that demonstrate the
potential to support above-average earnings growth rates.
The Fund invests in a global portfolio of securities issued by U.S. and non-U.S.
companies selected for their capital appreciation potential. The percentage of
the Fund's assets invested in securities of companies in a particular country or
denominated in a particular currency varies in accordance with the Adviser's
assessment of the appreciation potential of such securities. The Fund may invest
without limit in securities of issuers in any one foreign country and in
emerging market countries. The Fund may also invest in synthetic foreign equity
securities.
The Fund may invest in any company and industry and in any type of security,
listed and unlisted, with potential for capital appreciation. It invests in
well-known, established companies as well as new, smaller or less-seasoned
companies. Investments in new, smaller or less-seasoned companies may offer more
reward but may also entail more risk than is generally true of larger,
established companies.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Emerging Market Risk
o Industry/Sector Risk o Currency Risk
o Foreign Risk o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 Year** 5 Years** 10 Years**
-------- --------- ----------
Class A*** Return Before Taxes 0.50% -8.78% 5.24%
Return After Taxes on
Distributions 0.50% -8.78% 4.78%
Return After Taxes on
Distributions and Sale
of Fund Shares 0.33% -7.24% 4.50%
Class B Return Before Taxes 0.16% -8.68% 5.07%
Class C Return Before Taxes 3.21% -8.65% 4.93%
Advisor Class Return Before Taxes 5.28% -7.70% 6.01%
MSCI World (reflects no deduction for
Index (Net)+ fees, expenses, or taxes) 9.49% 2.18% 7.04%
MSCI World (reflects no deduction for
Information fees, expenses, or taxes) 4.81% -7.19% N/A
Technology
Index (Net)+#
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class Shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
+ The MSCI World Information Technology Index (Net) and the MSCI World Index
(Net) reflect the reinvestment of dividends net of non-U.S. withholding
taxes.
# The information in the MSCI World Information Technology Index (Net) shows
how the Fund's performance compares with the returns of an index of
securities similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
19.41 4.54 63.14 71.78 -24.62 -25.88 -42.95 41.67 4.93 4.97
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 44.57%, 4th quarter, 1999; and Worst Quarter was down
-35.31%, 3rd quarter, 2001.
AllianceBernstein Global Health Care Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
Under normal circumstances, the Fund invests at least 80%, and normally
substantially all, of its net assets in equity securities issued by companies
principally engaged in health care and health care-related industries ("Health
Care Industries") (companies principally engaged in the discovery, development,
provision, production or distribution of products and services that relate to
the diagnosis, treatment and prevention of diseases or other medical disorders).
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations.
The Fund seeks primarily to take advantage of capital appreciation opportunities
identified by the Adviser in emerging technologies and services in Health Care
Industries by investing in a portfolio of securities of U.S. and non-U.S.
companies that are expected to profit from the development of new products and
services for these industries. The Adviser adjusts the Fund's exposure to
particular national economies based on its perception of the most favorable
markets and issuers. The percentage of the Fund's assets invested in securities
of companies in a particular country or denominated in a particular currency
varies in accordance with the Adviser's assessment of the appreciation potential
of such securities and the strength of that currency.
Normally, the Fund invests in securities of a smaller number of companies,
usually about 25 to 45 companies. The Fund may invest in new, smaller or
less-seasoned companies as well as in larger, established companies in Health
Care Industries. Investments in new, smaller or less-seasoned companies may
offer more reward but may also entail more risk than is generally true of
larger, established companies. The Fund may invest in foreign securities,
foreign government securities and securities issued by U.S. companies as the
Adviser considers most advantageous. The Fund may invest without limit in
securities of issuers in any one foreign country and in emerging market
countries. The Fund may also invest in synthetic foreign equity securities.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Currency Risk
o Industry/Sector Risk o Capitalization Risk
o Foreign Risk o Focused Portfolio Risk
o Emerging Market Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 5 Since
Year Years Inception**
---- ----- -----------
Class A*** Return Before Taxes 12.43% -0.29% 4.65%
Return After Taxes on
Distributions 12.43% -0.29% 4.61%
Return After Taxes on
Distributions and
Sale of Fund Shares 8.08% -0.24% 3.99%
Class B Return Before Taxes 12.51% -0.17% 4.58%
Class C Return Before Taxes 15.58% -0.14% 4.60%
Advisor Class Return Before Taxes 17.80% 0.89% 5.82%
MSCI World (reflects no deduction for
Index (Net)+ fees, expenses, or taxes) 9.49% 2.18% 6.80%
MSCI World (reflects no deduction for
Healthcare fees, expenses, or taxes) 9.00% -0.35% 2.94%
Index (Net)+#
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for all Classes is 8/27/99.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
+ The MSCI World Healthcare Index (Net) and the MSCI World Index (Net)
reflect the reinvestment of dividends net of non-U.S. withholding
taxes.
# The information in the MSCI World Healthcare Index (Net) shows how the
Fund's performance compares with the returns of an index of securities
similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
n/a n/a n/a n/a 31.44 -17.56 -17.24 21.05 6.22 17.39
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 13.76%, 2nd quarter, 2000; and Worst Quarter was down
-19.20%, 1st quarter, 2001.
AllianceBernstein Global Research Growth Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is to seek long-term growth of capital.
The Fund invests primarily in a global portfolio of equity securities of
companies within various market sectors selected by the Adviser for their growth
potential. Examples of the types of market sectors into which the Adviser may
invest the Fund's assets include, but are not limited to, communications and
information technology, health care, financial services, infrastructure, energy
and natural resources, and consumer growth.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations. As one of
the largest multi-national investment management firms, the Adviser has access
to considerable information concerning the companies in its research universe,
an in-depth understanding of the products, services, markets and competition of
these companies, and a good knowledge of their management.
The Adviser's Global Research Growth Portfolio Oversight Group, in consultation
with the research sector heads, is responsible for determining the market
sectors into which the Fund's assets are invested and the percentage allocation
into each sector. The Adviser allocates the Fund's investments among the
selected market sectors based on fundamental company research and its assessment
of both current and forecasted investment opportunities and conditions. The
Adviser may vary the percentage allocation to each sector and may, on occasion,
change the market sectors into which the Fund's assets will be invested as a
sector's growth potential matures and new trends for growth emerge. The Adviser
believes that the ability to allocate assets among the industry sectors allows
the Fund to pursue the most attractive investment trends before companies within
a market sector become overpriced and to re-apportion investments as conditions
warrant. Through this process, the Adviser seeks to take advantage of the
relative attractiveness of different market sectors as growth trends mature and
new trends emerge.
Within each sector, stock selection emphasizes investment in companies
representing the research sector head groups' top picks for their respective
sectors. The Fund invests, under normal circumstances, in the equity securities
of companies located in at least three countries (and normally substantially
more), one of which may be the United States. The Fund invests in both developed
and emerging markets countries. Geographic distribution of the Fund's
investments among countries or regions also will be a product of the stock
selection process rather than a pre-determined allocation. The Fund may also
invest in synthetic foreign equity securities. The Adviser expects that normally
the Fund's portfolio will tend to emphasize investments in larger capitalization
companies, although it may invest in smaller or medium capitalization companies.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Emerging Market Risk
o Foreign Risk o Allocation Risk
o Currency Risk o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
Since
1 Year Inception**
------ -----------
Class A*** Return Before Taxes 10.89% 16.74%
Return After Taxes on 10.29% 16.02%
Distributions
Return After Taxes on
Distributions and Sale
of Fund Shares 7.63% 14.27%
Class B Return Before Taxes 11.04% 17.18%
Class C Return Before Taxes 14.04% 17.38%
Advisor Class Return Before Taxes 16.16% 18.55%
MSCI World Index (Net)+ (reflects no deduction for
fees, expenses, or taxes) 9.49% 14.84%
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for all Classes is 7/22/02.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
+ The MSCI World Index (Net) reflects the reinvestment of dividends net
of non-U.S. withholding taxes.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
n/a n/a n/a n/a n/a n/a n/a 34.28 12.25 15.82
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 16.92%, 2nd quarter, 2003; and Worst Quarter was down
-4.91%, 1st quarter, 2003.
AllianceBernstein International Research Growth Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in an international portfolio of equity securities of
companies within various market sectors selected by the Adviser for their growth
potential. Examples of the types of market sectors into which the Adviser may
invest the Fund's assets include, but are not limited to, telecommunications,
information technology, health care, financial services, infrastructure, energy
and natural resources, and consumer growth.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations. As one of
the largest multi-national investment management firms, the Adviser has access
to considerable information concerning the companies in its research universe,
an in-depth understanding of the products, services, markets and competition of
these companies, and a good knowledge of their management.
The Adviser's International Research Growth Portfolio Oversight Group, in
consultation with the research sector heads, is responsible for determining the
market sectors into which the Fund's assets are invested and the percentage
allocation into each sector. The Adviser allocates the Fund's investments among
the selected market sectors based on its assessment of both current and
forecasted investment conditions and opportunities.
Within each sector, stock selection emphasizes investment in companies
representing the industry analyst groups' top picks for their respective
sectors. The Fund invests, under normal circumstances, in the equity securities
of companies located in at least three countries (and normally substantially
more) other than the United States. The Fund invests in securities of companies
in both developed and emerging markets countries. Geographic distribution of the
Fund's investments among countries or regions also will be a product of the
stock selection process rather than a pre-determined allocation. The Fund may
also invest in synthetic foreign equity securities. The Adviser expects that
normally the Fund's portfolio will tend to emphasize investments in larger
capitalization companies, although the Fund may invest in companies with smaller
market capitalizations.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Emerging Market Risk
o Foreign Risk o Allocation Risk
o Currency Risk o Capitalization Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
Since
1 Year 5 Years Inception**
------ ------- -----------
Class A*** Return Before Taxes 12.72% 1.00% 1.90%
Return After Taxes
on Distributions 12.72% 1.00% 1.76%
Return After Taxes on 8.27% 0.86% 1.56%
Distributions and Sale
of Fund Shares
Class B Return Before Taxes 12.95% 1.12% 1.71%
Class C Return Before Taxes 15.83% 1.12% 1.71%
Advisor Class Return Before Taxes 18.07% 2.16% 2.75%
MSCI EAFE Growth (reflects no deduction
Index (Net)+ for fees, expenses, or
taxes other than
non-U.S. withholding taxes) 13.28% 1.92% 1.96%
MSCI AC World Index (reflects no deduction
(ex. U.S.)(Net)+# for fees, expenses, or
taxes other than non-U.S.
withholding taxes) 16.62% 6.27% N/A
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for all Classes is 3/3/98.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
+ The MSCI AC World Index (ex. U.S.) (Net) and the MSCI EAFE Growth Index
(Net) reflect the reinvestment of dividends net of non-U.S. withholding
taxes.
# The information in the MSCI AC World Index (ex. U.S.) (Net) shows how the
Fund's performance compares with the returns of an index of securities
similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
n/a n/a n/a 47.21 -25.35 -20.17 -18.45 26.66 13.08 17.71
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 30.43%, 4th quarter, 1999; and Worst Quarter was down
-21.26%, 3rd quarter, 2002.
AllianceBernstein International Growth Fund
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in an international portfolio of equity securities of
companies located in both developed and emerging countries. The Fund's
investment process relies upon comprehensive fundamental company research
produced by the Adviser's large research team of over 40 non-U.S. analysts
covering both developed and emerging markets around the globe. Research-driven
stock selection is the primary driver of the portfolio's return and all other
decisions, such as country allocation, are generally the result of the stock
selection process.
The Fund's Portfolio Managers and the International Growth Portfolio Oversight
Group, which are responsible for determining the market sectors into which the
Fund's assets are invested and the percentage allocation into each sector, use
the Adviser's research recommendations to assess investments for the Fund. They
also consider input from the heads of global sector research with the goal of
identifying the most attractive portfolio candidates that display superior
earnings growth and reasonable valuations. The Portfolio Management Team then
builds a portfolio concentrated in our best research-driven investment ideas
that capitalizes on the insights of our fundamental research within the optimal
risk/reward framework.
The Fund's portfolio normally consists of approximately 100-130 stocks. The
International Growth Portfolio Oversight Group regularly reviews the country and
sector allocations within the Fund to monitor the Fund's risk profile and to
make appropriate adjustments. The Fund invests, under normal circumstances, in
the equity securities of companies located in at least three countries (and
normally substantially more) other than the United States. The Fund's
investments include companies that are established as a result of privatizations
of state enterprises.
PRINCIPAL RISKS:
------------------------------------------ -------------------------------------
o Market Risk o Currency Risk
o Foreign Risk o Emerging Market Risk
------------------------------------------ -------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns*
(For the periods ended December 31, 2005)
1 5 10
Year Years Years**
---- ----- -------
Class A*** Return Before Taxes 14.70% 9.56% 10.84%
Return After Taxes
on Distributions 14.65% 9.63% 8.20%
Return After Taxes
on Distributions and
Sale of Fund Shares 10.04% 8.45% 7.73%
Class B Return Before Taxes 14.95% 9.68% 10.67%
Class C Return Before Taxes 18.03% 9.72% 10.51%
Advisor Class Return Before Taxes 20.19% 10.88% 11.65%
MSCI World Index (reflects no deduction
(ex. U.S.) (Net)+ for fees, expenses,
or taxes other than
non-U.S. withholding taxes) 14.47% 4.92% 6.22%
MSCI AC World Index (reflects no deduction
(ex. U.S.)(Net)+# for fees, expenses, or
taxes other than
non-U.S. withholding taxes) 16.62% 6.27% N/A
* Average annual total returns reflect imposition of the maximum front-end or
contingent deferred sales charges as well as conversion of Class B shares
to Class A shares after the applicable period.
** Inception Date for Advisor Class shares: 10/1/96. Performance information
for periods prior to the inception of Advisor Class shares is the
performance of the Fund's Class A shares adjusted to reflect the lower
expense ratio of Advisor Class shares.
*** After-tax returns:
-- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different expense
ratios;
-- Are an estimate, which is based on the highest historical individual
federal marginal income tax rates, and do not reflect the impact of
state and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown; and
-- Are not relevant to investors who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
+ The MSCI AC World Index (ex. U.S.) (Net) and the MSCI World Index
(ex. U.S.) (Net) reflect the reinvestment of dividends net of non-U.S.
withholding taxes.
# The information in the MSCI AC World Index (ex. U.S.) (Net) shows how the
Fund's performance compares with the returns of an index of securities
similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
23.14 13.18 8.92 56.33 -25.33 -18.13 -6.22 44.72 23.85 19.83
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 34.15%, 4th quarter, 1999; and Worst Quarter was down
-17.44%, 3rd quarter, 1998.
RISKS SUMMARY
--------------------------------------------------------------------------------
In this Summary, we describe the principal and other risks that may affect a
Fund's portfolio as a whole. This Prospectus has additional
descriptions of risks applicable to specific investments in the discussions
below under "More Information About the Funds and Their Investments."
MARKET RISK
This is the risk that the value of a Fund's investments will fluctuate as the
stock or bond markets fluctuate and that prices overall will decline over short-
or long-term periods. It includes the risk that a particular style of investing,
such as growth, may be underperforming the stock market generally.
INDUSTRY/SECTOR RISK
This is the risk of investments in a particular industry or group of related
industries, such as the technology or health care industry. Market or economic
factors affecting that industry could have a major effect on the value of the
Fund's investments.
CAPITALIZATION RISK
This is the risk of investments in small- to mid-capitalization companies.
Investments in small- and mid-cap companies may be more volatile than
investments in large-cap companies. Investments in small-cap companies tend to
be more volatile than investments in mid- or large-cap companies. A Fund's
investments in smaller capitalization companies may have additional risks
because these companies often have limited product lines, markets or financial
resources.
FOREIGN (Non-U.S.) RISK
A Fund's investments in securities of non-U.S. issuers may experience more rapid
and extreme changes in value than investments in securities of U.S. companies.
The securities markets of many countries are relatively small, with a limited
number of companies representing a small number of securities. Non-U.S. issuers
usually are not subject to the same degree of regulation as U.S. issuers.
Reporting, accounting and auditing standards of countries differ, in some cases
significantly, from U.S. standards. Nationalization, expropriation or
confiscatory taxation, currency blockage or political changes or diplomatic
developments could adversely affect a Fund's investments in a country other than
the United States. To the extent a Fund invests in a particular country or
geographic region, the Fund may have more significant risk due to market changes
or other factors affecting that country or region, including political
instability and unpredictable economic conditions.
EMERGING MARKET RISK
Foreign investment risk may be particularly high to the extent a Fund invests in
emerging market securities of issuers based in countries with developing
economies. These securities may present market, credit, currency, liquidity,
legal, political and other risks different from, or greater than, the risks of
investing in developed foreign (non-U.S.) countries.
CURRENCY RISK
This is the risk that fluctuations in the exchange rates between the U.S. Dollar
and foreign (non-U.S.) currencies may negatively affect the value of a Fund's
investments or reduce the returns of a Fund.
FOCUSED PORTFOLIO RISK
This is the risk that investments in a limited number of companies may have more
risk because changes in the value of a single security may have a more
significant effect, either negative or positive, on a Fund's net asset value.
ALLOCATION RISK
This is the risk that the allocation of a Fund's investments among industry
sectors may have a more significant adverse effect on the Fund's net asset value
when one of these sectors is performing more poorly than the other.
MANAGEMENT RISK
Each Fund is subject to management risk because it is an actively managed
investment portfolio. The Adviser will apply its investment techniques and risk
analyses, including its value approach, in making investment decisions for the
Funds, but there is no guarantee that its techniques will produce the intended
result.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------------
Emerging Focused
Market Industry/ Capitalization Foreign Market Currency Portfolio Allocation Management
Fund Risk Sector Risk Risk Risk Risk Risk Risk Risk Risk
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Large
Cap Growth Fund o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Growth
Fund o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Mid-Cap
Growth Fund o o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Small
Cap Growth Portfolio o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global
Technology Fund o o o o o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global
Health Care Fund o o o o o o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global
Research Growth Fund o o o o o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein
International Research
Growth Fund o o o o o o o
------------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein
International Growth Fund o o o o o
------------------------------------------------------------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUNDS
--------------------------------------------------------------------------------
---------------------------------------------------------------------------
WHY ARE FUND FEES AND EXPENSES IMPORTANT?
Fees and expenses reduce the investment performance of a Fund. The
information provided below is intended to help you understand what these
fees and expenses are and provide examples of the dollar amount of these
costs to help you make comparisons with other funds. Some of these fees are
paid directly by you at the time of investment (for example, a front-end
sales charge) or, under certain circumstances, at the time you redeem or
sell your shares back to the Fund. You pay other fees and expenses
indirectly because they are deducted from a Fund's assets and reduce the
value of your shares. These fees include management fees, distribution
(Rule 12b-1) fees, and operating expenses.
---------------------------------------------------------------------------
SHAREHOLDER FEES (fees paid directly from your investment)
Advisor
Class A Class B Class C Class
Shares Shares Shares Shares
------ ------ ------ ------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% (a) None None None
Maximum Deferred Sales Charge
(Load) (as a percentage of
offering price or redemption
proceeds, whichever is lower) None (a) 4.00%* (a) 1.00%** (a) None
Exchange Fee None None None None
(a) Class A sales charges may be reduced or eliminated in certain
circumstances, typically for large purchases. In some cases, however, a 1%,
1-year contingent deferred sales charge, or CDSC, may apply. CDSCs for
Class A, B and C shares may also be subject to waiver in certain
circumstances. See "Investing in the Funds--CDSC Waivers and Other
Programs" in this Prospectus and "Purchase of Shares" in the Statement of
Additional Information or SAI.
* Class B shares automatically convert to Class A shares after eight years.
The CDSC decreases over time. For Class B shares the CDSC decreases 1.00%
annually to 0% after the fourth year.
** For Class C shares the CDSC is 0% after the first year.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets) and
EXAMPLES
The Examples are intended to help you compare the cost of investing in the Funds
with the cost of investing in other funds. They assume that you invest $10,000
in a Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. They also assume that your investment has a 5% return
each year, that the Fund's operating expenses stay the same and that all
dividends and distributions are reinvested. Although your actual costs may be
higher or lower, based on these assumptions your costs as reflected in the
Examples would be:
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Large Cap Growth Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .70% .70% .70% .70%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Growth Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees
Distribution and/or .75% .75% .75% .75%
Service (12b-1) Fees
Other Expenses: .30% 1.00% 1.00% None
Transfer Agent
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating [_____]% [_____]% [_____]% [_____]%
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Mid-Cap Growth Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .71% .71% .71% .71%
Distribution and/or
Service (12b-1) Fees .22% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Small Cap Growth
Portfolio
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .27% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Technology Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .73% .73% .73% .73%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Health
Care Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Research
Growth Fund
Advisor
Class A Class B Class C Class
------- ------- ------- -----
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [____]% [____]% [____]% [_____]%
Other Expenses [____]% [____]% [____]% [_____]%
Total Other Expenses [____]% [____]% [____]% [_____]%
Total Fund Operating
Expenses [____]% [____]% [____]% [_____]%
Waiver and/or Expense
Reimbursement (a) ([___])% ([____])% ([____])% ([_____])%
Net Expenses [____]% [____]% [____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
International Research
Growth Fund
Class A Class B Class C Class
------- ------- ------- -----
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [____]% [____]% [____]% [_____]%
Other Expenses [____]% [____]% [____]% [_____]%
Total Other Expenses [____]% [____]% [____]% [_____]%
Total Fund Operating
Expenses [____]% [____]% [____]% [_____]%
Waiver and/or Expense
Reimbursement (a) ([___])% ([____])% ([____])% ([_____])%
Net Expenses [____]% [____]% [____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years* $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
International Growth Fund
Class A Class B Class C Advisor Class
------- ------- ------- -------------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% 1.00% 1.00% None
Other Expenses:
Transfer Agent [_____]% [_____]% [_____]% [_____]%
Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Other Expenses [_____]% [_____]% [_____]% [_____]%
Total Fund Operating
Expenses [_____]% [_____]% [_____]% [_____]%
Examples
--------------------------------------------------------------------------------
Advisor
Class A Class B+ Class B++ Class C+ Class C++ Class
------- -------- --------- -------- --------- -----
After 1 Year $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 3 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 5 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
After 10 Years $[____] $[_____] $[_____] $[_____] $[_____] $[_____]
+ Assumes redemption at the end of period and, with respect to shares
held for 10 years, conversion of Class B shares to Class A shares after
eight years.
++ Assumes no redemption at end of period and, with respect to shares held
for 10 years, conversion of Class B shares to Class A shares after
eight years.
* These examples assume that the Adviser's agreement to waive management
fees and/or bear Fund expenses is not extended beyond its initial
period.
(a) Reflects the Adviser's contractual waiver of a portion of its advisory
fee and/or reimbursement of a portion of the Fund's operating expenses.
This waiver extends through the Fund's current fiscal year and may be
extended by the Adviser for additional one-year terms.
INVESTING IN THE FUNDS
--------------------------------------------------------------------------------
This section discusses how to buy, sell or redeem, or exchange different classes
of shares in a Fund that are offered in this Prospectus. The Funds offer four
classes of shares through this Prospectus. Retirement shares of the Funds
(except AllianceBernstein International Research Growth Fund) are available
through a separate prospectus.
Each share class represents an investment in the same portfolio of securities,
but the classes may have different sales charges and bear different on-going
distribution expenses. For additional information on the differences between the
different classes of shares and factors to consider when choosing among them,
please see "The Different Share Class Expenses" and "The `Pros' and `Cons' of
Different Share Classes" below. Keep in mind that only Class A shares offer
Quantity Discounts on sales charges, as described more fully under "Sales Charge
Reduction Programs" below. Also, you can learn more about payments to brokers,
financial planners, banks, insurance companies, registered investment advisors
or other "financial intermediaries" who distribute shares of the Funds and your
individual financial advisor under "Payments to Financial Advisors and their
Firms."
How to Buy Shares
Class A, Class B and Class C Shares
You may purchase a Fund's Class A, Class B or Class C shares through financial
intermediaries, such as broker-dealers or banks. You also may purchase shares
directly from the Funds' principal underwriter, AllianceBernstein Investments,
Inc., or ABI.
Purchases Minimums and Maximums
Minimums:*
--Initial: $ 2,500
--Subsequent: $ 50
* These purchase minimums may not apply to some accounts established in
connection with the Automatic Investment Program and to some retirement-related
investment programs. Please see "Automatic Investment Program" and "Employee
Benefit Plans" below. Additionally, these investment minimums do not apply to
persons participating in a fee-based program sponsored and maintained by a
registered broker-dealer or other financial intermediary and approved by ABI.
Maximum Individual Purchase Amount:
--Class A shares None
--Class B shares $ 100,000
--Class C shares $1,000,000
Your broker or financial advisor must receive your purchase request by 4:00
p.m., Eastern time, and submit it to the Fund by a pre-arranged time for you to
receive the next-determined net asset value or NAV, less any applicable initial
sales charge.
If you are an existing Fund shareholder and you have completed the appropriate
section of the Subscription Application, you may purchase additional shares by
telephone with payment by electronic funds transfer in amounts not exceeding
$500,000. AllianceBernstein Investor Services, Inc., or ABIS, must receive and
confirm telephone requests before 4:00 p.m., Eastern time, to receive that day's
public offering price. Call 800-221-5672 to arrange a transfer from your bank
account.
Advisor Class Shares
You may purchase Advisor Class shares through your financial advisor at NAV.
Advisor Class shares may be purchased and held solely:
o through accounts established under a fee-based program, sponsored and
maintained by a registered broker-dealer or other financial
intermediary and approved by ABI;
o through a defined contribution employee benefit plan (e.g., a 401(k)
plan) that has at least $10,000,000 in assets and that purchases
shares directly without the involvement of a financial intermediary;
and
o by investment advisory clients of, and certain other persons
associated with, the Adviser and its affiliates or the Funds.
Each Fund's SAI has more detailed information about who may purchase and hold
Advisor Class shares.
Employee Benefit Plans
Special eligibility rules apply to some employee benefit plans. Except as
indicated, there are no investment minimums for the plans listed below. Class A
shares are available to:
o Traditional and ROTH IRAs (the minimums listed in the table above
apply);
o SEPs, SAR-SEPs, SIMPLE IRAs, and individual 403(b) plans;
o AllianceBernstein-sponsored Coverdell Education Savings Accounts
($2,000 initial investment minimum, $150 automatic investment program
monthly minimum);
o AllianceBernstein Link, AllianceBernstein Individual 401(k), and
AllianceBernstein SIMPLE IRA plans; and
o certain defined contribution retirement plans that do not have plan
level or omnibus accounts on the books of the Fund.
Class B shares are generally not available to group retirement plans; however,
group retirement plans that selected Class B shares as an investment alternative
under their plan before September 2, 2003 may continue to purchase Class B
shares.
Class C shares are available to AllianceBernstein Link, AllianceBernstein
Individual 401(k), AllianceBernstein Simple IRA plans with less than $250,000 in
plan assets and 100 employees and to group retirement plans with plan assets of
less than $1,000,000.
Required Information
A Fund is required by law to obtain, verify and record certain personal
information from you or persons on your behalf in order to establish an account.
Required information includes name, date of birth, permanent residential address
and taxpayer identification number (for most investors, your social security
number). A Fund may also ask to see other identifying documents. If you do not
provide the information, the Fund will not be able to open your account. If a
Fund is unable to verify your identity, or that of another person(s) authorized
to act on your behalf, or if the Fund believes it has identified potential
criminal activity, the Fund reserves the right to take action it deems
appropriate or as required by law, which may include closing your account. If
you are not a U.S. citizen or Resident Alien, your account must be affiliated
with a NASD member firm.
A Fund is required to withhold 28% of taxable dividends, capital gains
distributions, and redemptions paid to any shareholder who has not provided the
Fund with his or her certified taxpayer identification number. To avoid this,
you must provide your correct tax identification number (social security number
for most investors) on your Subscription Application.
General
ABI may refuse any order to purchase shares. Each Fund reserves the right to
suspend the sale of its shares to the public in response to conditions in the
securities markets or for other reasons.
The Different Share Class Expenses
This section describes the different expenses of investing in each class and
explains factors to consider when choosing a class of shares. The expenses can
include distribution and/or service fees (12b-1 fees), initial sales charges
and/or CDSCs. Please see below for a discussion of how CDSCs are calculated. If
you are not eligible to buy Advisor Class shares, you will need to choose among
Class A, Class B and Class C shares. Only Class A shares offer Quantity
Discounts, as described below under "Sales Charge Reduction Programs."
---------------------------------------------------------------------------
WHAT IS A RULE 12b-1 FEE?
A Rule 12b-1 fee is a fee deducted from a Fund's assets that is used to
pay for personal service, maintenance of shareholder accounts and
distribution costs, such as advertising and compensation of financial
intermediaries. The amount of each share class's 12b-1 fee, if any, is
disclosed below and in the relevant Fund's fee table near the front of
this Prospectus.
---------------------------------------------------------------------------
Asset-based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees
Each Fund has adopted plans under Commission Rule 12b-1 that allows the Fund to
pay asset-based sales charges or distribution and/or service fees for the
distribution and sale of its shares. The amount of these fees for each class of
the Fund's shares is up to:
Distribution and/or
Service (Rule 12b-1)
Fee (as a Percentage
of Aggregate Average
Daily Net Assets)
-----------------
Class A 0.30%*
Class B 1.00%
Class C 1.00%
Advisor Class None
----------
* The maximum fee allowed under the Rule 12b-1 Plan for the Class A shares of
AllianceBernstein Growth Fund and AllianceBernstein Large Cap Growth Fund
is .50% of the aggregate average daily net assets. The Directors of
AllianceBernstein Growth Fund and AllianceBernstein Large Cap Growth Fund
currently limit the payments to .30%.
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees. Class B and Class C shares are subject to
higher Rule 12b-1 fees than Class A shares. Class B shares are subject to these
higher fees for a period of eight years, after which they convert to Class A
shares. The higher fees mean a higher expense ratio, so Class B and Class C
shares pay correspondingly lower dividends and may have a lower NAV (and
returns) than Class A shares. All or some of these fees may be paid to financial
intermediaries, including your financial advisor's firm.
Class A Shares--Initial Sales Charge Alternative
You can purchase Class A shares at their public offering price (or cost), which
is NAV plus an initial sales charge of up to 4.25% of the offering price.
Purchases of Class A shares in the amount of $1,000,000 or more are not subject
to a sales charge but, if redeemed within one year, may be subject to a CDSC of
up to 1%. When a non-AllianceBernstein sponsored group retirement plan
terminates a Fund as an investment option, all investments in Class A shares of
that Fund through the plan are subject to a 1%, 1-year CDSC upon redemption.
Furthermore, when a group retirement plan ceases to participate in an
AllianceBernstein-sponsored group retirement plan program within one year,
investments in the Funds' Class A shares through the plan are subject to a 1%
CDSC upon redemption.
Class B Shares--Deferred Sales Charge Alternative
You can purchase Class B shares at NAV without an initial sales charge. This
means that the full amount of your purchase is invested in the Fund. Your
investment, however, is subject to a CDSC if you redeem shares within four years
of purchase. The CDSC varies depending on the number of years you hold the
shares. The CDSC amounts for Class B shares are:
Year Since Purchase CDSC
------------------- ----
First 4.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth and thereafter None
If you exchange your shares for the Class B shares of another AllianceBernstein
Mutual Fund, the CDSC also will apply to the Class B shares received. The CDSC
period begins with the date of your original purchase, not the date of exchange
for the other Class B shares.
Class B shares purchased for cash automatically convert to Class A shares eight
years after the end of the month of your purchase. If you purchase shares by
exchange for the Class B shares of another AllianceBernstein Mutual Fund, the
conversion period runs from the date of your original purchase.
Class C Shares-Asset-Based Sales Charge Alternative
You can purchase Class C shares at NAV without an initial sales charge. This
means that the full amount of your purchase is invested in the Fund. Your
investment, however, is subject to a 1% CDSC if you redeem your shares within 1
year. If you exchange your shares for the Class C shares of another
AllianceBernstein Mutual Fund, the 1% CDSC also will apply to the Class C shares
received. The 1-year period for the CDSC begins with the date of your original
purchase, not the date of the exchange for the other Class C shares.
Class C shares do not convert to any other class of shares of the Fund.
---------------------------------------------------------------------------
HOW IS THE CDSC CALCULATED?
The CDSC is applied to the lesser of NAV at the time of redemption or the
original cost of shares being redeemed (or, as to Fund shares acquired
through an exchange, the cost of the AllianceBernstein mutual fund shares
originally purchased for cash). This means that no sales charge is assessed
on increases in NAV above the initial purchase price. Shares obtained from
dividend or distribution reinvestment are not subject to the CDSC. In
determining the CDSC, it will be assumed that the redemption is, first, of
any shares not subject to a CDSC and, second, of shares held the longest.
---------------------------------------------------------------------------
Advisor Class Shares--Fee Based Program Alternative
You may purchase Advisor Class shares through your financial advisor. Advisor
Class shares are not subject to any initial or contingent sales charges.
However, when you purchase Advisor Class shares through your financial advisor,
your financial advisor may charge a fee. Advisor Class shares are not available
to everyone. See "How to Buy Shares" above.
Sales Charge Reduction programs
This section includes important information about sales charge reduction
programs available to investors in Class A shares and describes information or
records you may need to provide to a Fund or your financial intermediary in
order to be eligible for sales charge reduction programs.
Information about sales charge reduction programs also is available free of
charge and in a clear and prominent format on our website at
www.AllianceBernstein.com (click on "US Investors & Financial Advisors" then
"Investment Insights - Investor Education" then "Sales Charge Reduction
Programs"). More information on Breakpoints and other sales charge waivers is
available in each Fund's SAI.
Required Shareholder Information and Records
In order for shareholders to take advantage of sales charge reductions, a
shareholder or his or her financial intermediary must notify the Fund that the
shareholder qualifies for a reduction. Without notification, the Fund is unable
to ensure that the reduction is applied to the shareholder's account. A
shareholder may have to provide information or records to his or her financial
intermediary or a Fund to verify eligibility for breakpoint privileges or other
sales charge waivers. This may include information or records, including account
statements, regarding shares of the Fund or other AllianceBernstein Mutual Funds
held in:
o all of the shareholder's accounts at the Funds or a financial
intermediary;
o any account of the shareholder at another financial intermediary; and
o accounts of related parties of the shareholder, such as members of the
same family, at any financial intermediary.
---------------------------------------------------------------------------
You Can Reduce Sales Charges When Buying Class A Shares
---------------------------------------------------------------------------
Breakpoints or Quantity Discounts Offered by the Funds
The Funds offer investors the benefit of discounts on the sales charges that
apply to purchases of Class A shares in certain circumstances. These discounts,
which are also known as Breakpoints, can reduce or, in some cases, eliminate the
initial sales charges that would otherwise apply to your Class A investment.
Mutual funds are not required to offer breakpoints and different mutual fund
groups may offer different types of breakpoints.
Breakpoints or Quantity Discounts allow larger investments in Class A shares to
be charged lower sales charges. A shareholder investing more than $100,000 in
Class A shares of a Fund is eligible for a reduced sales charge. Initial sales
charges are eliminated completely for purchases of $1,000,000 or more, although
a 1%, 1-year CDSC may apply.
The sales charge schedule of Class A share Quantity Discounts is as follows:
Initial Sales Charge
as % of as % of
Amount Purchased Net Amount Invested Offering Price
---------------- ------------------- --------------
Up to $100,000 4.44% 4.25%
$100,000 up to $250,000 3.36 3.25
$250,000 up to $500,000 2.30 2.25
$500,000 up to $1,000,000 1.78 1.75
$1,000,000 and above 0.00 0.00
Rights of Accumulation
To determine if a new investment in Class A shares is eligible for a Quantity
Discount, a shareholder can combine the value of the new investment of a Fund
with the value of existing investments in the Fund, any other AllianceBernstein
Mutual Fund, AllianceBernstein Institutional Funds and certain CollegeBoundfund
accounts for which the shareholder, his or her spouse, or child under the age of
21 is the participant. The AllianceBernstein Mutual Funds use the current NAV of
your existing investments when combining them with your new investment.
Combined Purchase Privileges
A shareholder may qualify for a Quantity Discount by combining purchases of
shares of a Fund into a single "purchase." A "purchase" means a single purchase
or concurrent purchases of shares of a Fund or any other AllianceBernstein
Mutual Fund, including AllianceBernstein Institutional Funds, by:
o an individual, his or her spouse, or the individual's children under
the age of 21 purchasing shares for his, her or their own account(s),
including certain CollegeBoundfund accounts;
o a trustee or other fiduciary purchasing shares for a single trust,
estate or single fiduciary account with one or more beneficiaries
involved;
o the employee benefit plans of a single employer; or
o any company that has been in existence for at least six months or has
a purpose other than the purchase of shares of the Fund.
Letter of Intent
An investor may not immediately invest a sufficient amount to reach a Quantity
Discount, but may plan to make one or more additional investments over a period
of time that, in the end, would qualify for a Quantity Discount. For these
situations, the Funds offer a Letter of Intent, which permits the investor to
express the intention, in writing, to invest at least $100,000 in Class A shares
of the Fund or any AllianceBernstein Mutual Fund within 13 months. The Fund will
then apply the Quantity Discount to each of the investor's purchases of Class A
shares that would apply to the total amount stated in the Letter of Intent. If
an investor fails to invest the total amount stated in the Letter of Intent, the
Fund will retroactively collect the sales charges otherwise applicable by
redeeming shares in the investor's account at their then current NAV. Investors
qualifying for a Combined Purchase Privilege may purchase shares under a single
Letter of Intent.
Other Programs
Class A shareholders may be able to purchase additional Class A shares with a
reduced or eliminated sales charge through the following AllianceBernstein
programs: Dividend Reinvestment Program, Dividend Direction Plan and
Reinstatement Privilege. These additional programs are described under "CDSC
Waivers and Other Programs" below.
Class A Shares--Sales at NAV
The Funds may sell their Class A shares at NAV without an initial sales charge
to some categories of investors, including:
o AllianceBernstein Link, AllianceBernstein Individual 401(k), and
AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan
assets or 100 employees;
o investment management clients of the Adviser or its affiliates,
including clients and prospective clients of the Adviser's
AllianceBernstein Institutional Investment Management division;
o present or retired full-time employees and former employees (for
subsequent investment in accounts established during the course of
their employment) of the Adviser, ABI, ABIS and their affiliates or
their spouses, siblings, direct ancestors or direct descendants or any
trust, individual retirement account or retirement plan account for
the benefit of such person;
o officers, directors and present full-time employees of selected
dealers or agents, their spouses, or any trust, individual retirement
account or retirement plan account for the benefit of such person; or
o persons participating in a fee-based program, sponsored and maintained
by a registered broker-dealer or other financial intermediary and
approved by ABI, under which persons pay an asset-based fee for
service in the nature of investment advisory or administrative
services.
CDCS Waivers and Other Programs
---------------------------------------------------------------------------
Here Are Some Ways to Avoid or Minimize Charges on Redemption
---------------------------------------------------------------------------
CDSC Waivers
The Funds will waive the CDSCs on redemptions of shares in the following
circumstances, among others:
o permitted exchanges of shares;
o following the death or disability of a shareholder;
o if the redemption represents a minimum required distribution from an
IRA or other retirement plan to a shareholder who has attained the age
of 70 1/2; or
o if the redemption is necessary to meet a plan participant's or
beneficiary's request for a distribution or loan from a group
retirement plan or to accommodate a plan participant's or
beneficiary's direction to reallocate his or her plan account among
other investment alternatives available under a group retirement plan.
Dividend Reinvestment Program
Shareholders may elect to have all income and capital gains distributions from
their account paid to them in the form of additional shares of the same class of
a Fund under the Fund's Dividend Reinvestment Program. There is no initial sales
charge or CDSC imposed on shares issued pursuant to the Dividend Reinvestment
Program.
Dividend Direction Plan
A shareholder who already maintains accounts in more than one AllianceBernstein
Mutual Fund may direct the automatic investment of income dividends and/or
capital gains by one Fund, in any amount, without the payment of any sales
charges, in shares of the same class of one or more other AllianceBernstein
Mutual Fund(s).
Automatic Investment Program
The Automatic Investment Program allows investors to purchase shares of a Fund
through pre-authorized transfers of funds from the investor's bank account.
Under the Automatic Investment Program, an investor may (i) make an initial
purchase of at least $2,500 and invest at least $50 monthly or (ii) make an
initial purchase of less than $2,500 and commit to a monthly investment of $200
or more until the investor's account balance is $2,500 or more. Shareholders who
committed to monthly investments of $25 or more through the Automatic Investment
Program by October 15, 2004 will be able to continue their program despite the
$50 monthly minimum discussed above. Please see a Fund's SAI for more details.
Reinstatement Privilege
A shareholder who has redeemed all or any portion of his or her Class A or Class
B shares may reinvest all or any portion of the proceeds from the redemption in
Class A shares of any AllianceBernstein Mutual Fund at NAV without any sales
charge, if the reinvestment is made within 120 calendar days after the
redemption date, and, for Class B shares, a CDSC has been paid and ABI has
approved, at its discretion, the reinstatement of the shares.
Systematic Withdrawal Plan
The Funds offer a systematic withdrawal plan that permits the redemption of
Class A, Class B or Class C shares without payment of a CDSC. Under this plan,
redemptions equal to 1% a month, 2% every two months or 3% a quarter of the
value of a Fund account would be free of a CDSC. Shares would be redeemed so
that Class B shares not subject to a CDSC (such as shares acquired with
reinvested dividends or distributions) would be redeemed first and Class B
shares that are held the longest would be redeemed next. For Class A and Class C
shares, shares held the longest would be redeemed first.
The "Pros" and "Cons" of Different Share Classes
The decision as to which class of shares is most beneficial to you depends on
the amount and intended length of your investment. If you are making a large
investment that qualifies for a reduced sales charge, you might consider
purchasing Class A shares. Class A shares, with their lower 12b-1 fees, are
designed for investors with a long-term investing time frame.
Although investors in Class B shares do not pay an initial sales charge, Class B
shares can be more costly than Class A shares over the long run due to their
substantially higher 12b-1 fees. Class B shares redeemed within four years of
purchase are also subject to a CDSC. Class B shares are designed for investors
with an intermediate-term investing time frame.
Class C shares should not be considered as a long-term investment because they
do not convert to Class A shares and are subject to a higher distribution fee
indefinitely. Class C shares do not, however, have an initial sales charge or a
CDSC so long as the shares are held for one year or more. Class C shares are
designed for investors with a short-term investing time frame.
Your financial intermediary may receive differing compensation for selling Class
A, Class B or Class C shares. See "Payments to Financial Advisors and their
Firms" below.
Other
A transaction, service, administrative or other similar fee may be charged by
your broker-dealer, agent or other financial intermediary, with respect to the
purchase, sale or exchange of Class A, Class B, Class C or Advisor Class shares
made through your financial advisor. The financial intermediaries or your
fee-based program also may impose requirements on the purchase, sale or exchange
of shares that are different from, or in addition to, those imposed by the
Funds, including requirements as to the minimum initial and subsequent
investment amounts.
You should consult your financial advisor for assistance in choosing a class of
Fund shares.
Payments to Financial Advisors and Their Firms
Financial intermediaries market and sell shares of the Funds. These financial
intermediaries employ financial advisors and receive compensation for selling
shares of the Funds. This compensation is paid from various sources, including
any sales charge, CDSC and/or Rule 12b-1 fee that you or the Funds may pay. Your
individual financial advisor may receive some or all of the amounts paid to the
financial intermediary that employs him or her.
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What is a Financial Intermediary?
A financial intermediary is a firm that receives compensation for selling
shares of the Funds offered in this Prospectus and/or provides services to
the Funds' shareholders. Financial intermediaries may include, among others,
your broker, your financial planner or advisor, banks and insurance
companies. Financial intermediaries employ financial advisors who deal with
you and other investors on an individual basis.
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In the case of Class A shares, all or a portion of the initial sales charge that
you pay may be paid by ABI to financial intermediaries selling Class A shares.
ABI may also pay these financial intermediaries a fee of up to 1% on purchases
of $1,000,000 or more or for AllianceBernstein Link, AllianceBernstein SIMPLE
IRA plans with more than $250,000 in assets or for purchases made by certain
other retirement plans. Additionally, up to 100% of the Rule 12b-1 fees
applicable to Class A shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class A shares.
In the case of Class B shares, ABI may pay, at the time of your purchase, a
commission to financial intermediaries selling Class B Shares in an amount equal
to 4% of your investment. Additionally, up to 30% of the Rule 12b-1 fees
applicable to Class B shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class B shares.
In the case of Class C shares, ABI may pay, at the time of your purchase, a
commission to firms selling Class C Shares in an amount equal to 1% of your
investment. Additionally, up to 100% of the Rule 12b-1 fee applicable to Class C
shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class C shares.
In the case of Advisor Class shares, your financial advisor may charge ongoing
fees or transactional fees.
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Your financial advisor's firm receives compensation from the Funds, ABI
and/or the Adviser in several ways from various sources, which include some
or all of the following:
- upfront sales commissions
- 12b-1 fees
- additional distribution support
- defrayal of costs for educational seminars and training
- payments related to providing shareholder recordkeeping and/or
transfer agency services
Please read the Prospectus carefully for information on this compensation.
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Other Payments for Distribution Services and Educational Support
In addition to the commissions paid to financial intermediaries at the time of
sale and the fees described under "Asset-Based Sales Charges or Distribution
and/or Service (Rule 12b-1) Fees," some or all of which may be paid to financial
intermediaries (and, in turn, to your financial advisor), ABI, at its expense,
currently provides additional payments to firms that sell shares of the
AllianceBernstein Mutual Funds. Although the individual components may be higher
and the total amount of payments made to each qualifying firm in any given year
may vary, the total amount paid to a financial intermediary in connection with
the sale of shares of the AllianceBernstein Mutual Funds will generally not
exceed the sum of (a) 0.25% of the current year's fund sales by that firm and
(b) 0.10% of average daily net assets attributable to that firm over the year.
These sums include payments to reimburse directly or indirectly the costs
incurred by these firms and their employees in connection with educational
seminars and training efforts about the AllianceBernstein Mutual Funds for the
firms' employees and/or their clients and potential clients. The costs and
expenses associated with these efforts may include travel, lodging,
entertainment and meals. ABI may pay a portion of "ticket" or other
transactional charges.
For 2006, ABI's additional payments to these firms for distribution services and
educational support related to the AllianceBernstein Mutual Funds is expected to
be approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds, or approximately $18,000,000. In 2005, ABI paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or
approximately $18,000,000 for distribution services and educational support
related to the AllianceBernstein Mutual Funds.
A number of factors are considered in determining the additional payments,
including each firm's AllianceBernstein Mutual Fund sales, assets and redemption
rates, and the willingness and ability of the firm to give ABI access to its
financial advisors for educational and marketing purposes. In some cases, firms
will include the AllianceBernstein Mutual Funds on a "preferred list." ABI's
goal is to make the financial advisors who interact with current and prospective
investors and shareholders more knowledgeable about the AllianceBernstein Mutual
Funds so that they can provide suitable information and advice about the funds
and related investor services.
The Funds and ABI also make payments for recordkeeping and other transfer agency
services to financial intermediaries that sell AllianceBernstein Mutual Fund
shares. Please see "Management of the Funds--Transfer Agency and Retirement Plan
Services" below. These expenses paid by the Funds are included in "Other
Expenses" under "Fees and Expenses of the Funds--Annual Fund Operating Expenses"
above.
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If one mutual fund sponsor makes greater distribution assistance payments
than another, your financial advisor and his or her firm may have an
incentive to recommend one fund complex over another. Similarly, if your
financial advisor or his or her firm receives more distribution assistance
for one share class versus another, then they may have an incentive to
recommend that class.
Please speak with your financial advisor to learn more about the total
amounts paid to your financial advisor and his or her firm by the Funds,
the Adviser, ABI and by sponsors of other mutual funds he or she may
recommend to you. You should also consult disclosures made by your
financial advisor at the time of purchase.
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As of the date of the Prospectus, ABI anticipates that the firms that will
receive additional payments for distribution services and/or educational support
include:
A.G. Edwards
AIG Advisor Group
Ameriprise Financial Services
AXA Advisors
Banc of America
Bank One Securities Corp.
BNY Investment Center
Charles Schwab
Chase Investment Services
Citicorp Investment Services
Citigroup Global Markets
Commonwealth Financial Network
Donegal Securities
Independent Financial Marketing Group
ING Advisors Network
Lincoln Financial Advisors
Linsco/Private Ledger
McDonald Investments
Merrill Lynch
Met Life Securities
Morgan Stanley
Mutual Service Corporation
National Financial
PFS Investments
Piper Jaffray
Raymond James
RBC Dain Rauscher
Robert W. Baird
Securities America
Signator Investments
UBS AG
UBS Financial Services
Uvest Financial Services
Wachovia Securities
Wells Fargo Investments
Although the Funds may use brokers and dealers who sell shares of the Funds to
effect portfolio transactions, the Funds do not consider the sale of
AllianceBernstein Mutual Fund shares as a factor when selecting brokers or
dealers to effect portfolio transactions.
How to Exchange Shares
You may exchange your Fund shares for shares of the same class of other
AllianceBernstein Mutual Funds (including AllianceBernstein Exchange Reserves, a
money market fund managed by the Adviser). Exchanges of shares are made at the
next-determined NAV, without sales or service charges. You may request an
exchange by mail or telephone. In order to receive a day's NAV, ABIS must
receive and confirm your telephone exchange request by 4:00 p.m., Eastern time,
on that day. The Funds may modify, restrict or terminate the exchange privilege
on 60 days' written notice.
How to Sell or Redeem Shares
You may "redeem" your shares (i.e., sell your shares to a Fund) on any day the
New York Stock Exchange is open, either directly or through your financial
intermediary. Your sale price will be the next-determined NAV, less any
applicable CDSC, after the Fund receives your redemption request in proper form.
Normally, redemption proceeds are sent to you within 7 days. If you recently
purchased your shares by check or electronic funds transfer, your redemption
payment may be delayed until the Fund is reasonably satisfied that the check or
electronic funds transfer has been collected (which may take up to 15 days). For
Advisor Class shares, if you are in doubt about what procedures or documents are
required by your fee-based program or employee benefit plan to sell your shares,
you should contact your financial advisor.
o Selling Shares Through Your Broker or other Financial Advisor
Your broker or financial advisor must receive your sales request by 4:00 p.m.,
Eastern time, and submit it to the Fund by a pre-arranged time for you to
receive the next-determined NAV, less any applicable CDSC. Your broker or
financial advisor is responsible for submitting all necessary documentation to
the Fund and may charge you a fee for this service.
o Selling Shares Directly to the Fund
By Mail:
o Send a signed letter of instruction or stock power, along with
certificates, to:
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
o For certified or overnight deliveries, send to:
AllianceBernstein Investor Services, Inc.
8000 IH 10 W, 4th floor
San Antonio, TX 78230
o For your protection, a bank, a member firm of a national stock
exchange or another eligible guarantor institution must guarantee
signatures. Stock power forms are available from your financial
intermediary, ABIS and many commercial banks. Additional documentation
is required for the sale of shares by corporations, intermediaries,
fiduciaries and surviving joint owners. If you have any questions
about these procedures, contact ABIS.
By Telephone:
o You may redeem your shares for which no stock certificates have been
issued by telephone request. Call ABIS at 800-221-5672 with
instructions on how you wish to receive your sale proceeds.
o ABIS must receive and confirm a telephone redemption request by 4:00
p.m., Eastern time, for you to receive that day's NAV, less any
applicable CDSC.
o For your protection, ABIS will request personal or other information
from you to verify your identity and will generally record the calls.
Neither the Fund nor the Adviser, ABIS, ABI or other Fund agent will
be liable for any loss, injury, damage or expense as a result of
acting upon telephone instructions purporting to be on your behalf
that ABIS reasonably believes to be genuine.
o If you have selected electronic funds transfer in your Subscription
Application, the redemption proceeds will be sent directly to your
bank. Otherwise, the proceeds will be mailed to you.
o Redemption requests by electronic funds transfer or check may not
exceed $100,000 per Fund account per day.
o Telephone redemption is not available for shares held in nominee or
"street name" accounts, retirement plan accounts, or shares held by a
shareholder who has changed his or her address of record within the
previous 30 calendar days.
Frequent Purchases and Redemptions of Fund Shares
Each Fund's Board of Directors has adopted policies and procedures designed to
detect and deter frequent purchases and redemptions of Fund shares or excessive
or short-term trading that may disadvantage long-term Fund shareholders. These
policies are described below. Each Fund reserves the right to restrict, reject
or cancel, without any prior notice, any purchase or exchange order for any
reason, including any purchase or exchange order accepted by any shareholder's
financial intermediary.
Risks Associated With Excessive Or Short-term Trading Generally. While the Funds
will try to prevent market timing by utilizing the procedures described below,
these procedures may not be successful in identifying or stopping excessive or
short-term trading in all circumstances. By realizing profits through short-term
trading, shareholders that engage in rapid purchases and sales or exchanges of a
Fund's shares dilute the value of shares held by long-term shareholders.
Volatility resulting from excessive purchases and sales or exchanges of Fund
shares, especially involving large dollar amounts, may disrupt efficient
portfolio management. In particular, a Fund may have difficulty implementing its
long-term investment strategies if it is forced to maintain a higher level of
its assets in cash to accommodate significant short-term trading activity.
Excessive purchases and sales or exchanges of a Fund's shares may force the Fund
to sell portfolio securities at inopportune times to raise cash to accommodate
short-term trading activity. In addition, a Fund may incur increased expenses if
one or more shareholders engage in excessive or short-term trading. For example,
a Fund may be forced to liquidate investments as a result of short-term trading
and incur increased brokerage costs and realization of taxable capital gains
without attaining any investment advantage. Similarly, a Fund may bear increased
administrative costs due to asset level and investment volatility that
accompanies patterns of short-term trading activity. All of these factors may
adversely affect Fund performance.
Funds that may invest significantly in foreign securities may be particularly
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a shareholder engaging in a short-term trading strategy
to exploit differences in Fund share prices that are based on closing prices of
foreign securities established some time before the Fund calculates its own
share price (referred to as "time zone arbitrage"). The Funds have procedures,
referred to as fair value pricing, designed to adjust closing market prices of
foreign securities to reflect what is believed to be the fair value of those
securities at the time a Fund calculates its NAV. While there is no assurance,
the Funds expect that the use of fair value pricing, in addition to the
short-term trading policies discussed below, will significantly reduce a
shareholder's ability to engage in time zone arbitrage to the detriment of other
Fund shareholders.
A shareholder engaging in a short-term trading strategy may also target a Fund
that does not invest primarily in foreign securities. Any Fund that invests in
securities that are, among other things, thinly traded, traded infrequently or
relatively illiquid has the risk that the current market price for the
securities may not accurately reflect current market values. A shareholder may
seek to engage in short-term trading to take advantage of these pricing
differences (referred to as "price arbitrage"). Funds that may be adversely
affected by price arbitrage include, in particular, those Funds that
significantly invest in small cap securities, technology and other specific
industry sector securities.
Policy Regarding Short-term Trading. Purchases and exchanges of shares of the
Funds should be made for investment purposes only. The Funds seek to prevent
patterns of excessive purchases and sales or exchanges of Fund shares. The Funds
will seek to prevent such practices to the extent they are detected by the
procedures described below. The Funds reserve the right to modify this policy,
including any surveillance or account blocking procedures established from time
to time to effectuate this policy, at any time without notice.
o Transaction Surveillance Procedures. The Funds, through their agents,
ABI and ABIS, maintain surveillance procedures to detect excessive or
short-term trading in Fund shares. This surveillance process involves
several factors, which include scrutinizing transactions in Fund
shares that exceed certain monetary thresholds or numerical limits
within a specified period of time. Generally, more than two exchanges
of Fund shares during any 90-day period or purchases of shares
followed by a sale within 90 days will be identified by these
surveillance procedures. For purposes of these transaction
surveillance procedures, the Funds may consider trading activity in
multiple accounts under common ownership, control or influence.
Trading activity identified by either, or a combination, of these
factors, or as a result of any other information available at the
time, will be evaluated to determine whether such activity might
constitute excessive or short-term trading. These surveillance
procedures may be modified from time to time, as necessary or
appropriate to improve the detection of excessive or short-term
trading or to address specific circumstances, such as for certain
retirement plans, to conform to plan exchange limits or U.S.
Department of Labor regulations, or for certain automated or
pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.
o Account Blocking Procedures. If the Funds determine, in their sole
discretion, that a particular transaction or pattern of transactions
identified by the transaction surveillance procedures described above
is excessive or short-term trading in nature, the relevant Fund
account(s) will be immediately "blocked" and no future purchase or
exchange activity will be permitted. However, sales of Fund shares
back to a Fund or redemptions will continue to be permitted in
accordance with the terms of the Fund's current Prospectus. In the
event an account is blocked, certain account-related privileges, such
as the ability to place purchase, sale and exchange orders over the
internet or by phone, may also be suspended. A blocked account will
generally remain blocked unless and until the account holder or the
associated broker, dealer or other financial intermediary provides
evidence or assurance acceptable to the Fund that the account holder
did not or will not in the future engage in excessive or short-term
trading.
o Applications of Surveillance Procedures and Restrictions to Omnibus
Accounts. Omnibus account arrangements are common forms of holding
shares of the Funds, particularly among certain brokers, dealers and
other financial intermediaries, including sponsors of retirement plans
and variable insurance products. The Funds seek to apply their
surveillance procedures to these omnibus account arrangements. If an
intermediary does not have the capabilities, or declines, to provide
individual account level detail to the Funds, the Funds will monitor
turnover of assets to purchases and redemptions of the omnibus
account. If excessive turnover, defined as annualized purchases and
redemptions exceeding 50% of assets is detected, the Fund will notify
the intermediary and request that the intermediary review individual
account transactions for excessive or short-term trading activity and
confirm to the Fund that appropriate action has been taken to curtail
the activity, which may include applying blocks to accounts to
prohibit future purchases and exchanges of Fund shares. For certain
retirement plan accounts, the Funds may request that the retirement
plan or other intermediary revoke the relevant participant's privilege
to effect transactions in Fund shares via the internet or telephone,
in which case the relevant participant must submit future transaction
orders via the U.S. Postal Service (i.e., regular mail). The Fund will
continue to monitor the turnover attributable to an intermediary's
omnibus account arrangement and may consider whether to terminate the
relationship if the intermediary does not demonstrate that appropriate
action has been taken.
Risks to Shareholders Resulting From Imposition of Account Blocks in Response to
Excessive Short-term Trading Activity. A shareholder identified as having
engaged in excessive or short-term trading activity whose account is "blocked"
and who may not otherwise wish to redeem his or her shares effectively may be
"locked" into an investment in a Fund that the shareholder did not intend to
hold on a long-term basis or that may not be appropriate for the shareholder's
risk profile. To rectify this situation, a shareholder with a "blocked" account
may be forced to redeem Fund shares, which could be costly if, for example,
these shares have declined in value, the shareholder recently paid a front-end
sales charge or the shares are subject to a CDSC, or the sale results in adverse
tax consequences to the shareholder. To avoid this risk, a shareholder should
carefully monitor the purchases, sales and exchanges of Fund shares and avoid
frequent trading in Fund shares.
Limitations on Ability to Detect and Curtail Excessive Trading Practices.
Shareholders seeking to engage in excessive short-term trading activities may
deploy a variety of strategies to avoid detection and, despite the efforts of
the Funds and their agents to detect excessive or short duration trading in Fund
shares, there is no guarantee that the Funds will be able to identify these
shareholders or curtail their trading practices. In particular, the Funds may
not be able to detect excessive or short-term trading in Fund shares
attributable to a particular investor who effects purchase and/or exchange
activity in Fund shares through omnibus accounts. Also, multiple tiers of these
entities may exist, each utilizing an omnibus account arrangement, which may
further compound the difficulty of detecting excessive or short duration trading
activity in Fund shares.
How the Funds Value Their Shares
Each Fund's NAV is calculated at the close of regular trading on the Exchange
(ordinarily, 4:00 p.m., Eastern time), only on days when the Exchange is open
for business. To calculate NAV, a Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets, is divided by
the number of shares outstanding. If a Fund invests in securities that are
primarily traded on foreign exchanges that trade on weekends or other days when
the Fund does not price its shares, the NAV of the Fund's shares may change on
days when shareholders will not be able to purchase or redeem their shares in
the Fund.
The Funds value their securities at their current market value determined on the
basis of market quotations or, if market quotations are not readily available or
are unreliable, at "fair value" as determined in accordance with procedures
established by and under the general supervision of each Fund's Board of
Directors. When a Fund uses fair value pricing, it may take into account any
factors it deems appropriate. A Fund may determine fair value based upon
developments related to a specific security, current valuations of foreign stock
indices (as reflected in U.S. futures markets) and/or U.S. sector or broader
stock market indices. The prices of securities used by the Fund to calculate its
NAV may differ from quoted or published prices for the same securities. Fair
value pricing involves subjective judgments and it is possible that the fair
value determined for a security is materially different than the value that
could be realized upon the sale of that security.
Funds expect to use fair value pricing for securities primarily traded on U.S.
exchanges only under very limited circumstances, such as the early closing of
the exchange on which a security is traded or suspension of trading in the
security. Funds may use fair value pricing more frequently for securities
primarily traded in non-U.S. markets because, among other things, most foreign
markets close well before 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. For example, the Funds believe that foreign security values may be
affected by events that occur after the close of foreign securities markets. To
account for this, the Funds may frequently value many of their foreign equity
securities using fair value prices based on third party vendor modeling tools to
the extent available.
Subject to the Board's oversight, each Fund's Board has delegated responsibility
for valuing a Fund's assets to the Adviser. The Adviser has established a
Valuation Committee, which operates under the policies and procedures approved
by the Board, to value the Fund's assets on behalf of the Fund. The Valuation
Committee values Fund assets as described above.
Your order for purchase, sale or exchange of shares is priced at the
next-determined NAV after your order is received in proper form by the Fund.
MORE INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS
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This section of the Prospectus provided additional information about the Funds'
investment practices and risks. Most of these investment practices are
discretionary, which means that the Adviser may or may not decide to use them.
This Prospectus does not describe all of a Fund's investment practices and
additional descriptions of each Fund's strategies, investments, and risks can be
found in the Fund's SAI.
Derivatives Each Fund may, but is not required to, use derivatives for
risk management purposes or as part of its investment
strategies. Derivatives are financial contracts whose value
depends on, or is derived from, the value of an underlying
asset, reference rate or index. A Fund may use derivatives
to earn income and enhance returns, to hedge or adjust the
risk profile of a portfolio, to replace more traditional
direct investments and to obtain exposure to otherwise
inaccessible markets.
There are four principal types of derivatives, including
options, futures, forwards and swaps, which are described
below. Derivatives may be (i) standardized, exchange-traded
contracts or (ii) customized, privately-negotiated
contracts. Exchange-traded derivatives tend to be more
liquid and subject to less credit risk than those that are
privately negotiated.
A Fund's use of derivatives may involve risks that are
different from, or possibly greater than, the risks
associated with investing directly in securities or other
more traditional instruments. These risks include the risk
that the value of a derivative instrument may not correlate
perfectly, or at all, with the value of the assets,
reference rates, or indexes that they are designed to track.
Other risks include: the possible absence of a liquid
secondary market for a particular instrument and possible
exchange-imposed price fluctuation limits, either of which
may make it difficult or impossible to close out a position
when desired; the risk that adverse price movements in an
instrument can result in a loss substantially greater than
the Fund's initial investment in that instrument (in some
cases, the potential loss is unlimited); and the risk that
the counterparty will not perform its obligations.
The Funds may use the following types of derivatives.
o Forward Contracts. A forward contract is a customized,
privately negotiated agreement for one party to buy,
and the other party to sell, a specific quantity of an
underlying commodity or other tangible asset for an
agreed upon price at a future date. A forward contract
is either settled by physical delivery of the commodity
or tangible asset to an agreed-upon location at a
future date, rolled forward into a new forward contract
or, in the case of a non-deliverable forward, by a cash
payment at maturity. The Funds' investments in forward
contracts include the following.
--Forward Currency Exchange Contracts. A Fund may
purchase or sell currency exchange contracts to
minimize the risk from adverse changes in the
relationship between the U.S. Dollar and other
currencies. A Fund may enter into a forward
contract as transaction hedge (to "lock in" the
U.S. dollar price of a non-U.S. dollar security),
as position hedge (to protect the value of
securities the Fund owns that are denominated in a
foreign currency against substantial changes in
the value of the foreign currency) or as
cross-hedge (to protect the value of securities
the Fund owns that are denominated in a foreign
currency against substantial changes in the value
of that foreign currency by entering into a
forward contract for a different foreign currency
that is expected to change in the same direction
as the currency in which the securities are
denominated).
o Futures Contracts and Options on Futures Contracts. A
futures contract is an agreement that obligates the
buyer to buy and the seller to sell a specified
quantity of an underlying asset (or settle for cash the
value of a contract based on an underlying asset, rate
or index) at a specific price on the contract maturity
date. Options on futures contracts are options that
call for the delivery of futures contracts upon
exercise.
o Options. An option is an agreement that, for a premium
payment or fee, gives the option holder (the buyer) the
right but not the obligation to buy or sell the
underlying asset (or settle for cash an amount based on
an underlying asset, rate or index) at a specified
price (the exercise price) during a period of time or
on a specified date. Investments in options are
considered speculative. A Fund may lose the premium
paid for them if the price of the underlying security
or other asset decreased or remained the same (in the
case of a call option) or increased or remained the
same (in the case of a put option). If a put or call
option purchased by a Fund were permitted to expire
without being sold or exercised, its premium would
represent a loss to the Fund. The Funds' investments
include the following:
--Options on Foreign Currencies. A Fund invests in
options on foreign currencies that are privately
negotiated or traded on U.S. or foreign exchanges
for the purpose of protecting against declines in
the U.S. Dollar value of foreign currency
denominated securities held by a Fund and against
increases in the U.S. Dollar cost of securities to
be acquired. The purchase of an option on a
foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although
if rates move adversely, a Fund may forfeit the
entire amount of the premium plus related
transaction costs.
--Options on Securities. A Fund may purchase or
write a put or call option on securities. The Fund
will only exercise an option it purchased if the
price of the security was less (in the case of a
put option) or more (in the case of a call option)
than the exercise price. If the Fund does not
exercise an option, the premium it paid for the
option will be lost. Normally, a Fund will write
only "covered" options, which means writing an
option for securities the Fund owns, but may write
an uncovered call option for cross-hedging
purposes.
--Options on Securities Indices. An option on a
securities index is similar to an option on a
security except that, rather than taking or making
delivery of a security at a specified price, an
option on a securities index gives the holder the
right to receive, upon exercise of the option, an
amount of cash if the closing level of the chosen
index is greater than (in the case of a call) or
less than (in the case of a put) the exercise
price of the option.
o Swap Transactions. A swap is a customized, privately
negotiated agreement that obligates two parties to
exchange a series of cash flows at specified intervals
(payment dates) based upon or calculated by reference
to changes in specified prices or rates (interest rates
in the case of interest rate swaps, currency exchange
rates in the case of currency swaps) for a specified
amount of an underlying asset (the "notional" principal
amount). The Funds' investments in swap transactions
include the following:
--Credit Default Swap Agreements. The "buyer" in a
credit default swap contract is obligated to pay the
"seller" a periodic stream of payments over the term of
the contract in return for a contingent payment upon
the occurrence of a credit event with respect to an
underlying reference obligation. Generally, a credit
event means bankruptcy, failure to pay, obligation
acceleration or modified restructuring. A Fund may be
either the buyer or seller in the transaction. If a
Fund is a seller, the Fund receives a fixed rate of
income throughout the term of the contract, which
typically is between one month and five years, provided
that no credit event occurs. If a credit event occurs,
a Fund typically must pay the contingent payment to the
buyer, which is typically the "par value" (full
notional value) of the reference obligation. If a Fund
is a buyer and no credit event occurs, the Fund will
lose its periodic stream of payments over the term of
the contract. However, if a credit event occurs, the
buyer typically receives full notional value for a
reference obligation that may have little or no value.
The value of the reference obligation received by a
Fund coupled with the periodic payments previously
received may be less than the full notional value it
pays to the buyer, resulting in a loss of value to the
Fund.
Credit default swaps may involve greater risks than if
a Fund had invested in the reference obligation
directly. Credit default swaps are subject to general
market risk, liquidity risk and credit risk.
--Currency Swaps. Currency swaps involve the
individually negotiated exchange by a Fund with another
party of a series of payments in specified currencies.
A currency swap may involve the delivery at the end of
the exchange period of a substantial amount of one
designated currency in exchange for the other
designated currency. Therefore, the entire principal
value of a currency swap is subject to the risk that
the swap counterparty will default on its contractual
delivery obligations. If there is a default by the
counterparty to the transaction, the Fund will have
contractual remedies under the transaction agreements.
--Interest Rate Swaps, Caps, and Floors. Interest rate
swaps involve the exchange by a Fund with another party
of their respective commitments to pay or receive
interest (e.g., an exchange of floating rate payments
for fixed rate payments). Interest rate swaps are
entered into on a net basis (i.e., the two payment
streams are netted out, with the Fund receiving or
paying, as the case may be, only the net amount of the
two payments).
The purchase of an interest rate cap entitles the
purchaser, to the extent that a specified index exceeds
a predetermined interest rate, to receive payments of
interest on a contractually-based principal amount from
the party selling the interest rate cap. The purchase
of an interest rate floor entitles the purchaser, to
the extent that a specified index falls below a
predetermined interest rate, to receive payments of
interest on an agreed principal amount from the party
selling the interest rate floor. Caps and floors may be
less liquid than swaps.
Interest rate swap, cap, and floor transactions may be
used to preserve a return or spread on a particular
investment or a portion of a Fund's portfolio or
protecting against an increase in the price of
securities a Fund anticipates purchasing at a later
date. A Fund may enter into interest rate swaps, caps,
and floors on either an asset-based or liability-based
basis, depending upon whether it is hedging its assets
or liabilities. These transactions do not involve the
delivery of securities or other underlying assets or
principal.
Unless there is a counterparty default, the risk of
loss to a Fund from interest rate transactions is
limited to the net amount of interest payments that the
Fund is contractually obligated to make. If the
counterparty to an interest rate transaction defaults,
the Fund's risk of loss consists of the net amount of
interest payments that the Fund contractually is
entitled to receive.
o Other Derivative Investments
--Synthetic Foreign Equity Securities. The Funds may
invest in a form of synthetic foreign equity
securities, which may be referred to as international
warrants, local access products, participation notes,
or low exercise price warrants. International warrants
are financial instruments issued by banks or other
financial institutions, which may or may not be traded
on a foreign exchange. International warrants are a
form of derivative security that may give holders the
right to buy or sell an underlying security or a basket
of securities representing an index from or to the
issuer for a particular price or may entitle holders to
receive a cash payment relating to the value of the
underlying security or index. International warrants
are similar to options in that they are exercisable by
the holder for an underlying security or the value of
that security, but are generally exercisable over a
longer term than typical options. These types of
instruments may be American style exercise, which means
that they can be exercised at any time on or before the
expiration date of the international warrant, or
European style exercise, which means that they may be
exercised only on the expiration date. International
warrants have an exercise price, which is fixed when
the warrants are issued.
The Funds will normally invest in covered warrants,
which entitle the holder to purchase from the issuer
common stock of an international company or receive a
cash payment (generally in U.S. dollars). The cash
payment is calculated according to a predetermined
formula. The Funds may invest in low exercise price
warrants, which are warrants with an exercise price
that is very low relative to the market price of the
underlying instrument at the time of issue (e.g., one
cent or less). The buyer of a low exercise price
warrant effectively pays the full value of the
underlying common stock at the outset. In the case of
any exercise of warrants, there may be a time delay
between the time a holder of warrants gives
instructions to exercise and the time the price of the
common stock relating to exercise or the settlement
date is determined, during which time the price of the
underlying security could change significantly. In
addition, the exercise or settlement date of the
warrants may be affected by certain market disruption
events, such as difficulties relating to the exchange
of a local currency into U.S. dollars, the imposition
of capital controls by a local jurisdiction or changes
in the laws relating to foreign investments. These
events could lead to a change in the exercise date or
settlement currency of the warrants, or postponement of
the settlement date. In some cases, if the market
disruption events continue for a certain period of
time, the warrants may become worthless resulting in a
total loss of the purchase price of the warrants.
The Funds will acquire covered warrants issued by
entities deemed to be creditworthy by the Adviser, who
will monitor the credit-worthiness of the issuers on an
on-going basis. Investments in these instruments
involve the risk that the issuer of the instrument may
default on its obligation to deliver the underlying
security or cash in lieu thereof. These instruments may
also be subject to liquidity risk because there may be
a limited secondary market for trading the warrants.
They are also subject, like other investments in
foreign securities, to foreign risk and currency risk.
Convertible Prior to conversion, convertible securities have the same
Securities general characteristics as non-convertible debt securities,
which generally provide a stable stream of income with
generally higher yields than those of equity securities of
the same or similar issuers. The price of a convertible
security will normally vary with changes in the price of the
underlying equity security, although the higher yield tends
to make the convertible security less volatile than the
underlying equity security. As with debt securities, the
market value of convertible securities tends to decrease as
interest rates rise and increase as interest rates decline.
While convertible securities generally offer lower interest
or dividend yields than non-convertible debt securities of
similar quality, they offer investors the potential to
benefit from increases in the market prices of the
underlying common stock. Convertible debt securities that
are rated Baa3 or lower by Moody's or BBB- or lower by S&P
or Fitch and comparable unrated securities may share some or
all of the risks of debt securities with those ratings.
Depositary Each Fund may invest in depositary receipts. Depositary
Receipts receipts may not necessarily be denominated in the same
and Securities currency as the underlying securities into which they may of
Supranational be converted. In addition, the issuers of the stock of
Entities unsponsored depositary receipts are not obligated to
disclose material information in the United States and,
therefore, there may not be a correlation between such
information and the market value of the depositary receipts.
ADRs are depositary receipts typically issued by an U.S.
bank or trust company that evidence ownership of underlying
securities issued by a foreign corporation. GDRs, EDRs and
other types of depositary receipts are typically issued by
non-U.S. banks or trust companies and evidence ownership of
underlying securities issued by either a U.S. or a non-U.S.
company. Generally, depositary receipts in registered form
are designed for use in the U.S. securities markets, and
depositary receipts in bearer form are designed for use in
securities markets outside of the United States. For
purposes of determining the country of issuance, investments
in depositary receipts of either type are deemed to be
investments in the underlying securities.
A supranational entity is an entity designated or supported
by the national government of one or more countries to
promote economic reconstruction or development. Examples of
supranational entities include the World Bank (International
Bank for Reconstruction and Development) and the European
Investment Bank. A European Currency Unit is a basket of
specified amounts of the currencies of the member states of
the European Economic Community. "Semi-governmental
securities" are securities issued by entities owned by
either a national, state or equivalent government or are
obligations of one of such government jurisdictions that are
not backed by its full faith and credit and general taxing
powers.
Forward Forward commitments for the purchase or sale of securities
Commitments may include purchases on a when-issued basis or purchases or
sales on a delayed delivery basis. In some cases, a forward
commitment may be conditioned upon the occurrence of a
subsequent event, such as approval and consummation of a
merger, corporate reorganization or debt restructuring or
approval of a proposed financing by appropriate authorities
(i.e., a "when, as and if issued" trade).
When forward commitments with respect to fixed-income
securities are negotiated, the price, which is generally
expressed in yield terms, is fixed at the time the
commitment is made, but payment for and delivery of the
securities take place at a later date. Securities purchased
or sold under a forward commitment are subject to market
fluctuation and no interest or dividends accrues to the
purchaser prior to the settlement date. The use of forward
commitments helps a Fund to protect against anticipated
changes in interest rates and prices.
Illiquid Under current SEC Guidelines, the Funds limit their
Securities investments in illiquid securities to 15% of their net
assets. The term "illiquid securities" for this purpose
means securities that cannot be disposed of within seven
days in the ordinary course of business at approximately the
amount a Fund has valued the securities. A Fund that invests
in illiquid securities may not be able to sell such
securities and may not be able to realize their full value
upon sale. Restricted securities (securities subject to
legal or contractual restrictions on resale) may be
illiquid. Some restricted securities (such as securities
issued pursuant to Rule 144A under the Securities Act of
1933 or certain commercial paper) may be treated as liquid,
although they may be less liquid than registered securities
traded on established secondary markets.
Investment Subject to the restrictions and limitations of the 1940 Act,
in Other each Fund may invest in other investment companies whose
Investment investment objectives and policies are substantially similar
Companies to those of the Fund. If a Fund acquires shares in
investment companies, shareholders would bear indirectly,
the expenses of such investment companies (including
management and advisory fees), which are in addition to the
Fund's expenses. A Fund may also invest in exchange traded
funds, subject to the restrictions and limitations of the
1940 Act.
Loans of For the purposes of achieving income, each Fund may make
Portfolio secured loans of portfolio securities to brokers, dealers
Securities and financial institutions, provided a number of conditions
are satisfied, including that the loan is fully
collateralized. Securities lending involves the possible
loss of rights in the collateral or delay in the recovery of
collateral if the borrower fails to return the securities
loaned or becomes insolvent. When a fund lends securities,
its investment performance will continue to reflect changes
in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. The Fund
may pay reasonable finders', administrative, and custodial
fees in connection with a loan.
Repurchase Each Fund may enter into repurchase agreements in which a
Agreements Fund purchases a security from a bank or broker-dealer,
which agrees to repurchase the security from the Fund at an
agreed-upon future date, normally a day or a few days later.
The resale price is greater than the purchase price,
reflecting an agreed-upon interest rate for the period the
buyer's money is invested in the security. Such agreements
permit a Fund to keep all of its assets at work while
retaining "overnight" flexibility in pursuit of investments
of a longer-term nature. If the bank or broker-dealer
defaults on its repurchase obligation, a Fund would suffer a
loss to the extent that the proceeds from the sale of the
security were less than the repurchase price.
Rights Rights and warrants are option securities permitting their
and Warrants holders to subscribe for other securities. Rights are
similar to warrants except that they have a substantially
shorter duration. Rights and warrants do not carry with them
dividend or voting rights with respect to the underlying
securities, or any rights in the assets of the issuer. As a
result, an investment in rights and warrants may be
considered more speculative than certain other types of
investments. In addition, the value of a right or a warrant
does not necessarily change with the value of the underlying
securities, and a right or a warrant ceases to have value if
it is not exercised prior to its expiration date.
Short Sales A Fund may make short sales a part of overall portfolio
management or to offset Short Sales a potential decline in
the value of a security. A short sale involves the sale of a
security that a Fund does not own, or if the Fund owns the
security, is not to be delivered upon consummation of the
sale. When the Fund makes a short sale of a security that it
does not own, it must borrow from a broker-dealer the
security sold short and deliver the security to the
broker-dealer upon conclusion of the short sale.
If the price of the security sold short increases between
the time of the short sale and the time a Fund replaces the
borrowed security, the Fund will incur a loss; conversely,
if the price declines, the Fund will realize a short-term
capital gain. Although a Fund's gain is limited to the price
at which it sold the security short, its potential loss is
theoretically unlimited.
Standby Standby commitment agreements are similar to put options
Commitment that commit a Fund, for a stated period of time, to purchase
Agreements a stated amount of a security that may be issued and sold to
the Fund at the option of the issuer. The price and coupon
of the security are fixed at the time of the commitment. At
the time of entering into the agreement, the Fund is paid a
commitment fee, regardless of whether the security
ultimately is issued. The Funds will enter into such
agreements only for the purpose of investing in the security
underlying the commitment at a yield and price considered
advantageous to the Fund and unavailable on a firm
commitment basis.
There is no guarantee that a security subject to a standby
commitment will be issued. In addition, the value of the
security, if issued, on the delivery date may be more or
less than its purchase price. Since the issuance of the
security is at the option of the issuer, a Fund will bear
the risk of capital loss in the event the value of the
security declines and may not benefit from an appreciation
in the value of the security during the commitment period if
the issuer decides not to issue and sell the security to the
Fund.
Zero-Coupon and Zero-coupon bonds are issued at a significant discount from
Payment-in-Kind their principal amount in lieu of paying interest
Bonds periodically. Payment-in-kind bonds allow the issuer to make
current interest payments on the bonds in additional bonds.
Because zero-coupon bonds and payment-in-kind bonds do not
pay current interest in cash, their value is generally
subject to greater fluctuation in response to changes in
market interest rates than bonds that pay interest in cash
currently. Both zero-coupon and payment-in-kind bonds allow
an issuer to avoid the need to generate cash to meet current
interest payments. These bonds may involve greater credit
risks than bonds paying interest currently. Although these
bonds do not pay current interest in cash, a Fund is
nonetheless required to accrue interest income on such
investments and to distribute such amounts at least annually
to shareholders. Thus, a Fund could be required at times to
liquidate other investments in order to satisfy its dividend
requirements.
Foreign Investing in foreign securities involves special risks and
(Non-U.S.) considerations not typically associated with investing in
Securities U.S. securities. The securities markets of many foreign
countries are relatively small, with the majority of market
capitalization and trading volume concentrated in a limited
number of companies representing a small number of
industries. A Fund that invests in foreign securities may
experience greater price volatility and significantly lower
liquidity than a portfolio invested solely in securities of
U.S. companies. These markets may be subject to greater
influence by adverse events generally affecting the market,
and by large investors trading significant blocks of
securities, than is usual in the United States.
Securities registration, custody, and settlements may in
some instances be subject to delays and legal and
administrative uncertainties. Foreign investment in the
securities markets of certain foreign countries is
restricted or controlled to varying degrees. These
restrictions or controls may at times limit or preclude
investment in certain securities and may increase the cost
and expenses of a Fund. In addition, the repatriation of
investment income, capital or the proceeds of sales of
securities from certain of the countries is controlled under
regulations, including in some cases the need for certain
advance government notification or authority, and if a
deterioration occurs in a country's balance of payments, the
country could impose temporary restrictions on foreign
capital remittances.
A Fund also could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application to it of other
restrictions on investment. Investing in local markets may
require a Fund to adopt special procedures or seek local
governmental approvals or other actions, any of which may
involve additional costs to a Fund. These factors may affect
the liquidity of a Fund's investments in any country and the
Adviser will monitor the effect of any such factor or
factors on a Fund's investments. Transaction costs including
brokerage commissions for transactions both on and off the
securities exchanges in many foreign countries are generally
higher than in the U.S.
Issuers of securities in foreign jurisdictions are generally
not subject to the same degree of regulation as are U.S.
issuers with respect to such matters as insider trading
rules, restrictions on market manipulation, shareholder
proxy requirements, and timely disclosure of information.
The reporting, accounting, and auditing standards of foreign
countries may differ, in some cases significantly, from U.S.
standards in important respects, and less information may be
available to investors in foreign securities than to
investors in U.S. securities. Substantially less information
is publicly available about certain non-U.S. issuers than is
available about most U.S. issuers.
The economies of individual foreign countries may differ
favorably or unfavorably from the U.S. economy in such
respects as growth of gross domestic product or gross
national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position.
Nationalization, expropriation or confiscatory taxation,
currency blockage, political changes, government regulation,
political or social instability, revolutions, wars or
diplomatic developments could affect adversely the economy
of a foreign country. In the event of nationalization,
expropriation, or other confiscation, a Fund could lose its
entire investment in securities in the country involved. In
addition, laws in foreign countries governing business
organizations, bankruptcy and insolvency may provide less
protection to security holders such as the Fund than that
provided by U.S. laws.
Investments in securities of companies in emerging markets
involve special risks. There are approximately 100 countries
identified by the World Bank as Low Income, Lower Middle
Income and Upper Middle Income countries that are generally
regarded as Emerging Markets. Emerging market countries that
the Adviser currently considers for investment are listed
below. Countries may be added to or removed from this list
at any time.
Algeria Hungary Qatar
Argentina India Romania
Belize Indonesia Russia
Brazil Israel Slovakia
Bulgaria Jamaica Slovenia
Chile Jordan South Africa
China Kazakhstan South Korea
Colombia Lebanon Taiwan
Costa Rica Malaysia Thailand
Cote D'Ivoire Mexico Trinidad & Tobago
Croatia Morocco Tunisia
Czech Republic Nigeria Turkey
Ecuador Pakistan Ukraine
Egypt Panama Uruguay
El Salvador Peru Venezuela
Guatemala Philippines
Dominican Republic Poland
Investing in emerging market securities imposes risks
different from, or greater than, risks of investing in
domestic securities or in foreign, developed countries.
These risks include: smaller market capitalization of
securities markets, which may suffer periods of relative
illiquidity; significant price volatility; restrictions on
foreign investment; possible repatriation of investment
income and capital. In addition, foreign investors may be
required to register the proceeds of sales; future economic
or political crises could lead to price controls, forced
mergers, expropriation or confiscatory taxation, seizure,
nationalization, or creation of government monopolies. The
currencies of emerging market countries may experience
significant declines against the U.S. dollar, and
devaluation may occur subsequent to investments in these
currencies by a Fund. Inflation and rapid fluctuations in
inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging markets securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in
the economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies
that are newly organized and small; differences in auditing
and financial reporting standards, which may result in
unavailability of material information about issuers; and
less developed legal systems. In addition, emerging
securities markets may have different clearance and
settlement procedures, which may be unable to keep pace with
the volume of securities transactions or otherwise make it
difficult to engage in such transactions. Settlement
problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio
security. Such a delay could result in possible liability to
a purchaser of the security.
Investment in The AllianceBernstein International Growth Fund's
Privatized investments include investments in securities of companies
Enterprises by that are established as a result of privatizations of state
AllianceBernstein enterprises. These investments may be in the initial
International offering of publicly traded equity securities of a
Growth government- or state-owned or controlled company or
Fund enterprise, through the purchase of securities of a current
or former state enterprise following its initial equity
offering, or through the privately negotiated purchases of
stock or other equity interests in a state enterprise that
has not yet conducted an initial equity offering. Because
privatizations are integral to a country's economic
restructuring, securities sold in initial equity offerings
may be particularly attractive investments since they often
are priced attractively to secure the issuer's successful
transition to private sector ownership.
In certain jurisdictions, the ability of foreign entities,
such as the Fund, to participate in privatizations may be
limited by local law, or the price or terms on which the
Fund may be able to participate may be less advantageous
than for local investors. There can be no assurance that
proposed privatizations will be successful or that
governments will not re-nationalize enterprises that have
been privatized. Furthermore, large blocks of the stock of
certain of these enterprises may be held by a small group of
stockholders, after the initial equity offerings by those
enterprises. The sale of some portion or all of those blocks
could have an adverse effect on the price of the stock of
any such enterprise.
Foreign A Fund that invests some portion of its assets in securities
(Non-U.S.) denominated in, and receives revenues in, foreign currencies
Currencies will be adversely affected by reductions in the value of
those currencies relative to the U.S. Dollar. Foreign
currency exchange rates may fluctuate significantly. They
are determined by supply and demand in the foreign exchange
markets, the relative merits of investments in different
countries, actual or perceived changes in interest rates,
and other complex factors. Currency exchange rates also can
be affected unpredictably by intervention (or the failure to
intervene) by U.S. or foreign governments or central banks
or by currency controls or political developments. In light
of these risks, a Fund may engage in certain currency
hedging transactions, as described above, which involve
certain special risks.
Investment in A Fund may invest in smaller, emerging companies. Investment
Smaller, in such companiesinvolves greater risks than is customarily
Less-Seasoned associated with securities of more established companies.
Companies Companies in the earlier stages of their development often
have products and management personnel which have not been
thoroughly tested by time or the marketplace; their
financial resources may not be as substantial as those of
more established companies. The securities of smaller
companies may have relatively limited marketability and may
be subject to more abrupt or erratic market movements than
securities of larger companies or broad market indices. The
revenue flow of such companies may be erratic and their
results of operations may fluctuate widely and may also
contribute to stock price volatility.
Future A Fund may, following written notice to its shareholders,
Developments take advantage of other investment practices that are not
currently contemplated for use by the Fund, or are not
available but may yet be developed, to the extent such
investment practices are consistent with the Fund's
investment objective and legally permissible for the Fund.
Such investment practices, if they arise, may involve risks
that exceed those involved in the activities described
above.
Changes in A Fund's Board of Directors may change a Fund's investment
Investment objective without shareholder approval. The Fund will
Objectives and provide shareholders with 60 days' prior written notice of
Policies any change to the Fund's investment objective. Unless
otherwise noted, all other investment policies of a Fund may
be changed without shareholder approval. The successful use
of the investment practices described above draws upon the
General Adviser's special skills and experience and usually depends
on the Adviser's ability to forecast price movements,
interest rates, or currency exchange rate movements
correctly. Should interest rates, prices or exchange rates
move unexpectedly, a Fund may not achieve the anticipated
benefits of the transactions or may realize losses and thus
be in a worse position than if such strategies had not been
used. Unlike many exchange-traded futures contracts and
options on futures contracts, there are no daily price
fluctuation limits for certain options on currencies and
forward contracts, and adverse market movements could
therefore continue to an unlimited extent over a period of
time. In addition, the correlation between movements in the
prices of such instruments and movements in the prices of
the securities and currencies hedged or used for cover will
not be perfect and could produce unanticipated losses.
Portfolio The portfolio turnover rate for each Fund is included in the
Turnover Financial Highlights section. The Funds are actively managed
and, in some cases in response to market conditions, a
Fund's portfolio turnover may exceed 100%. A higher rate of
portfolio turnover increases brokerage and other expenses,
which must be borne by the Fund and its shareholders. High
portfolio turnover also may result in the realization of
substantial net short-term capital gains, which, when
distributed, are taxable to shareholders.
Temporary For temporary defensive purposes in an attempt to respond to
Defensive adverse market, economic, political or other conditions,
Position each Fund may reduce its position in equity securities and
invest in, without limit, certain types of short-term,
liquid, high grade or high-quality (depending on the Fund)
debt securities. While the Funds are investing for temporary
defensive purposes, they may not meet their investment
objectives.
Portfolio The Adviser publishes a complete schedule of the portfolio
Holdings holdings for the AllianceBernstein Growth Funds monthly on
www.AllianceBernstein.com (click on "US Investors &
Financial Advisors" then "Investment Solutions - Mutual
Funds"). The Adviser posts the schedule on the website as of
the last day of each calendar month, approximately 30 days
after the end of that month. This posted information
generally remains accessible on the website for three
months. In addition, the Adviser may post information about
the number of securities a Fund holds, a summary of the
Fund's top ten holdings (including name and the percentage
of the Fund's assets invested in each holding), and a
percentage breakdown of the fund's investments by country,
sector and industry, as applicable. Each Fund's SAI includes
a description of the policies and procedures that apply to
disclosure of the Fund's portfolio holdings.
MANAGEMENT OF THE FUNDS
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INVESTMENT ADVISER
Each Fund's Adviser is AllianceBernstein L.P., 1345 Avenue of the Americas, New
York, NY 10105. The Adviser is a leading international investment adviser
supervising client accounts with assets as of June 30, 2006 totaling
approximately $625 billion (of which approximately $88 billion represented
assets of investment companies). As of June 30, 2006, the Adviser managed
retirement assets for many of the largest public and private employee benefit
plans (including 41 of the nation's FORTUNE 100 companies), for public employee
retirement funds in 37 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 45 registered
investment companies managed by the Adviser, comprising 126 separate investment
portfolios, currently have approximately 4.0 million shareholder accounts.
The Adviser provides investment advisory services and order placement facilities
for the Funds. For these advisory services, each of the Funds paid the Adviser
during its most recent fiscal year, a percentage of average daily net assets as
follows:
Fee as a percentage of Fiscal
Fund average daily net assets* Year Ended
---- ------------------------- ----------
AllianceBernstein Large
Cap Growth Fund [_____]% 7/31/06
AllianceBernstein Growth Fund [_____]% 7/31/06
AllianceBernstein Mid-Cap Growth Fund [_____]% 7/31/06
AllianceBernstein Small
Cap Growth Portfolio [_____]% 7/31/06
AllianceBernstein Global
Technology Fund [_____]% 7/31/06
AllianceBernstein Global
Health Care Fund [_____]% 6/30/06
AllianceBernstein Global
Research Growth Fund [_____]% 6/30/06
AllianceBernstein International
Research Growth Fund [_____]% 7/31/06
AllianceBernstein International
Growth Fund [_____]% 6/30/06
----------
* Fee stated net of any waivers and/or reimbursements. See "Fees and Expenses
of the Funds" at the beginning of the Prospectus for more information about
fee waivers.
A discussion regarding the basis for the Board of Directors' approval of each
Fund's investment advisory agreement is available in the Fund's annual report to
shareholders for the fiscal year ended shown in the table above.
The Adviser may act as an investment adviser to other persons, firms or
corporations, including investment companies, hedge funds, pension funds and
other institutional investors. The Adviser may receive management fees,
including performance fees, that may be higher or lower than the advisory fees
it receives from the Funds. Certain other clients of the Adviser may have
investment objectives and policies similar to those of a Fund. The Adviser may,
from time to time, make recommendations which result in the purchase or sale of
a particular security by its other clients simultaneously with a Fund. If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price or quantity. It is the policy of
the Adviser to allocate advisory recommendations and the placing of orders in a
manner that is deemed equitable by the Adviser to the accounts involved,
including the Funds. When two or more of the clients of the Adviser (including a
Fund) are purchasing or selling the same security on a given day from the same
broker-dealer, such transactions may be averaged as to price.
PORTFOLIO MANAGERS
The day-to-day management of and investment decisions for the AllianceBernstein
Large Cap Growth Fund are made by the Adviser's U.S. Large Cap Growth Investment
Team. The U.S. Large Cap Growth Investment Team relies heavily on the
fundamental analysis and research of the Adviser's large internal research
staff.
The following table lists the senior members of the U.S. Large Cap Growth
Investment Team with the responsibility for day-to-day management of the Fund's
portfolio, the year that each person assumed joint and primary responsibility
for the Fund, and each person's principal occupation during the past five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
James G. Reilly; since 2006; Executive Vice President of the Adviser
Executive Vice President of with which he has been associated since
the Adviser prior to 2001. Mr. Reilly has been a
member of the U.S. Large Cap Growth
Investment Team since 1988.
David P. Handke, Jr.; since Senior Vice President of the Adviser
2006; Senior Vice President with which he has been associated since
of the Adviser prior to 2001. Mr. Handke has been a
member of the U.S. Large Cap Growth
Investment Team since 1984.
Scott Wallace; since 2006; Senior Vice President of the Adviser
Senior Vice President of with which he has been associated since
the Adviser prior to 2001. Mr. Wallace has been a
member of the U.S. Large Cap Growth
Investment Team since 2001.
Michael J. Reilly; since 2006; Senior Vice President of the Adviser
Senior Vice President of with which he has been associated since
the Adviser prior to 2001. Mr. Reilly has been a
member of the U.S. Large Cap Growth
Investment Team since 1992.
Syed J. Hasnain; since 2006; Senior Vice President of the Adviser
Senior Vice President of the with which he has been associated since
Adviser prior to 2001. Mr. Hasnain has been a
member of the U.S. Large Cap Growth
Investment Team since 1994.
The day-to-day management of and investment decisions for the AllianceBernstein
Growth Fund are made by the Adviser's U.S. Growth Team. The U.S. Growth Team
relies heavily on the fundamental analysis and research of the Adviser's large
internal research staff.
The following table lists the senior members of the U.S. Growth Team with the
responsibility for day-to-day management of the Fund's portfolio, the year that
each person assumed joint and primary responsibility for the Fund, and each
person's principal occupation during the past five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
Alan Levi; since 2000; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since prior to 2001.
Mr. Levi is the team leader of the U.S.
Growth Team since 2002 and was formerly
head of growth research at the Adviser.
Jack Plym; since 2006; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since prior to 2001.
Bill Baird; since 2006; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since prior to 2001.
Robert Ginsberg; since 2006; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
The day-to-day management of and investment decisions for the AllianceBernstein
Mid-Cap Growth Fund are made by the Adviser's U.S. Mid Cap Growth Team. The U.S.
Mid Cap Growth Team relies heavily on the fundamental analysis and research of
the Adviser's large internal research staff.
The following table lists the senior members of the U.S. Mid Cap Growth Team
with the responsibility for day-to-day management of the Fund's portfolio, the
year that each person assumed joint and primary responsibility for the Fund, and
each person's principal occupation during the past five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
Catherine Wood; since 2002; Senior Vice President of the Adviser
Senior Vice President with which she has been associated in a
of the Adviser substantially similar capacity to her
current position since 2001. Prior
thereto, she was a general partner and
portfolio manager with Tupelo Capital
Management.
John Fogarty; since 2006; Senior Vice President of the Adviser
Senior Vice President since 2006. Prior thereto he was a hedge
of the Adviser fund manager at Dialectic Capital and
Vardon Partners since 2003. Prior
thereto, he was a U.S. Large Cap Growth
Portfolio manager with the Adviser since
prior to 2001.
Amy Raskin; since 2006; Senior Vice President of the Adviser
Senior Vice President with which she has been associated in a
of the Adviser substantially similar capacity to her
current position since prior to 2001.
Tom Zottner; since 2006; Vice President of the Adviser with which
Vice President of he has been associated in a
the Adviser substantially similar capacity to his
current position since March 2001.
Ben Ruegsegger; since 2006; Assistant Vice President of the Adviser
Assistant Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since 2001.
The management of and investment decisions for the AllianceBernstein Small Cap
Growth Portfolio's portfolio are made by the Adviser's team of research sector
heads (the "Small Cap Growth Investment Team"). The Small Cap Growth Investment
Team relies heavily on the fundamental analysis and research of the Adviser's
large internal research staff. No one person is principally responsible for
making recommendations for the Fund's portfolio.
The following table lists the persons within the Small Cap Growth Investment
Team with the most significant responsibility for the day-to-day management of
the AllianceBernstein Small Cap Growth Portfolio, the length of time that each
person has been responsible for the Fund, and each person's principal occupation
during the past five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
Bruce K. Aronow; since 1999; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since prior to 2001.
Kumar Kirpalani; since 2004; Vice President of the Adviser with which
Vice President of the Adviser he has been associated in a
substantially similar capacity to his
current position since prior to 2001.
Samantha Lau; since 2004; Senior Vice President of the Adviser
Senior Vice President of with which she has been associated in a
the Adviser substantially similar capacity to her
current position since prior to 2001.
Wen-Tse Tseng; since 2006; Vice President of the Adviser with which
Vice President of the Adviser he has been associated since March 2006.
Prior thereto, he was the
healthcare-sector portfolio manager for
the small-cap growth team at William D.
Witter since 2003. He also worked at
Weiss, Peck and Greer, managing the
health care sector with the same team
with which he worked at William D.
Witter, from April 2002 to August 2003.
Prior thereto he was a senior healthcare
analyst at JP Morgan Fleming Asset
Management since prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
Global Technology Fund's portfolio are made by Ms. Janet Walsh, Senior Vice
President of the Adviser. Ms. Walsh is a member of the Adviser's Global
Technology Research Team that collaborates actively on the management of the
Adviser's technology portfolios. In addition, Ms. Walsh relies heavily on the
fundamental analysis and research of the Adviser's large internal research
staff. Ms. Walsh has been responsible for the Fund's investments since 2003, and
has been with the firm in a substantially similar capacity to her current
position since prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
Global Health Care Fund's portfolio are made by Mr. Norman Fidel, Senior Vice
President of the Adviser. Mr. Fidel is a member of the Adviser's Global Health
Care Research Team that collaborates actively on the management of the Adviser's
health care portfolios. In addition, Mr. Fidel relies heavily on the fundamental
analysis and research of the Adviser's large internal research staff. Mr. Fidel
has been responsible for the Fund's investments since the Fund's inception, and
has been with the firm in a substantially similar capacity to his current
position since prior to 2001.
The day-to-day management and investment decisions for the AllianceBernstein
Global Research Growth Fund are made by the Adviser's Global Research Growth
research sector heads, with oversight by the Adviser's Global Research Growth
Portfolio Oversight Group.
Stock selection within each market sector of the Fund's portfolio is the
responsibility of a research sector head for that sector. The research sector
heads rely heavily on the fundamental analysis and research of the Adviser's
industry-focused equity analysts in the U.S. and abroad.
The Adviser's Global Research Growth Portfolio Oversight Group, comprised of
senior investment professionals, in consultation with the Global Research Growth
research sector heads, is responsible for determining the market sectors into
which the Fund's assets are invested and the percentage allocation into each
sector.
The following table lists the research sector heads with the responsibility for
the day-to-day management of the AllianceBernstein Global Research Growth Fund's
portfolio, the length of time that each person has been jointly and primarily
responsible for the Fund, and each person's principal occupation during the past
five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
Norman M. Fidel; since Senior Vice President of the Adviser
inception; Senior Vice with which he has been associated in a
President of the Adviser substantially similar capacity to his
current position since prior to 2001.
Jane E. Schneirov; since Senior Vice President of the Adviser
inception; Senior Vice with which she has been associated in a
President of the Adviser substantially similar capacity to her
current position since prior to 2001.
Scott E. McElroy; since 2006; Senior Vice President of the Adviser
Senior Vice President with which he has been associated in a
of the Adviser substantially similar capacity to his
current position since prior to 2001.
Janet A. Walsh; since Senior Vice President of the Adviser
inception; Senior Vice with which she has been associated in a
President of the Adviser substantially similar capacity to her
current position since prior to 2001.
Thomas A. Schmitt; since Senior Vice President of the Adviser
inception; Senior Vice with which he has been associated in a
President of the Adviser substantially similar capacity to his
current position since prior to 2001.
Francis X. Suozzo; since Senior Vice President of the Adviser
inception; Senior Vice with which he has been associated in a
President of the Adviser substantially similar capacity to his
current position since prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
International Research Growth Fund's portfolio are made by the Adviser's
International Research Growth research sector heads, with oversight by the
Adviser's International Research Growth Portfolio Oversight Group. Stock
selection within each market sector of the Fund's portfolio is the
responsibility of a research sector head for that sector. The research sector
heads rely heavily on the fundamental analysis and research of the Adviser's
industry-focused equity analysts abroad. The Adviser's International Research
Growth Oversight Group, comprised of senior investment professionals, in
consultation with the International Research Growth research sector heads, is
responsible for determining the market sectors into which the Fund's assets are
invested and the percentage allocation into each sector.
The following table lists the research sector heads with the most significant
responsibility for the day-to-day management of the Fund's portfolio, the length
of time that each person has been jointly and primarily responsible for the
Fund, and each person's principal occupation during the past five years:
Principal Occupation
Employee; Year; Title During The Past Five (5) Years
--------------------- ------------------------------
Hiromitsu Agata; since Senior Vice President of
May 2005; Senior Vice AllianceBernstein Japan Ltd. with which
President of he has been associated in a
AllianceBernstein Japan Ltd. substantially similar capacity to his
current position since prior to 2001.
Isabel Buccellati; since May Vice President of ABL with which she has
2005; Vice President of been associated in a substantially
AllianceBernstein Limited ("ABL") similar capacity to her current position
since prior to 2001.
William Johnston; since Senior Vice President of ABL with which
May 2005; Senior Vice he has been associated in a
President of ABL substantially similar capacity to his
current position since prior to 2001.
Michele Patri; since May 2005; Vice President of ABL and a Non- US
Vice President of ABL Developed Analyst since April 2001.
Prior thereto, he was a portfolio
manager at Citigroup Asset Manager in
London since prior to 2001.
Thomas A. Schmitt; since Senior Vice President of the Adviser
May 2005; Senior Vice with which he has been associated in a
President of the Adviser substantially similar capacity to his
current position since prior to 2001.
Valli Srikanthapalan; since Senior Vice President of ABL with which
May 2005; Senior Vice she has been associated since prior to
President of ABL 2001.
Atsushi Yamamoto; since Senior Vice President of
May 2005; Senior Vice President AllianceBernstein Japan Ltd. with which
of AllianceBernstein Japan Ltd. he has been associated in a
substantially similar capacity to his
current position since prior to 2001.
The management of, and investment decisions for, the AllianceBernstein
International Growth Fund's portfolio are made by the International Growth
Portfolio Oversight Group, comprised of senior members of the Global Emerging
Markets Growth Investment Team and the International Large Cap Growth Investment
Team. Each Investment Team relies heavily on the fundamental analysis and
research of the Adviser's large internal research staff. No one person is
principally responsible for making recommendations for the Fund's portfolio.
The following table lists the persons within the Global Emerging Markets Growth
Investment Team and the International Large Cap Growth Investment Team with the
most significant responsibility for the day-to-day management of the Fund's
portfolio, the length of time that each person has been jointly and primarily
responsible for the Fund, and each person's principal occupation during the past
five years:
Employee; Year; Title; Principal Occupation
Underlying Investment Team During The Past Five (5) Years
-------------------------- ------------------------------
Michael Levy; since 2003; Senior Vice President of ABL with which
Senior Vice President of ABL; he has been associated in a
Global Emerging Growth Investment substantially similar capacity to his
Team current position since prior to 2001.
Edward Baker III; since 2002; Senior Vice President and Chief
Senior Vice President of the Investment Officer-Emerging Markets of
Adviser; Global Emerging Growth the Adviser with which he has been
Investment Team associated in a substantially similar
capacity to his current position since
prior to 2001.
Christopher Toub; since May 2005; Executive Vice President of the Adviser;
Executive Vice President of the with which he has been associated in a
Adviser; International Large Cap substantially similar capacity to his
Growth Investment Team current position since prior to 2001.
Greg Eckersley; since 2006; Senior Vice President of the Adviser
Senior Vice President of the with which he has been associated in a
Adviser; International Large substantially similar capacity to his
Cap Growth Investment Team current position since prior to 2001.
Bob Scheetz; since 2006; Senior Vice President of the Adviser
Senior Vice President of the with which he has been associated in a
Adviser; International Large substantially similar capacity to his
Cap Growth Investment Team current position since prior to 2001.
PERFORMANCE OF SIMILARLY MANAGED ACCOUNTS
Institutional accounts. In addition to its support in managing the assets of
AllianceBernstein Large Cap Growth Fund, the Large Cap Growth team currently has
ultimate responsibility for the management of discretionary tax-exempt accounts
of institutional clients managed as described below without significant
client-imposed restrictions ("Historical Portfolios"). These accounts have
substantially the same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and techniques as
those for AllianceBernstein Large Cap Growth Fund. The Historical Portfolios are
not subject to certain limitations, diversification requirements and other
restrictions imposed under the 1940 Act and the Code to which AllianceBernstein
Large Cap Growth Fund, as a registered investment company, is subject and which,
if applicable to the Historical Portfolios, may have adversely affected the
performance results of the Historical Portfolios.
Set forth below is performance data provided by the Adviser relating to the
Historical Portfolios for the period during which the Large Cap Growth Team has
managed the Historical Portfolios. As of June 30, 2006 the assets in the
Historical Portfolios totaled approximately $20,170 million from 148 accounts.
Each Historical Portfolio has a nearly identical composition of investment
holdings and related percentage weightings.
The performance data is net of the maximum fee charged to any single account in
the composite (0.75%), which is a lower fee than the advisory fee historically
associated with an investment in the Fund and will therefore result in higher
performance for these accounts as compared to the Fund. The performance data is
also net of all brokerage commissions charged to those accounts, calculated on a
monthly basis. The Adviser has prepared and presented this data in compliance
with Global Investment Performance Standards ("GIPS"). The CFA Institute has not
been involved with the preparation or review of this data. The data has not been
adjusted to reflect any fees that will be payable by AllianceBernstein Large Cap
Growth Fund, which are higher than the fees imposed on the Historical Portfolio
and will result in a higher expense ratio and lower returns for
AllianceBernstein Large Cap Growth Fund. Expenses associated with the
distribution of share classes of AllianceBernstein Large Cap Growth Fund in
accordance with the plan adopted by AllianceBernstein Large Cap Growth Fund's
Board of Directors under Commission Rule 12b-1 are also excluded. The
performance data has also not been adjusted for corporate or individual taxes,
if any, payable by the account owners.
The Adviser has calculated the investment performance of the Historical
Portfolios on a trade-date basis. Dividends have been accrued at the end of the
month and cash flows weighted daily. Composite investment performance for all
portfolios has been determined on an asset weighted basis. New accounts are
included in the composite investment performance computations at the beginning
of the quarter following the initial contribution. The total returns set forth
below are calculated using a method that links the monthly return amounts for
the disclosed periods, resulting in a time-weighted rate of return.
The S&P 500 Index is a widely recognized, unmanaged index of market activity
based upon the aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the reinvestment of
dividends and other distributions. The S&P 500 Index reflects the total return
of securities comprising the Index, including changes in market prices as well
as accrued investment income, which is presumed to be reinvested. The Russell
1000 universe of securities is compiled by Frank Russell Company and is
segmented into two style indices, based on the capitalization-weighted median
book-to-price ratio of each of the securities. At each reconstitution, the
Russell 1000 constituents are ranked by their book-to-price ratio. Once so
ranked, the breakpoint for the two styles is determined by the median market
capitalization of the Russell 1000. Thus, those securities falling within the
top fifty percent of the cumulative market capitalization (as ranked by
descending book-to-price) become members of the Russell Price-Driven Indices.
The Russell 1000(R) Growth Index is, accordingly, designed to include those
Russell 1000 securities with a greater-than-average growth orientation. In
contrast with the securities in the Russell Price-Driven Indices, companies in
the Growth Index tend to exhibit higher price-to-book and price-earnings ratios,
lower dividend yield and higher forecasted growth values.
The S&P 500 Index and Russell 1000(R) Growth Index are included to illustrate
material economic and market factors that existed during the time period shown.
The S&P 500 Index and Russell 1000(R) Growth Index do not reflect the deduction
of any fees. If AllianceBernstein Large Cap Growth Fund were to purchase a
portfolio of securities substantially identical to the securities comprising the
S&P 500 Index or the Russell 1000(R) Growth Index, AllianceBernstein Large Cap
Growth Fund's performance relative to the index would be reduced by
AllianceBernstein Large Cap Growth Fund's expenses, including brokerage
commissions, advisory fees, distribution fees, custodial fees, transfer agency
costs and other administrative expenses, as well as by the impact on
AllianceBernstein Large Cap Growth Fund's shareholders of sales charges and
income taxes.
The investment performance for the periods presented may not be indicative of
future rates of return. The performance was not calculated pursuant to the
methodology established by the SEC that will be used to calculate the
AllianceBernstein Large Cap Growth Fund's performance. The use of methodology
different from that used to calculate performance could result in different
performance data.
The following performance data is provided solely to illustrate the Large Cap
Growth Team's performance in managing the Historical Portfolios as measured
against certain broad based market indices. Investors should not rely on the
following performance data of the Historical Portfolios as an indication of
future performance of AllianceBernstein Large Cap Growth Fund.
The average annual total returns presented below are based upon the cumulative
total return as of June 30, 2006 and, for more than one year, assume a steady
compounded rate of return and are not year-by-year results, which fluctuated
over the periods as shown.
AVERAGE ANNUAL TOTAL RETURNS
Large Cap Large Cap Russell
Growth Fund Growth Fund 1000(R)
(Class A (Class A with Historical S&P Growth
at NAV) Sales Load) Portfolios 500Index Index
------- ----------- ---------- -------- -----
One year..... 5.85% 1.38% 8.33% 8.62% 6.12%
Three years.. 8.45% 6.88% 9.15% 11.21% 8.35%
Five years... -3.52% -4.35% 0.94% 2.49% -0.76%
Ten years.... 5.31% 4.85% 7.98% 8.32% 5.42%
PERFORMANCE OF A SIMILARLY MANAGED PORTFOLIO
In addition to its support in managing the AllianceBernstein Global Research
Growth Fund's assets, the global growth research team currently has ultimate
responsibility over investment decisions of ACM Global Investments - Global
Growth Trends Portfolio, a mutual investment fund organized under the laws of
the Grand Duchy of Luxembourg of which the Adviser is the investment adviser and
which is available to non-U.S. investors (the "Historical Portfolio"). The
Historical Portfolio has substantially the same investment objective and
policies and has been managed in accordance with substantially similar
investment strategies and techniques as those contemplated for the
AllianceBernstein Global Research Growth Fund. The Historical Portfolio is not
subject to the same types of expenses as the AllianceBernstein Global Research
Growth Fund. In addition, it is not subject to the same diversification
requirements, tax restrictions and other investment limitations imposed on the
AllianceBernstein Global Research Growth Fund by the U.S. laws and regulations
applicable to U.S. mutual funds. The performance results of the Historical
Portfolio could have been negatively affected if it had been regulated as a U.S.
mutual fund.
Set forth below is performance data provided by the Adviser relating to the
Historical Portfolio for the period since its inception. As of December 31,
2005, the assets in the Historical Portfolio totaled approximately $4.2 billion.
The performance data is for the Historical Portfolio's Class AX shares and net
of all fees charged to the Historical Portfolio. The data has not been adjusted
to reflect any fees that are payable by the AllianceBernstein Global Research
Growth Fund, which may be higher than the fees imposed on the Historical
Portfolio. The performance data also has not been adjusted for taxes, if any,
payable by the shareholders of the Historical Portfolio.
As reflected below, the Historical Portfolio has over time performed favorably
when compared with the performance of the MSCI World Index. The unmanaged Morgan
Stanley Capital International (MSCI) World Index is a market
capitalization-weighted index and it does not reflect fees and expenses; it
measures the performance of stock markets in 23 countries.
The investment performance for the periods presented may not be indicative of
future rates of return. The performance was not calculated pursuant to the
methodology established by the SEC that will be used to calculate the
AllianceBernstein Global Research Growth Fund's performance. The use of
methodology different from that used to calculate performance could result in
different performance data.
The following performance data is provided solely to illustrate the past
performance of the global growth research team in managing the Historical
Portfolio. Investors should not rely on the following performance data of the
Historical Portfolio as an indication of future performance of the
AllianceBernstein Global Research Growth Fund.
SCHEDULE OF INVESTMENT PERFORMANCE -- HISTORICAL PORTFOLIO*
MSCI
Historical Portfolio World Index
Total Return** Total Return***
-------------- ---------------
Year Ended December 31:
2005 15.85% 9.49%
2004 12.89% 15.25%
2003 32.95% 33.76%
2002 (18.69)% (19.54)%
2001 (14.44)% (16.52)%
2000 (0.13)% (12.92)%
1999 44.57% 25.34%
1998 26.15% 24.80%
1997 8.67% 16.23%
1996 14.43% 14.00%
1995 42.85% 21.32%
1994 5.43% 5.58%
1993 19.47% 23.13%
1992 9.34% (4.66)%
Cumulative total return
for the period October 25,
1991 (inception of the
Historical Portfolio) to
December 31, 2005 477.30% 198.07%
----------
* Total return is for the Historical Portfolio's Class AX shares. Total
return is a measure of investment performance that is based upon the change
in value of an investment from the beginning to the end of a specified
period and assumes reinvestment of all dividends and other distributions.
The basis of preparation of this data is described in the preceding
discussion.
** Net of all fees charged on the Class AX shares.
*** Since Inception cumulative Index returns are from October 31, 1991.
The average annual total returns presented below are based upon the cumulative
total return as of December 31, 2005 and, for more than one year, assume a
steady compounded rate of return and are not year-by-year results, which
fluctuated over the periods as shown.
AVERAGE ANNUAL TOTAL RETURNS
Historical Portfolio+ MSCI World Index
--------------------- ----------------
One Year 15.85% 9.49%
Three Years 20.25% 18.69%
Five Years 3.88% 2.18%
Ten Years 10.60% 7.04%
Since October 25, 1991
(inception of the
Historical Portfolio) 13.16% 8.01%++
----------
+ Historical Portfolio returns are of the Class AX shares and are net of all
fees.
++ Since inception average annual total returns are from October 31, 1991.
Legal Proceedings
On April 8, 2002, in In re Enron Corporation Securities Litigation, a
consolidated complaint (as subsequently amended, the "Enron Complaint") was
filed in the United States District Court for the Southern District of Texas,
Houston Division, against numerous defendants, including the Adviser. The
principal allegations of the Enron Complaint, as they pertain to the Adviser,
are that the Adviser violated Sections 11 and 15 of the Securities Act with
respect to a registration statement filed by Enron Corp. ("Enron") and effective
with the Commission on July 18, 2001, which was used to sell $1.9 billion Enron
Zero Coupon Convertible Notes due 2021. Plaintiffs allege that the registration
statement was materially misleading and that Frank Savage, a director of Enron,
signed the registration statement at issue. Plaintiffs further allege that the
Adviser was a controlling person of Frank Savage, who was at that time an
employee of the Adviser and a director of AllianceBernstein Corporation.
Plaintiffs therefore assert that the Adviser is itself liable for the allegedly
misleading registration statement. Plaintiffs seek rescission or a rescissionary
measure of damages. On April 12, 2006, the Adviser moved for summary judgment
dismissing the Enron Complaint as the allegations therein pertain to the
Adviser. This motion is pending. On July 5, 2006 the court granted plaintiffs'
amended motion for class certification.
As has been previously reported in the press, the Staff of the Commission and
the Office of the New York Attorney General ("NYAG") have been investigating
practices in the mutual fund industry identified as "market timing" and "late
trading" of mutual fund shares. Certain other regulatory authorities have also
been conducting investigations into these practices within the industry and have
requested that the Adviser provide information to them. The Adviser has been
cooperating and will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
Commission and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the Commission is reflected in an Order of the
Commission ("Commission Order"). The agreement with the NYAG is memorialized in
an Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of
market timing attributable to market timing relationships described in
the Commission Order. According to the Commission Order, the
Reimbursement Fund is to be paid, in order of priority, to fund investors
based on (a) their aliquot share of losses suffered by the fund due to
market timing, and (b) a proportionate share of advisory fees paid by
such fund during the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the Commission Order and the NYAG Order
contemplate that the Adviser's registered investment company clients,
including the Funds, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of the advisory
fee it receives for managing the Funds. On September 7, 2004, each Fund's
advisory agreement was amended to reflect the reduced advisory fee.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; AllianceBernstein Holding L.P. ("Holding");
AllianceBernstein Corporation; AXA Financial, Inc.; the AllianceBernstein Mutual
Funds, certain officers of the Adviser ("Alliance defendants"); and certain
other defendants not affiliated with the Adviser, as well as unnamed Doe
defendants. The Hindo Complaint was filed in the United States District Court
for the Southern District of New York by alleged shareholders of two of the
AllianceBernstein Mutual Funds. The Hindo Complaint alleges that certain of the
Alliance defendants failed to disclose that they improperly allowed certain
hedge funds and other unidentified parties to engage in "late trading" and
"market timing" of AllianceBernstein Mutual Fund securities, violating Sections
11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act,
and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified
amount of compensatory damages and rescission of their contracts with the
Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts.
Since October 2, 2003, additional lawsuits making factual allegations generally
similar to those in the Hindo Complaint were filed in various federal and state
courts against the Adviser and certain other defendants. The plaintiffs in such
lawsuits have asserted a variety of theories for recovery including, but not
limited to, violations of the Securities Act, the Exchange Act, the Advisers
Act, the Investment Company Act, the Employee Retirement Income Security Act of
1974, as amended ("ERISA") certain state securities laws and common law. All
state court actions against the Adviser either were voluntarily dismissed or
removed to federal court. On February 20, 2004, the Judicial Panel on
Multidistrict Litigation transferred all federal actions to the United States
District Court for the District of Maryland (the "Mutual Fund MDL").
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Holding; and claims
brought under ERISA by participants in the Profit Sharing Plan for Employees of
the Adviser. All four complaints include substantially identical factual
allegations, which appear to be based in large part on the Commission Order and
the NYAG Order. On April 21, 2006, the Adviser and attorneys for the plaintiffs
in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA
claims entered into a confidential memorandum of understanding ("MOU")
containing their agreement to settle these claims. The agreement will be
documented by a stipulation of settlement and will be submitted for court
approval at a later date. The settlement amount, which we previously accrued and
disclosed, has been disbursed. The derivative claims brought on behalf of
Holding remain pending. Plaintiff seeks an unspecified amount of damages.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed against
the Adviser, Holding, and various other defendants not affiliated with the
Adviser. The WVAG Complaint was filed in the Circuit Court of Marshall County,
West Virginia by the Attorney General of the State of West Virginia. The WVAG
Complaint makes factual allegations generally similar to those in the Hindo
Complaint. On October 19, 2005, the WVAG Complaint was transferred to the Mutual
Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice of
Right to Hearing" addressed to the Adviser and Holding. The Summary Order claims
that the Adviser and Holding violated the West Virginia Uniform Securities Act,
and makes factual allegations generally similar to those in the Commission Order
and the NYAG Order. On January 26, 2006, the Adviser, Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. On April 12, 2006, respondents' petition was
denied. The Adviser intends to vigorously defend against the allegations in the
WVAG Complaint. On May 4, 2006, respondents appealed the court's determination.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. (the "Aucoin Complaint") was filed
against the Adviser, Holding, AllianceBernstein Corporation, AXA Financial,
Inc., AllianceBernstein Investments, Inc., certain current and former directors
of the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein Mutual Funds as nominal
defendants. The Aucoin Compliant was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other things,
(i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from AllianceBernstein Fund assets to
broker-dealers in exchange for preferential marketing services, (ii) that
certain of the defendants misrepresented and omitted from registration
statements and other reports material facts concerning such payments, and (iii)
that certain defendants caused such conduct as control persons of other
defendants. The Aucoin Complaint asserts claims for violations of Sections
34(b), 36(b) and 48(a) of the 1940 Act, Sections 206 and 215 of the Advisers
Act, breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts, an accounting of all AllianceBernstein Fund-related fees, commissions
and soft dollar payments, and restitution of all unlawfully or discriminatorily
obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint"), which asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiff's claim under Section 36(b) of the Investment Company Act. On January
11, 2006, the District Court granted defendants' motion for reconsideration and
dismissed the remaining Section 36(b) claim. On May 31, 2006, the District Court
denied plaintiffs' motion for leave to file their amended complaint. On July 5,
2006, plaintiffs filed a notice of appeal.
It is possible that these matters and/or other developments resulting from these
matters could result in increased redemptions of the Funds' shares or other
adverse consequences to the Funds. This may require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds. However, the Adviser believes
that these matters are not likely to have a material adverse effect on its
ability to perform advisory services relating to the Funds.
TRANSFER AGENCY AND RETIREMENT PLAN SERVICES
ABIS acts as the transfer agent for the Funds. ABIS, an indirect wholly-owned
subsidiary of the Adviser, registers the transfer, issuance and redemption of
Fund shares and disburses dividends and other distributions to Fund
shareholders.
Many Fund shares are owned by financial intermediaries for the benefit of their
customers. Retirement plans may also hold Fund shares in the name of the plan,
rather than the participant. In those cases, the Funds often do not maintain an
account for you. Thus, some or all of the transfer agency functions for these
and certain other accounts are performed by the financial intermediaries and
plan recordkeepers. The Funds, ABI and/or the Adviser pay to these financial
intermediaries and recordkeepers, including those that sell shares of the
AllianceBernstein Mutual Funds, fees for sub-transfer agency and recordkeeping
services in amounts ranging up to $19 per customer fund account per annum and/or
up to 0.25% per annum of the average daily assets held through the intermediary.
To the extent any of these payments for recordkeeping services or transfer
agency services are made by the Funds, they are included in the amount appearing
opposite the caption "Other Expenses" found in the Fund expense tables under
"Fees and Expenses of the Funds." In addition, financial intermediaries may be
affiliates of entities that receive compensation from the Adviser or ABI for
maintaining retirement plan "platforms" that facilitate trading by affiliated
and non-affiliated financial intermediaries and recordkeeping for retirement
plans.
Because financial intermediaries and plan recordkeepers may be paid varying
amounts per class for sub-transfer agency and related recordkeeping services,
the service requirements of which may also vary by class, this may create an
additional incentive for financial intermediaries and their financial advisors
to favor one fund complex over another or one class of shares over another.
DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
Each Fund's income dividends and capital gains distributions, if any, declared
by a Fund on its outstanding shares will, at the election of each shareholder,
be paid in cash or in additional shares of the same class of shares of that
Fund. If paid in additional shares, the shares will have an aggregate net asset
value as of the close of business on the declaration date of the dividend or
distribution equal to the cash amount of the dividend or distribution. You may
make an election to receive dividends and distributions in cash or in shares at
the time you purchase shares. Your election can be changed at any time prior to
a record date for a dividend. There is no sales or other charge in connection
with the reinvestment of dividends or capital gains distributions. Cash
dividends may be paid in check, or, at your election, electronically via the ACH
network.
If you receive an income dividend or capital gains distribution in cash you may,
within 120 days following the date of its payment, reinvest the dividend or
distribution in additional shares of that Fund without charge by returning to
the Adviser, with appropriate instructions, the check representing the dividend
or distribution. Thereafter, unless you otherwise specify, you will be deemed to
have elected to reinvest all subsequent dividends and distributions in shares of
that Fund.
While it is the intention of each Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized capital
gains, if any, the amount and timing of any dividend or distribution will depend
on the realization by the Fund of income and capital gains from investments.
There is no fixed dividend rate and there can be no assurance that a Fund will
pay any dividends or realize any capital gains. The final determination of the
amount of a Fund's return of capital distributions for the period will be made
after the end of each calendar year. You will normally have to pay federal
income tax, and any state or local income taxes, on the distributions you
receive from a Fund, whether you take the distributions in cash or reinvest them
in additional shares. Distributions of net capital gains from the sale of
investments that a Fund owned for more than one year and that are properly
designated as capital gain dividends are taxable as long-term capital gains. For
taxable years beginning on or before December 31, 2008, distributions of
dividends to a Fund's non-corporate shareholders may be treated as "qualified
dividend income", which is taxed at reduced rates, if such distributions are
derived from, and designated by a Fund as, "qualified dividend income" and
provided that holding period and other requirements are met by both the
shareholder and the Fund. "Qualified dividend income" generally is income
derived from dividends from U.S. corporations and "qualified foreign
corporations." Other distributions by a Fund are generally taxable to you as
ordinary income. Dividends declared in October, November, or December and paid
in January of the following year are taxable as if they had been paid the
previous December. A Fund will notify you as to how much of the Fund's
distributions, if any, qualify for these reduced tax rates.
Investment income received by a Fund from sources within foreign countries may
be subject to foreign income taxes withheld at the source. To the extent that
any Fund is liable for foreign income taxes withheld at the source, the Fund
intends, if possible, to operate so as to meet the requirements of the Code to
"pass through" to the Fund's shareholders credits for foreign income taxes paid
(or to permit shareholders to claim a deduction for such foreign taxes), but
there can be no assurance that any Fund will be able to do so, and Funds that
invest primarily in U.S. securities will not do so. Furthermore, a shareholder's
ability to claim a foreign tax credit or deduction for foreign taxes paid by a
Fund may be subject to certain limitations imposed by the Code, as a result of
which a shareholder may not be permitted to claim a credit or deduction for all
or a portion of the amount of such taxes.
Under certain circumstances, if a Fund realizes losses (e.g., from fluctuations
in currency exchange rates) after paying a dividend, all or a portion of the
dividend may subsequently be characterized as a return of capital. Returns of
capital are generally nontaxable, but will reduce a shareholder's basis in
shares of the Fund. If that basis is reduced to zero (which could happen if the
shareholder does not reinvest distributions and returns of capital are
significant), any further returns of capital will be taxable as capital gain.
If you buy shares just before a Fund deducts a distribution from its NAV, you
will pay the full price for the shares and then receive a portion of the price
back as a taxable distribution.
The sale or exchange of Fund shares is a taxable transaction for federal income
tax purposes.
Each year shortly after December 31, each Fund will send you tax information
stating the amount and type of all its distributions for the year. You are
encouraged to consult your tax adviser about the federal, state, and local tax
consequences in your particular circumstances, as well as about any possible
foreign tax consequences.
Non-U.S. Shareholders
If you are a nonresident alien individual or a foreign corporation for federal
income tax purposes, please see the Funds' SAIs for information on how you may
be affected by the American Jobs Creation Act of 2004, including new rules for a
Fund's distributions of gain attributable to "U.S. real property interests."
CONVERSION FEATURE
--------------------------------------------------------------------------------
As described above, Advisor Class shares may be held solely through certain
fee-based program accounts and employee benefit plans, and by investment
advisory clients of, and certain persons associated with, the Adviser and its
affiliates or the Funds. If a holder of Advisor Class shares (i) ceases to
participate in the fee-based program or plan, or (ii) is otherwise no longer
eligible to purchase Advisor Class shares (each a "Conversion Event"), then all
Advisor Class shares held by the shareholder will convert automatically to Class
A shares of the same Fund. The Fund will provide the shareholder with at least
30 days advance notice of such conversion. The failure of a shareholder or a
fee-based program to satisfy the minimum investment requirements to purchase
Advisor Class shares will not constitute a Conversion Event. The conversion
would occur on the basis of the relative NAV of the two classes and without the
imposition of any sales load, fee or other charge. Class A shares have a higher
expense ratio, may pay lower dividends, and may have a lower NAV than Advisor
Class shares.
GENERAL INFORMATION
--------------------------------------------------------------------------------
Under unusual circumstances, a Fund may suspend redemptions or postpone payment
for up to seven days or longer, as permitted by federal securities law. The
Funds reserve the right to close an account that has remained below $500 for 90
days.
During drastic economic or market developments, you might have difficulty in
reaching ABIS by telephone, in which event you should issue written instructions
to ABIS. ABIS is not responsible for the authenticity of telephone requests to
purchase, sell, or exchange shares. ABIS will employ reasonable procedures to
verify that telephone requests are genuine, and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.
Shareholder Services. ABIS offers a variety of shareholder services. For more
information about these services or your account, call ABIS's toll-free number,
800-221-5672. Some services are described in the Subscription Application.
Householding. Many shareholders of the AllianceBernstein Mutual Funds have
family members living in the same home who also own shares of the same Funds. In
order to reduce the amount of duplicative mail that is sent to homes with more
than one Fund account and to reduce expenses of the Fund, all AllianceBernstein
Mutual Funds will, until notified otherwise, send only one copy of each
prospectus, shareholder report and proxy statement to each household address.
This process, known as "householding", does not apply to account statements,
confirmations, or personal tax information. If you do not wish to participate in
householding, or wish to discontinue householding at any time, call ABIS at
800-221-5672. We will resume separate mailings for your account within 30 days
of your request.
GLOSSARY OF INVESTMENT TERMS
--------------------------------------------------------------------------------
Convertible securities are fixed-income securities that are convertible into
common stock.
Depositary receipts include American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs") and other
types of depositary receipts.
Equity securities include (i) common stocks, partnership interests, business
trust shares and other equity or ownership interests in business enterprises and
(ii) securities convertible into, and rights and warrants to subscribe for the
purchase of, such stocks, shares and interests.
Fixed-income securities are debt securities and dividend-paying preferred
stocks, including floating rate and variable rate instruments.
U.S. Government securities are securities issued or guaranteed by the United
States Government, its agencies or instrumentalities, or by government-sponsored
entities.
Russell 1000(R) Growth Index measures the performance of those Russell 1000
Companies (the largest 1,000 U.S. companies by capitalization) with higher
price-to-book ratios and higher forecasted growth values.
Russell Midcap(R) Growth Index measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The companies are also included in the Russell 1000(R) Growth index.
S&P 500 Index is Standard & Poor's Ratings Services' 500 Composite Stock Price
Index, a widely recognized unmanaged index of market activity.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The financial highlights table is intended to help you understand each Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
share of each Fund. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). Except as otherwise indicated,
this information for the most recently completed fiscal year has been audited by
[_____________] and this information for the prior four years has been audited
by [______________], independent registered public accounting firms for
AllianceBernstein Large Cap Growth Fund, AllianceBernstein Growth Fund and
AllianceBernstein Mid-Cap Growth Fund, AllianceBernstein Global Health Care
Fund, AllianceBernstein Global Research Growth Fund, AllianceBernstein
International Research Growth Fund and AllianceBernstein International Growth
Fund and this information for all fiscal years has been audited by
[____________], the independent registered public accounting firm for
AllianceBernstein Small Cap Growth Portfolio and AllianceBernstein Global
Technology Fund, whose reports, along with each Fund's financial statements, are
included in each Fund's annual report, which is available upon request.
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
--------------------------------- --------------------------------
Net
Gains or
Losses on
Investments Distributions
Net Asset Net (both Dividends in Excess Tax Distributions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------- --------- --------- ----------- ---------- ------ ------ ------- -----
AllianceBernstein Large
Cap Growth Fund
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 16.28 (.14)(b) 3.01 2.87 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 15.58 (.15)(f) .85 .70 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 15.07 (.10) .61 .51 0.00 0.00 0.00 0.00
Year ended 11/30/02... 20.24 (.19) (4.98) (5.17) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 29.51 (.19) (6.43) (6.62) 0.00 0.00 0.00 (2.38)
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 14.80 (.25)(b) 2.73 2.48 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 14.27 (.25)(f) .78 .53 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 13.88 (.16) .55 .39 0.00 0.00 0.00 0.00
Year ended 11/30/02... 18.78 (.29) (4.61) (4.90) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 27.76 (.35) (5.98) (6.33) 0.00 0.00 0.00 (2.38)
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 14.83 (.24)(b) 2.74 2.50 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 14.30 (.25)(f) .78 .53 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 13.90 (.16) .56 .40 0.00 0.00 0.00 0.00
Year ended 11/30/02... 18.81 (.29) (4.62) (4.91) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 27.80 (.35) (5.99) (6.34) 0.00 0.00 0.00 (2.38)
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 16.74 (.09)(b) 3.11 3.02 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 15.97 (.10)(f) .87 .77 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 15.42 (.08) .63 .55 0.00 0.00 0.00 0.00
Year ended 11/30/02... 20.65 (.14) (5.09) (5.23) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 29.99 (.14) (6.55) (6.69) 0.00 0.00 0.00 (2.38)
AllianceBernstein
Growth Fund
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 29.05 (.32) 6.94 6.62 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 26.18 (.31)(f) 3.18 2.87 0.00 0.00 0.00 0.00
11/1/02 to 7/31/03+... 22.56 (.21) 3.83 3.62 0.00 0.00 0.00 0.00
Year ended 10/31/02... 27.40 (.28) (4.56) (4.84) 0.00 0.00 0.00 0.00
Year ended 10/31/01... 52.42 (.22) (19.10) (19.32) 0.00 0.00 0.00 (5.70)
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 20.31 (.39) 4.82 4.43 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 18.44 (.37)(f) 2.24 1.87 0.00 0.00 0.00 0.00
11/1/02 to 7/31/03+... 15.98 (.23) 2.69 2.46 0.00 0.00 0.00 0.00
Year ended 10/31/02... 19.56 (.34) (3.24) (3.58) 0.00 0.00 0.00 0.00
Year ended 10/31/01... 39.49 (.34) (13.89) (14.23) 0.00 0.00 0.00 (5.70)
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 20.35 (.38) 4.83 4.45 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 18.47 (.37)(f) 2.25 1.88 0.00 0.00 0.00 0.00
11/1/02 to 7/31/03+... 16.00 (.23) 2.70 2.47 0.00 0.00 0.00 0.00
Year ended 10/31/02... 19.58 (.33) (3.25) (3.58) 0.00 0.00 0.00 0.00
Year ended 10/31/01... 39.52 (.34) (13.90) (14.24) 0.00 0.00 0.00 (5.70)
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 29.85 (.23) 7.14 6.91 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 26.81 (.23)(f) 3.27 3.04 0.00 0.00 0.00 0.00
11/1/02 to 7/31/03+... 23.05 (.16) 3.92 3.76 0.00 0.00 0.00 0.00
Year ended 10/31/02... 27.92 (.20) (4.67) (4.87) 0.00 0.00 0.00 0.00
Year ended 10/31/01... 53.17 (.11) (19.44) (19.55) 0.00 0.00 0.00 (5.70)
AllianceBernstein
Mid-Cap
Growth Fund
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 5.38 (.05) 1.12 1.07 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 4.46 (.06)(f) .98 .92 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 3.70 (.03) .79 .76 0.00 0.00 0.00 0.00
Year ended 11/30/02... 4.79 (.04) (1.05) (1.09) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 5.83 (.04) (.71) (.75) 0.00 0.00 0.00 (.29)
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 4.63 (.09) .97 .88 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 3.87 (.09)(f) .85 .76 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 3.23 (.03) .67 .64 0.00 0.00 0.00 0.00
Year ended 11/30/02... 4.22 (.07) (.92) (.99) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 5.21 (.07) (.63) (.70) 0.00 0.00 0.00 (.29)
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 4.62 (.08) .96 .88 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 3.87 (.09)(f) .84 .75 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 3.22 (.03) .68 .65 0.00 0.00 0.00 0.00
Year ended 11/30/02... 4.21 (.06) (.93) (.99) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 5.20 (.07) (.63) (.70) 0.00 0.00 0.00 (.29)
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 5.45 (.04) 1.15 1.11 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 4.52 (.05)(f) .98 .93 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 3.74 0.00 .78 .78 0.00 0.00 0.00 0.00
Year ended 11/30/02... 4.83 (.03) (1.06) (1.09) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 5.86 (.03) (.71) (.74) 0.00 0.00 0.00 (.29)
Please refer to the footnotes on pages [___] and [___].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
------------------ ------------------------
Net
Net Assets
Distributions Total Asset End of Ratio of Ratio of Net
in Excess Dividends Value, Period Expenses Income (Loss) Portfolio
of Capital and End of Total (000's to Average to Average Turnover
Gains Distributions Period Return(c) omitted) Net Assets Net Assets Rate
----- ------------- ------ --------- -------- ---------- ---------- ----
AllianceBernstein Large
Cap Growth Fund
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 19.15 17.63 1,348,678 1.50(d) (.82)(b) 56
Year ended 7/31/04.... 0.00 0.00 16.28 4.49 1,550,292 1.58(d) (.90)(f) 61
12/1/02 to 7/31/03+... 0.00 0.00 15.58 3.38 1,757,243 1.89* (1.08)* 60
Year ended 11/30/02... 0.00 0.00 15.07 (25.54) 2,098,623 1.73 (1.09) 93
Year ended 11/30/01... (.27) (2.65) 20.24 (24.90) 3,556,040 1.53 (.83) 135
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 17.28 16.67 1,559,369 2.25(d) (1.57)(b) 56
Year ended 7/31/04.... 0.00 0.00 14.80 3.71 1,871,308 2.34(d) (1.66)(f) 61
12/1/02 to 7/31/03+... 0.00 0.00 14.27 2.81 2,670,330 2.65* (1.84)* 60
Year ended 11/30/02... 0.00 0.00 13.88 (26.09) 3,080,955 2.47 (1.84) 93
Year ended 11/30/01... (.27) (2.65) 18.78 (25.48) 5,774,836 2.25 (1.59) 135
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 17.33 16.86 536,804 2.22(d) (1.53)(b) 56
Year ended 7/31/04.... 0.00 0.00 14.83 3.71 666,851 2.31(d) (1.62)(f) 61
12/1/02 to 7/31/03+... 0.00 0.00 14.30 2.88 943,029 2.62* (1.81)* 60
Year ended 11/30/02... 0.00 0.00 13.90 (26.10) 1,116,314 2.45 (1.81) 93
Year ended 11/30/01... (.27) (2.65) 18.81 (25.48) 2,173,671 2.26 (1.59) 135
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 19.76 18.04 1,040,894 1.20(d) (.53)(b) 56
Year ended 7/31/04.... 0.00 0.00 16.74 4.82 761,895 1.28(d) (.60)(f) 61
12/1/02 to 7/31/03+... 0.00 0.00 15.97 3.57 793,162 1.60* (.78)* 60
Year ended 11/30/02... 0.00 0.00 15.42 (25.33) 590,508 1.45 (.79) 93
Year ended 11/30/01... (.27) (2.65) 20.65 (24.72) 510,603 1.25 (.59) 135
AllianceBernstein
Growth Fund
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 35.67 22.79 1,081,725 1.49 (1.02) 41
Year ended 7/31/04.... 0.00 0.00 29.05 10.96 951,903 1.51(d) (1.05)(f) 53
11/1/02 to 7/31/03+... 0.00 0.00 26.18 16.05 835,657 1.66* (1.18)* 29
Year ended 10/31/02... 0.00 0.00 22.56 (17.66) 715,438 1.49 (1.04) 41
Year ended 10/31/01... 0.00 (5.70) 27.40 (40.50) 874,604 1.28 (.61) 115
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 24.74 21.81 570,462 2.24 (1.77) 41
Year ended 7/31/04.... 0.00 0.00 20.31 10.14 736,526 2.26(d) (1.80)(f) 53
11/1/02 to 7/31/03+... 0.00 0.00 18.44 15.39 999,620 2.41* (1.94)* 29
Year ended 10/31/02... 0.00 0.00 15.98 (18.30) 1,131,628 2.22 (1.77) 41
Year ended 10/31/01... 0.00 (5.70) 19.56 (40.93) 2,233,260 2.00 (1.31) 115
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 24.80 21.87 200,381 2.20 (1.73) 41
Year ended 7/31/04.... 0.00 0.00 20.35 10.18 212,679 2.22(d) (1.77)(f) 53
11/1/02 to 7/31/03+... 0.00 0.00 18.47 15.44 236,358 2.38* (1.90)* 29
Year ended 10/31/02... 0.00 0.00 16.00 (18.28) 239,940 2.19 (1.74) 41
Year ended 10/31/01... 0.00 (5.70) 19.58 (40.92) 419,382 1.98 (1.29) 115
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 36.76 23.15 36,167 1.19 (.72) 41
Year ended 7/31/04.... 0.00 0.00 29.85 11.34 26,422 1.21(d) (.75)(f) 53
11/1/02 to 7/31/03+... 0.00 0.00 26.81 16.31 16,994 1.36* (.87)* 29
Year ended 10/31/02... 0.00 0.00 23.05 (17.44) 10,433 1.18 (.73) 41
Year ended 10/31/01... 0.00 (5.70) 27.92 (40.34) 19,087 .98 (.30) 115
AllianceBernstein
Mid-Cap
Growth Fund
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 6.45 19.89 653,612 1.25 (.88) 88
Year ended 7/31/04.... 0.00 0.00 5.38 20.63 610,854 1.25(d) (1.06)(f) 135
12/1/02 to 7/31/03+... 0.00 0.00 4.46 20.54 540,843 1.45* (1.11)* 75
Year ended 11/30/02... 0.00 0.00 3.70 (22.76) 469,570 1.34 (1.03) 183
Year ended 11/30/01... 0.00 (.29) 4.79 (13.64) 686,445 1.22 (.69) 226
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 5.51 19.01 70,236 2.07 (1.71) 88
Year ended 7/31/04.... 0.00 0.00 4.63 19.64 74,567 2.09(d) (1.90)(f) 135
12/1/02 to 7/31/03+... 0.00 0.00 3.87 19.81 53,461 2.32* (1.98)* 75
Year ended 11/30/02... 0.00 0.00 3.23 (23.46) 41,096 2.20 (1.89) 183
Year ended 11/30/01... 0.00 (.29) 4.22 (14.34) 61,816 2.08 (1.54) 226
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 5.50 19.05 24,098 2.05 (1.68) 88
Year ended 7/31/04.... 0.00 0.00 4.62 19.38 26,017 2.06(d) (1.87)(f) 135
12/1/02 to 7/31/03+... 0.00 0.00 3.87 20.19 14,415 2.27* (1.94)* 75
Year ended 11/30/02... 0.00 0.00 3.22 (23.52) 10,860 2.16 (1.85) 183
Year ended 11/30/01... 0.00 (.29) 4.21 (14.37) 15,391 2.04 (1.51) 226
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 6.56 20.37 68,495 1.04 (.64) 88
Year ended 7/31/04.... 0.00 0.00 5.45 20.58 44,440 1.04(d) (.85)(f) 135
12/1/02 to 7/31/03+... 0.00 0.00 4.52 20.86 21,251 1.23* (.89)* 75
Year ended 11/30/02... 0.00 0.00 3.74 (22.57) 13,092 1.08 (.81) 183
Year ended 11/30/01... 0.00 (.29) 4.83 (13.39) 131,032 1.08 (.64) 226
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
--------------------------------- --------------------------------
Net
Gains or
Losses on
Investments Distributions
Net Asset Net (both Dividends in Excess Tax Distributions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------- --------- --------- ----------- ---------- ------ ------ ------- -----
AllianceBernstein
Small Cap Growth
Portfolio
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 19.70 (.30)(b) 4.45 4.15 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 17.30 (.33)(b) 2.73 2.40 0.00 0.00 0.00 0.00
10/1/02 to 7/31/03+... 13.34 (.24) 4.20 3.96 0.00 0.00 0.00 0.00
Year ended 9/30/02.... 16.25 (.30) (2.61) (2.91) 0.00 0.00 0.00 0.00
Year ended 9/30/01.... 30.76 (.35) (11.46) (11.81) 0.00 0.00 0.00 (.72)
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 16.72 (.39)(b) 3.75 3.36 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 14.80 (.42)(b) 2.34 1.92 0.00 0.00 0.00 0.00
10/1/02 to 7/31/03+... 11.49 (.28) 3.59 3.31 0.00 0.00 0.00 0.00
Year ended 9/30/02.... 14.11 (.39) (2.23) (2.62) 0.00 0.00 0.00 0.00
Year ended 9/30/01.... 27.30 (.45) (10.04) (10.49) 0.00 0.00 0.00 (.72)
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 16.75 (.39)(b) 3.77 3.38 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 14.82 (.42)(b) 2.35 1.93 0.00 0.00 0.00 0.00
10/1/02 to 7/31/03+... 11.50 (.28) 3.60 3.32 0.00 0.00 0.00 0.00
Year ended 9/30/02.... 14.13 (.39) (2.24) (2.63) 0.00 0.00 0.00 0.00
Year ended 9/30/01.... 27.32 (.45) (10.04) (10.49) 0.00 0.00 0.00 (.72)
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 20.19 (.25)(b) 4.57 4.32 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 17.68 (.29)(b) 2.80 2.51 0.00 0.00 0.00 0.00
10/1/02 to 7/31/03+... 13.60 (.21) 4.29 4.08 0.00 0.00 0.00 0.00
Year ended 9/30/02.... 16.52 (.28) (2.64) (2.92) 0.00 0.00 0.00 0.00
Year ended 9/30/01.... 31.07 (.29) (11.56) (11.85) 0.00 0.00 0.00 (.72)
AllianceBernstein
Global Technology Fund
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 49.14 (.34)(b) 7.76 7.42 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 47.44 (.72)(b) 2.42 1.70 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 43.48 (.54) 4.50 3.96 0.00 0.00 0.00 0.00
Year ended 11/30/02... 67.05 (.87) (22.70) (23.57) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 95.32 (.82) (21.17) (21.99) 0.00 0.00 0.00 (5.86)
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 44.71 (.68)(b) 7.03 6.35 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 43.49 (1.03)(b) 2.25 1.22 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 40.06 (.69) 4.12 3.43 0.00 0.00 0.00 0.00
Year ended 11/30/02... 62.27 (1.16) (21.05) (22.21) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 89.59 (1.28) (19.76) (21.04) 0.00 0.00 0.00 (5.86)
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 44.73 (.66)(b) 7.04 6.38 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 43.50 (1.02)(b) 2.25 1.23 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 40.07 (.68) 4.11 3.43 0.00 0.00 0.00 0.00
Year ended 11/30/02... 62.25 (1.15) (21.03) (22.18) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 89.55 (1.28) (19.74) (21.02) 0.00 0.00 0.00 (5.86)
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 50.40 (.20)(b) 7.98 7.78 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 48.50 (.58)(b) 2.48 1.90 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 44.36 (.46) 4.60 4.14 0.00 0.00 0.00 0.00
Year ended 11/30/02... 68.21 (.72) (23.13) (23.85) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 96.60 (.60) (21.51) (22.11) 0.00 0.00 0.00 (5.89)
AllianceBernstein
Global Health Care Fund
Class A
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.63 (.13)(b) .89 .76 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 10.37 (.12)(f) 1.38 1.26 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 9.86 (.10) .61 .51 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 11.20 (.12) (1.22) (1.34) 0.00 0.00 0.00 0.00
Class B
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.22 (.20)(b) .84 .64 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 10.08 (.19)(f) 1.33 1.14 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 9.66 (.17) .59 .42 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 11.05 (.20) (1.19) (1.39) 0.00 0.00 0.00 0.00
Class C
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.23 (.20)(b) .85 .65 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 10.09 (.19)(b) 1.33 1.14 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 9.66 (.17) .60 .43 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 11.05 (.20) (1.19) (1.39) 0.00 0.00 0.00 0.00
Advisor Class
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.91 (.09)(b) .90 .81 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 10.59 (.08)(f) 1.40 1.32 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 10.03 (.08) .64 .56 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 11.36 (.09) (1.24) (1.33) 0.00 0.00 0.00 0.00
Please refer to the footnotes on pages [___] and [___].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
------------------ ------------------------
Net
Net Assets
Distributions Total Asset End of Ratio of Ratio of Net
in Excess Dividends Value, Period Expenses Income (Loss) Portfolio
of Capital and End of Total (000's to Average to Average Turnover
Gains Distributions Period Return(c) omitted) Net Assets Net Assets Rate
----- ------------- ------ --------- -------- ---------- ---------- ----
AllianceBernstein
Small Cap Growth
Portfolio
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 23.85 21.07 207,873 1.60(d) (1.37)(b) 82
Year ended 7/31/04.... 0.00 0.00 19.70 13.87 185,906 1.85(d) (1.67)(b) 94
10/1/02 to 7/31/03+... 0.00 0.00 17.30 29.69 184,378 2.32* (1.95)* 94
Year ended 9/30/02.... 0.00 0.00 13.34 (17.91) 156,340 1.92 (1.71) 98
Year ended 9/30/01.... (1.98) (2.70) 16.25 (41.42) 232,456 1.79 (1.58) 109
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 20.08 20.10 121,348 2.40(d) (2.17)(b) 82
Year ended 7/31/04.... 0.00 0.00 16.72 12.97 152,031 2.65(d) (2.47)(b) 94
10/1/02 to 7/31/03+... 0.00 0.00 14.80 28.81 168,554 3.14* (2.78)* 94
Year ended 9/30/02.... 0.00 0.00 11.49 (18.57) 159,791 2.72 (2.50) 98
Year ended 9/30/01.... (1.98) (2.70) 14.11 (41.88) 257,161 2.57 (2.36) 109
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 20.13 20.18 32,895 2.36(d) (2.12)(b) 82
Year ended 7/31/04.... 0.00 0.00 16.75 13.02 35,410 2.61(d) (2.43)(b) 94
10/1/02 to 7/31/03+... 0.00 0.00 14.82 28.87 39,434 3.10* (2.73)* 94
Year ended 9/30/02.... 0.00 0.00 11.50 (18.61) 37,256 2.71 (2.49) 98
Year ended 9/30/01.... (1.98) (2.70) 14.13 (41.85) 60,925 2.56 (2.35) 109
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 24.51 21.40 15,342 1.34(d) (1.11)(b) 82
Year ended 7/31/04.... 0.00 0.00 20.19 14.20 7,921 1.59(d) (1.41)(b) 94
10/1/02 to 7/31/03+... 0.00 0.00 17.68 30.00 9,016 2.05* (1.69)* 94
Year ended 9/30/02.... 0.00 0.00 13.60 (17.68) 8,916 1.60 (1.41) 98
Year ended 9/30/01.... (1.98) (2.70) 16.52 (41.11) 68,730 1.52 (1.31) 109
AllianceBernstein
Global Technology Fund
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 56.56 15.10 1,067,072 1.66(d) (.65)(b) 80
Year ended 7/31/04.... 0.00 0.00 49.14 3.58 1,112,174 1.65(d) (1.36)(b) 80
12/1/02 to 7/31/03+... 0.00 0.00 47.44 9.11 1,186,488 2.24* (1.95)* 127
Year ended 11/30/02... 0.00 0.00 43.48 (35.15) 1,096,744 1.85 (1.64) 117
Year ended 11/30/01... (.42) (6.28) 67.05 (24.90) 1,926,473 1.58 (1.08) 55
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 51.06 14.20 844,111 2.43(d) (1.42)(b) 80
Year ended 7/31/04.... 0.00 0.00 44.71 2.81 1,100,840 2.42(d) (2.13)(b) 80
12/1/02 to 7/31/03+... 0.00 0.00 43.49 8.56 1,453,453 3.02* (2.73)* 127
Year ended 11/30/02... 0.00 0.00 40.06 (35.67) 1,539,144 2.58 (2.37) 117
Year ended 11/30/01... (.42) (6.28) 62.27 (25.46) 3,092,947 2.31 (1.80) 55
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 51.11 14.26 261,596 2.39(d) (1.37)(b) 80
Year ended 7/31/04.... 0.00 0.00 44.73 2.83 313,166 2.39(d) (2.10)(b) 80
12/1/02 to 7/31/03+... 0.00 0.00 43.50 8.56 396,472 3.01* (2.72)* 127
Year ended 11/30/02... 0.00 0.00 40.07 (35.63) 410,649 2.55 (2.34) 117
Year ended 11/30/01... (.42) (6.28) 62.25 (25.45) 835,406 2.30 (1.80) 55
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 58.18 15.44 90,583 1.35(d) (.36)(b) 80
Year ended 7/31/04.... 0.00 0.00 50.40 3.92 80,420 1.35(d) (1.06)(b) 80
12/1/02 to 7/31/03+... 0.00 0.00 48.50 9.33 93,511 1.94* (1.65)* 127
Year ended 11/30/02... 0.00 0.00 44.36 (34.96) 83,018 1.49 (1.29) 117
Year ended 11/30/01... (.39) (6.28) 68.21 (24.68) 231,167 1.27 (.78) 55
AllianceBernstein
Global Health Care Fund
Class A
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 12.39 6.54 46,505 1.80(d) (1.10)(b) 30
Year ended 6/30/04.... 0.00 0.00 11.63 12.15 55,079 1.82(d) (1.07)(f) 34
Year ended 6/30/03.... 0.00 0.00 10.37 5.17 56,077 2.06 (1.12) 8
Year ended 6/30/02.... 0.00 0.00 9.86 (11.96) 63,973 1.85 (1.13) 9
Class B
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 11.86 5.71 94,104 2.55(d) (1.87)(b) 30
Year ended 6/30/04.... 0.00 0.00 11.22 11.31 119,260 2.58(d) (1.83)(f) 34
Year ended 6/30/03.... 0.00 0.00 10.08 4.35 134,907 2.82 (1.88) 8
Year ended 6/30/02.... 0.00 0.00 9.66 (12.58) 163,340 2.60 (1.87) 9
Class C
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 11.88 5.79 24,000 2.52(d) (1.83)(b) 30
Year ended 6/30/04.... 0.00 0.00 11.23 11.30 30,698 2.55(d) (1.80)(f) 34
Year ended 6/30/03.... 0.00 0.00 10.09 4.45 34,298 2.80 (1.85) 8
Year ended 6/30/02.... 0.00 0.00 9.66 (12.58) 41,268 2.57 (1.84) 9
Advisor Class
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 12.72 6.80 11,886 1.50(d) (.77)(b) 30
Year ended 6/30/04.... 0.00 0.00 11.91 12.47 9,705 1.51(d) (.75)(f) 34
Year ended 6/30/03.... 0.00 0.00 10.59 5.58 9,139 1.77 (.81) 8
Year ended 6/30/02.... 0.00 0.00 10.03 (11.71) 7,544 1.57 (.83) 9
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
--------------------------------- --------------------------------
Net
Gains or
Losses on
Investments Distributions
Net Asset Net (both Dividends in Excess Tax Distributions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------- --------- --------- ----------- ---------- ------ ------ ------- -----
AllianceBernstein Global
Research Growth Fund
Class A
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 13.23 (.02) 1.35 1.33 0.00(g) 0.00 0.00 (.09)
Year ended 6/30/04.... 11.33 (.01)(f) 2.68 2.67 (.01) 0.00 0.00 (.76)
7/22/02++ to 6/30/03.. 10.00 (.01)(f) 1.34 1.33 0.00 0.00 0.00 0.00
Class B
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 13.04 (.09) 1.31 1.22 0.00 0.00 0.00 (.09)
Year ended 6/30/04.... 11.26 (.18)(f) 2.72 2.54 0.00 0.00 0.00 (.76)
7/22/02++ to 6/30/03.. 10.00 (.07)(f) 1.33 1.26 0.00 0.00 0.00 0.00
Class C
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 13.04 (.11) 1.33 1.22 0.00 0.00 0.00 (.09)
Year ended 6/30/04.... 11.26 (.08)(f) 2.62 2.54 0.00 0.00 0.00 (.76)
7/22/02++ to 6/30/03.. 10.00 (.07)(f) 1.33 1.26 0.00 0.00 0.00 0.00
Advisor Class
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 13.27 .02 1.36 1.38 0.00(g) 0.00 0.00 (.09)
Year ended 6/30/04.... 11.36 .01(f) 2.70 2.71 (.04) 0.00 0.00 (.76)
7/22/02++ to 6/30/03.. 10.00 .02(f) 1.34 1.36 0.00 0.00 0.00 0.00
AllianceBernstein
International Research
Growth Fund
Class A
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 8.50 (.03)(b) 1.79 1.76 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 7.54 (.07)(f) 1.03 .96 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 7.31 (.03)(b) .26 .23 0.00 0.00 0.00 0.00
Year ended 11/30/02... 8.36 (.09) (.96) (1.05) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 10.50 (.10) (2.04) (2.14) 0.00 0.00 0.00 0.00
Class B
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 8.10 (.09)(b) 1.70 1.61 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 7.25 (.13)(f) .98 .85 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 7.06 (.06)(b) .25 .19 0.00 0.00 0.00 0.00
Year ended 11/30/02... 8.12 (.14)(b) (.92) (1.06) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 10.29 (.17) (2.00) (2.17) 0.00 0.00 0.00 0.00
Class C
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 8.10 (.08)(b) 1.69 1.61 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 7.25 (.13)(f) .98 .85 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 7.06 (.06)(b) .25 .19 0.00 0.00 0.00 0.00
Year ended 11/30/02... 8.13 (.14)(b) (.93) (1.07) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 10.29 (.16) (2.00) (2.16) 0.00 0.00 0.00 0.00
Advisor Class
Year ended 7/31/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 7/31/05.... 8.65 (.03)(b) 1.79 1.82 0.00 0.00 0.00 0.00
Year ended 7/31/04.... 7.66 (.03)(f) 1.02 .99 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+... 7.41 (.01)(b) .26 .25 0.00 0.00 0.00 0.00
Year ended 11/30/02... 8.44 (.07) (.96) (1.03) 0.00 0.00 0.00 0.00
Year ended 11/30/01... 10.58 (.07) (2.07) (2.14) 0.00 0.00 0.00 0.00
AllianceBernstein
International Growth
Fund
Class A
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.15 .15(b) 2.46 2.61 (0.04) 0.00 0.00 0.00
Year ended 6/30/04.... 8.38 .05(f) 2.76 2.81 (0.04) 0.00 0.00 0.00
Year ended 6/30/03.... 8.19 .02 .17 .19 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 8.76 (.03) (.54) (.57) 0.00 0.00 0.00 0.00
Class B
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 10.38 .04(b) 2.30 2.34 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 7.84 (.03)(f) 2.57 2.54 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 7.72 (.04) .16 .12 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 8.32 (.09) (.51) (.60) [________] 0.00 0.00 0.00
Class C
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 10.38 .06(b) 2.28 2.34 0.00 0.00 0.00 0.00
Year ended 6/30/04.... 7.84 (.02)(f) 2.56 2.54 0.00 0.00 0.00 0.00
Year ended 6/30/03.... 7.72 (.04) .16 .12 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 8.32 (.09) (.51) (.60) 0.00 0.00 0.00 0.00
Advisor Class
Year ended 6/30/06.... $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____] $ [____]
Year ended 6/30/05.... 11.22 .22(b) 2.45 2.67 (0.07) 0.00 0.00 0.00
Year ended 6/30/04.... 8.44 .13(f) 2.72 2.85 (0.07) 0.00 0.00 0.00
Year ended 6/30/03.... 8.21 .06 .17 .23 0.00 0.00 0.00 0.00
Year ended 6/30/02.... 8.76 (.01) (.54) (.55) 0.00 0.00 0.00 0.00
Please refer to the footnotes on pages [___] and [___].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
------------------ ------------------------
Net
Net Assets
Distributions Total Asset End of Ratio of Ratio of Net
in Excess Dividends Value, Period Expenses Income (Loss) Portfolio
of Capital and End of Total (000's to Average to Average Turnover
Gains Distributions Period Return(b) omitted) Net Assets Net Assets Rate
----- ------------- ------ --------- -------- ---------- ---------- ----
AllianceBernstein Global
Research Growth Fund
Class A
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.09) 14.47 10.06 33,944 1.50(d) (.15)(b) 66
Year ended 6/30/04.... 0.00 (.77) 13.23 23.86 20,562 1.50(d) (.16)(f) 85
7/22/02++ to 6/30/03.. 0.00 0.00 11.33 13.30 1 1.70*(d) (.70)*(f) 62
Class B
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.09) 14.17 9.34 641 2.20(d) (.67)(b) 66
Year ended 6/30/04.... 0.00 (.76) 13.04 22.87 162 2.21(d) (2.22)(f) 85
7/22/02++ to 6/30/03.. 0.00 0.00 11.26 12.60 1 2.40*(d) (.78)*(f) 62
Class C
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.09) 14.17 9.34 934 2.20(d) (.80)(b) 66
Year ended 6/30/04.... 0.00 (.76) 13.04 22.87 468 2.20(d) (.73)(f) 85
7/22/02++ to 6/30/03.. 0.00 0.00 11.26 12.60 1 2.40*(d) (.78)*(f) 62
Advisor Class
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.09) 14.56 10.43 26,104 1.20(d) .13(b) 66
Year ended 6/30/04.... 0.00 (.80) 13.27 24.17 20,202 1.26(d) .08(f) 85
7/22/02++ to 6/30/03.. 0.00 0.00 11.36 13.60 2,270 1.40*(d) .22*(f) 62
AllianceBernstein
International Research
Growth Fund
Class A
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 10.26 20.71 91,949 1.94(d) (.29)(b) 136
Year ended 7/31/04.... 0.00 0.00 8.50 12.73 22,001 2.23(d) (.81)(f) 84
12/1/02 to 7/31/03+... 0.00 0.00 7.54 3.15 23,851 2.50*(d) (.68)*(b) 56
Year ended 11/30/02... 0.00 0.00 7.31 (12.56) 27,456 2.47 (1.17)(b) 75
Year ended 11/30/01... 0.00 0.00 8.36 (20.38) 40,555 2.17 (1.06) 171
Class B
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 9.71 19.88 82,622 2.76(d) (1.01)(b) 136
Year ended 7/31/04.... 0.00 0.00 8.10 11.72 38,430 2.99(d) (1.57)(f) 84
12/1/02 to 7/31/03+... 0.00 0.00 7.25 2.69 45,815 3.20*(d) (1.38)*(b) 56
Year ended 11/30/02... 0.00 0.00 7.06 (13.05) 52,744 3.20(d) (1.88)(b) 75
Year ended 11/30/01... 0.00 0.00 8.12 (21.09) 80,353 2.92 (1.84) 171
Class C
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 9.71 19.88 27,911 2.70(d) (.96)(b) 136
Year ended 7/31/04.... 0.00 0.00 8.10 11.72 12,417 2.97(d) (1.54)(f) 84
12/1/02 to 7/31/03+... 0.00 0.00 7.25 2.69 15,257 3.20*(d) (1.37)*(b) 56
Year ended 11/30/02... 0.00 0.00 7.06 (13.16) 17,942 3.20(d) (1.90)(b) 75
Year ended 11/30/01... 0.00 0.00 8.13 (20.99) 28,990 2.88 (1.80) 171
Advisor Class
Year ended 7/31/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 7/31/05.... 0.00 0.00 10.47 21.04 33,754 1.67(d) .30(b) 136
Year ended 7/31/04.... 0.00 0.00 8.65 12.92 14,407 1.90(d) (.37)(f) 84
12/1/02 to 7/31/03+... 0.00 0.00 7.66 3.37 12,629 2.20*(d) (.32)*(b) 56
Year ended 11/30/02... 0.00 0.00 7.41 (12.20) 11,437 2.18 (.85) 75
Year ended 11/30/01... 0.00 0.00 8.44 (20.23) 14,116 1.86 (.78) 171
AllianceBernstein
International Growth
Fund
Class A
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.04) 13.72 23.44 310,073 1.57(d) 1.17(b) 47
Year ended 6/30/04.... 0.00 (.04) 11.15 33.57 202,899 1.89(d) .49(f) 50
Year ended 6/30/03.... 0.00 0.00 8.38 2.32 163,406 2.29 .23 29
Year ended 6/30/02.... 0.00 0.00 8.19 (6.51) 183,160 2.10 (.40) 43
Class B
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 12.72 22.54 66,613 2.33(d) .33(b) 47
Year ended 6/30/04.... 0.00 0.00 10.38 32.40 56,959 2.67(d) .30(f) 50
Year ended 6/30/03.... 0.00 0.00 7.84 1.55 48,183 3.08 (.61) 29
Year ended 6/30/02.... 0.00 0.00 7.72 (7.21) 65,724 2.89 (1.19) 43
Class C
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 0.00 12.72 22.54 29,957 2.29(d) .55(b) 47
Year ended 6/30/04.... 0.00 0.00 10.38 32.40 16,005 2.65(d) (.26)(f) 50
Year ended 6/30/03.... 0.00 0.00 7.84 1.55 12,092 3.06 (.57) 29
Year ended 6/30/02.... 0.00 0.00 7.72 (7.21) 15,541 2.85 (1.18) 43
Advisor Class
Year ended 6/30/06.... $[____] $[____] $[____] [____]% $[____] [____]% [____]% [____]%
Year ended 6/30/05.... 0.00 (.07) 13.82 23.86 8,404 1.25(d) 1.74(b) 47
Year ended 6/30/04.... 0.00 (.07) 11.22 38.81 2,817 1.54(d) 1.29(f) 50
Year ended 6/30/03.... 0.00 0.00 8.44 2.80 744 1.98 .74 29
Year ended 6/30/02.... 0.00 0.00 8.21 (6.28) 808 1.80 (.18) 43
+ Change in fiscal year end.
++ Commencement of operations.
* Annualized.
(a) Based on average shares outstanding.
(b) Net of fee waiver and expense reimbursement by the Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at the net asset value during the period, and a
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total return does not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption
of fund shares. Total investment returns calculated for periods of less
than one year are not annualized.
(d) Net of expenses assumed and/or waived/reimbursed. If the following Funds
had borne all expenses in their most recent five fiscal years, their
expense ratios, without giving effect to the expense offset arrangement
described in (e) below, would have been as follows:
[Download Table]
2001 2002 2003 2004 2005 2006
---- ---- ---- ---- ---- ----
AllianceBernstein Large
Cap Growth Fund
Class A -- -- -- 1.76% 1.53% [___]%
Class B -- -- -- 2.52% 2.28% [___]%
Class C -- -- -- 2.49% 2.25% [___]%
Advisor Class -- -- -- 1.46% 1.23% [___]%
AllianceBernstein Growth Fund
Class A -- -- -- 1.52% -- [___]%
Class B -- -- -- 2.27% -- [___]%
Class C -- -- -- 2.24% -- [___]%
Advisor Class -- -- -- 1.22% -- [___]%
AllianceBernstein
Mid-Cap Growth Fund
Class A -- -- -- 1.26% -- [___]%
Class B -- -- -- 2.10% -- [___]%
Class C -- -- -- 2.07% -- [___]%
Advisor Class -- -- -- 1.05% -- [___]%
AllianceBernstein Small Cap
Growth Portfolio
Class A -- -- -- 2.01% 1.63% [___]%
Class B -- -- -- 2.81% 2.43% [___]%
Class C -- -- -- 2.77% 2.39% [___]%
Advisor Class -- -- -- 1.74% 1.37% [___]%
AllianceBernstein Global
Technology Fund
Class A -- -- -- 1.81% 1.68% [___]%
Class B -- -- -- 2.58% 2.46% [___]%
Class C -- -- -- 2.55% 2.41% [___]%
Advisor Class -- -- -- 1.51% 1.38% [___]%
AllianceBernstein Global
Health Care Fund
Class A -- -- -- 1.93% 1.84% [___]%
Class B -- -- -- 2.69% 2.59% [___]%
Class C -- -- -- 2.66% 2.56% [___]%
Advisor Class -- -- -- 1.62% 1.54% [___]%
AllianceBernstein Global
Research Growth Fund
Class A -- -- 19.19%* 7.68% 2.51% [___]%
Class B -- -- 19.94%* 11.40% 3.44% [___]%
Class C -- -- 19.94%* 10.96% 3.28% [___]%
Advisor Class -- -- 17.42%* 7.46% 2.18% [___]%
AllianceBernstein International
Research Growth Fund
Class A -- -- 2.99%* 2.46% 2.09% [___]%
Class B -- 3.25% 3.79%* 3.26% 2.92% [___]%
Class C -- 3.20% 3.73%* 3.21% 2.86% [___]%
Advisor Class -- -- 2.70%* 2.13% 1.85% [___]%
AllianceBernstein International
Growth Fund
Class A -- -- -- 2.04% 1.61% [___]%
Class B -- -- -- 2.82% 2.37% [___]%
Class C -- -- -- 2.80% 2.33% [___]%
Advisor Class -- -- -- 1.69% 1.29% [___]%
(e) Amounts do not reflect the impact of expense offset arrangements with the
transfer agent. Taking into account such expense offset arrangements, the
ratio of expenses to average net assets, assuming the assumption and/or
waiver/reimbursement of expenses described in (d) above, would have been as
follows:
AllianceBernstein International
Research Growth Fund 2005
Class A [_______]%
Class B [_______]%
Class C [_______]%
Advisor Class [_______]%
(f) Net of fees and expenses waived/reimbursed by the Adviser and the transfer
agent.
(g) Amount is less than $0.01.
APPENDIX A - HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION
The settlement agreement between the Adviser and the NYAG requires the Funds to
include the following supplemental hypothetical investment information that
provides additional information calculated and presented in a manner different
from expense information found under "Fees and Expenses of the Funds" in this
Prospectus about the effect of a Fund's expenses, including investment advisory
fees and other Fund costs, on the Fund's returns over a 10-year period. The
chart shows the estimated expenses (net of any fee or expense waiver for the
first year) that would be charged on a hypothetical investment of $10,000 in
Class A shares of the Fund assuming a 5% return each year, including an initial
sales charge of 4.25%. Except as otherwise indicated, the chart also assumes
that the current annual expense ratio stays the same throughout the 10-year
period. The current annual expense ratio for each Fund is the same as stated
under "Fees and Expenses of the Funds." If you wish to obtain hypothetical
investment information for other classes of shares of the Fund, please refer to
the "Mutual Fund Fees and Expenses Calculators" on www.AllianceBernstein.com.
Your actual expenses may be higher or lower.
AllianceBernstein Large Cap Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Mid-Cap Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Small Cap Growth Portfolio
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Global Technology Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Global Health Care Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein Global Research Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses* Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein International Research Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses* Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
AllianceBernstein International Growth Fund
--------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---- ---------- -------- ------- -------- ----------
1 $10,000.00 $[________] $[________] $[________] $[________]
2 [________] [________] [________] [________] [________]
3 [________] [________] [________] [________] [________]
4 [________] [________] [________] [________] [________]
5 [________] [________] [________] [________] [________]
6 [________] [________] [________] [________] [________]
7 [________] [________] [________] [________] [________]
8 [________] [________] [________] [________] [________]
9 [________] [________] [________] [________] [________]
10 [________] [________] [________] [________] [________]
Cumulative $[________] $[________]
----------
* Expenses are net of any fee waiver or expense waiver for the first year.
Thereafter, the expense ratio reflects the Fund's operating expenses as
reflected under "Fees and Expenses of the Funds" before waiver.
For more information about the Funds, the following documents are available upon
request:
o ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected a Fund's performance during its last fiscal year.
o STATEMENT OF ADDITONAL INFORMATION (SAI)
Each Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Funds' SAIs and the
independent registered public accounting firm's report and financial statements
in each Fund's most recent annual report to shareholders are incorporated by
reference into (and are legally part of) this Prospectus.
You may request a free copy of the current annual/semi-annual report or the SAI,
or make inquiries concerning the Funds, by contacting your broker or other
financial intermediary, or by contacting the Adviser:
By Mail: AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By Phone: For Information: (800) 221-5672
For Literature: (800) 227-4618
Or you may view or obtain these documents from the Commission:
o Call the Commission at 1-202-551-8090 for information on the operation of
the Public Reference Room.
o Reports and other information about the Fund are available on the EDGAR
Database on the Commission's Internet site at http://www.sec.gov
o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at publicinfo@sec.gov, or by writing the Commission's
Public Reference Section, Washington DC 20549-0102
On the Internet: www.sec.gov
You also may find these documents and more information about the Adviser and the
Funds on the Internet at: www.alliancebernstein.com.
AllianceBernstein(R) and the AB Logo are registered trademarks and service marks
used by permission of the owner, AllianceBernstein L.P.
Fund SEC File No.
AllianceBernstein Large Cap Growth Fund 811-06730
AllianceBernstein Growth Fund 811-05088
AllianceBernstein Mid-Cap Growth Fund 811-00204
AllianceBernstein Small Cap Growth Portfolio 811-01716
AllianceBernstein Global Technology Fund 811-03131
AllianceBernstein Global Health Care Fund 811-09329
AllianceBernstein Global Research Growth Fund 811-21064
AllianceBernstein International Research Growth Fund 811-08527
AllianceBernstein International Growth Fund 811-08426
--------------------------------------------------------------------------------
Privacy Notice (This information is not part of the Prospectus.)
AllianceBernstein L.P., the AllianceBernstein Family of Funds and
AllianceBernstein Investments, Inc. (collectively, "AllianceBernstein" or "we")
understand the importance of maintaining the confidentiality of our clients'
nonpublic personal information. Nonpublic personal information is personally
identifiable financial information about our clients who are natural persons. To
provide financial products and services to our clients, we may collect
information about clients from sources, including: (1) account documentation,
including applications or other forms, which may contain information such as a
client's name, address, phone number, social security number, assets, income and
other household information, (2) clients' transactions with us and others, such
as account balances and transactions history, and (3) information from visitors
to our websites provided through online forms, site visitorship data and online
information collecting devices known as "cookies" .
It is our policy not to disclose nonpublic personal information about our
clients (or former clients) except to our affiliates, or to others as permitted
or required by law. From time to time, AllianceBernstein may disclose nonpublic
personal information that we collect about our clients (or former clients), as
described above, to non-affiliated third parties, including those that perform
processing or servicing functions and those that provide marketing services for
us or on our behalf under a joint marketing agreement that requires the third
party provider to adhere to AllianceBernstein's privacy policy. We have policies
and procedures to safeguard nonpublic personal information about our clients (or
former clients) that include restricting access to such nonpublic personal
information and maintaining physical, electronic and procedural safeguards, that
comply with applicable standards, to safeguard such nonpublic personal
information.
--------------------------------------------------------------------------------
SK 00250 0157 667153
ALLIANCEBERNSTEIN INVESTMENTS [LOGO]
--------------------------------------------------------------------------------
The AllianceBernstein Growth Funds
| Growth Funds -- Retirement Shares |
--------------------------------------------------------------------------------
PROSPECTUS--November 1, 2006
--------------------------------------------------------------------------------
The AllianceBernstein Growth Funds provide a Domestic Growth Funds
broad selection of investment alternatives to
investors seeking capital growth or high > AllianceBernstein Large Cap
total return. Growth Fund
> AllianceBernstein Growth
Fund
> AllianceBernstein Mid-Cap
Growth Fund
> AllianceBernstein Small Cap
Growth Portfolio
Global Growth Funds
> AllianceBernstein Global
Technology Fund
> AllianceBernstein Global
Health Care Fund
> AllianceBernstein Global
Research Growth Fund
> AllianceBernstein
International Growth Fund
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
Investment Products Offered
---------------------------
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
---------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Page
SUMMARY INFORMATION............................................................4
DOMESTIC GROWTH FUNDS..........................................................6
ALLIANCEBERNSTEIN LARGE CAP GROWTH FUND........................................6
ALLIANCEBERNSTEIN GROWTH FUND..................................................9
ALLIANCEBERNSTEIN MID-CAP GROWTH FUND.........................................11
ALLIANCEBERNSTEIN SMALL CAP GROWTH PORTFOLIO..................................13
GLOBAL GROWTH FUNDS...........................................................15
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FUND......................................15
ALLIANCEBERNSTEIN GLOBAL HEALTH CARE FUND.....................................18
ALLIANCEBERNSTEIN GLOBAL RESEARCH GROWTH FUND.................................20
ALLIANCEBERNSTEIN INTERNATIONAL GROWTH FUND...................................23
RISKS SUMMARY.................................................................25
FEES AND EXPENSES OF THE FUNDS................................................27
INVESTING IN THE FUNDS........................................................32
How to Buy Shares...........................................................32
The Different Share Class Expenses..........................................32
Distribution Arrangements for Group Retirement Plans........................33
Payments to Financial Intermediaries........................................34
How to Exchange Shares......................................................36
How to Sell or Redeem Shares................................................36
Frequent Purchases and Redemptions of Fund Shares...........................36
How the Funds Value Their Shares............................................38
MORE INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS........................40
MANAGEMENT OF THE FUNDS.......................................................50
DIVIDENDS, DISTRIBUTIONS AND TAXES............................................63
GENERAL INFORMATION...........................................................64
GLOSSARY OF INVESTMENT TERMS..................................................65
FINANCIAL HIGHLIGHTS..........................................................66
APPENDIX A - HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION..................74
SUMMARY INFORMATION
This prospectus begins with a summary of key information about each of the
AllianceBernstein(R) Growth Funds. The Summary describes a Fund's objective,
investment strategies, principal risks, and fees. You will find additional
information about the Funds and their investments beginning on page [___].
Performance Information
-----------------------
This Summary includes a table for each Fund showing its average annual returns
and a bar chart showing its annual returns. The table and bar chart provide an
indication of the historical risk of an investment in each Fund by showing:
o how the Fund's average annual returns for one, five and ten years (or
over the life of the Fund) compare to those of a broad based
securities market index; and
o how the Fund's performance changed from year to year over the life of
the Fund.
----------------------------------------------
PLEASE NOTE
A Fund's past performance before and after
taxes, of course, does not necessarily
indicate how it will perform in the future.
As with all investments, you may lose money
by investing in the Fund.
----------------------------------------------
Risk
----
--------------------------------------------------------------------------------
WHY IS RISK IMPORTANT?
You should consider risk carefully when investing in a Fund. You could put your
money in investments that have very little risk (for example, certificates of
deposit issued by a bank), but these investments would typically have a lower
return than a riskier investment. In other words, you should get a higher return
if your investments have more risk.
We have included a graphic for each Fund that shows the Fund's risk profile as
compared to our other funds. The bar chart for each Fund also gives an
indication of a Fund's overall risk. A Fund with a higher variability of returns
is a riskier investment.
--------------------------------------------------------------------------------
This Summary lists the principal risks for each Fund followed by an explanation
of these risks. Generally, each Fund has broad risks that apply to all funds,
such as market risk, as well as specific risks of investing in particular types
of securities, such as foreign (non-U.S.) securities risk or small- or
mid-capitalization risk. The risks of a Fund may be increased by the use of
derivatives, such as futures, options and swaps.
--------------------------------------------------------------------------------
WHAT IS MARKET RISK?
Market risk is the risk that factors affecting the securities markets generally
will cause a possibly adverse change in the value of the securities owned by a
Fund. The value of these securities may decline simply because of economic
changes or other events that impact large portions of the market. The factors
include real or perceived unfavorable market conditions, increases in the rate
of inflation, and changes in the general outlook for consumer spending, or
corporate earnings. Each of the Funds is subject to this risk.
--------------------------------------------------------------------------------
General
-------
o The Fund's investment adviser is AllianceBernstein L.P., or the
"Adviser", a global investment manager providing diversified services
to institutions and individuals through a broad line of investments
including more than 120 mutual funds.
o Each Fund may enter into derivatives transactions, such as options,
futures, forwards and swap agreements.
o References to "net assets" mean the assets of a Fund after
liabilities, plus any borrowings used for investment purposes. In
other words, net assets reflects the value of a Fund's investments.
o Funds that have a policy to invest at least 80% of their net assets in
securities indicated by their name, such as AllianceBernstein Large
Cap Growth Fund or AllianceBernstein Global Technology Fund, will not
change these policies without 60 days' prior written notice to
shareholders.
o The Adviser employs an active, growth-oriented approach in the
management of equity portfolios. The growth universe is defined
broadly to take advantage of growth opportunities wherever they may
arise.
Research is the cornerstone of the Adviser's growth investment
process, primarily based on internally generated analysis. The process
seeks to identify companies that have underappreciated growth
prospects. We believe that in-depth, "on-the-ground," fundamental
research is the key to investment success. To achieve this goal, the
Adviser has built a global research platform comprised of fundamental
analysts together with portfolio managers located in markets around
the world, which allows them the opportunity to closely monitor the
companies they follow.
DOMESTIC GROWTH FUNDS
The Domestic Growth Funds offer investors seeking capital appreciation a range
of alternative approaches to investing primarily in U.S. equity markets.
AllianceBernstein Large Cap Growth Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in equity securities of a limited number of large,
carefully selected, high-quality U.S. companies. The Adviser tends to focus on
those companies that have strong management, superior industry positions,
excellent balance sheets and superior earnings growth prospects.
Under normal circumstances, the Fund will invest at least 80% of its net assets
in common stocks of large-capitalization companies. For these purposes,
"large-capitalization companies" are those that, at the time of investment, have
market capitalizations within the range of market capitalizations of companies
appearing in the Russell 1000(R) Growth Index. While the market capitalizations
of companies in the Russell 1000(R) Growth Index ranged from $[____] million to
almost $[____] billion as of September 30, 2006, the Fund normally will invest
in common stocks of companies with market capitalizations of at least $5 billion
at the time of purchase.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose
substantially above average prospective earnings growth is not fully reflected
in current market valuations.
Normally, the Fund invests in about 40 - 60 companies, with the 25 most highly
regarded of these companies usually constituting approximately 70% of the Fund's
net assets. The Fund is thus atypical from most equity mutual funds in its focus
on a relatively small number of intensively researched companies. The Adviser
expects that normally the Fund's portfolio will tend to emphasize investments in
securities issued by U.S. companies, although it may invest in foreign
securities. The Fund is designed for those seeking to accumulate capital over
time with less volatility than that associated with investment in smaller
companies.
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Focused Portfolio Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
10
1 Year** 5 Years** Years**
--------------------------------------------------------------------------------
Class A 9.29%* -5.69% 6.61%
--------------------------------------------------------------------------------
Class R 14.18% -5.01% 6.88%
--------------------------------------------------------------------------------
Class K 14.59% -4.75% 7.17%
--------------------------------------------------------------------------------
Class I 14.81% -4.52% 7.43%
--------------------------------------------------------------------------------
Russell 1000 Growth Index (reflects no deduction 5.26% -3.58% 6.73%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Dates for Class R shares: 11/3/03, and for Class K and I shares:
3/1/05. Performance information for periods prior to the inception of Class
R, Class K and Class I shares is the performance of the Fund's Class A
shares adjusted to reflect the higher expense ratio of Class R shares and
the lower expense ratios of Class K and Class I shares, respectively.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
24.14 32.67 49.31 28.98 -19.87 -23.92 -32.38 22.71 8.19 14.15
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 31.05%, 4th quarter,1998; and Worst Quarter was down
-19.84%, 3rd quarter, 2001.
AllianceBernstein Growth Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund seeks to achieve its objective by investing primarily in equity
securities of companies with favorable earnings outlooks whose long-term growth
rates are expected to exceed that of the U.S. economy over time. The Adviser
relies heavily upon the fundamental analysis and research of its large internal
research staff. The Adviser looks for companies whose prospective earnings
growth is not fully reflected in current market valuations. The Adviser seeks to
invest in well-managed companies that are leaders in their industries, with
strong business franchises, sustainable competitive advantages and superior
growth prospects.
Investment selections are made from a universe of more than 500 covered
securities. Normally, the Fund invests in approximately 45-70 companies. The
Fund emphasizes investments in large- and mid-capitalization companies, however,
the Fund has the flexibility to invest across the capitalization spectrum. The
Fund is designed for those seeking to accumulate capital over time with exposure
to companies of various sizes.
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Capitalization Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
10
1 Year** 5 Years** Years**
--------------------------------------------------------------------------------
Class A 6.89%* -2.22% 6.27%
--------------------------------------------------------------------------------
Class R 11.69% -1.51% 6.54%
--------------------------------------------------------------------------------
Class K 11.92% -1.28% 6.80%
--------------------------------------------------------------------------------
Class I 12.23% -1.03% 7.07%
--------------------------------------------------------------------------------
Russell 3000 Growth Index (reflects no deduction 5.17% -3.15% 6.48%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Date for Class R, Class K and I shares: 3/1/05. Performance
information for periods prior to the inception of Class R, Class K and
Class I shares is the performance of the Fund's Class A shares adjusted to
reflect the higher expense ratio of Class R shares and the lower expense
ratios of Class K and Class I shares, respectively.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
23.20 27.09 28.17 25.59 -18.47 -24.49 -28.63 34.88 15.03 11.64
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 28.86%, 4th quarter, 1998; and Worst Quarter was down
-23.60%, 1st quarter, 2001.
AllianceBernstein Mid-Cap Growth Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund normally invests substantially all of its assets in high-quality equity
securities that the Adviser believes offer the possibility of above-average
long-term growth rates. Under normal circumstances, the Fund invests at least
80% of its net assets in common stocks of mid-capitalization companies. For
these purposes, "mid-capitalization companies" are those that, at the time of
investment, have market capitalizations within the range of market
capitalizations of companies constituting the Russell Midcap(R) Growth Index.
The market capitalizations of companies in the Russell Midcap(R) Growth Index
ranged from $[_____] million to $[______] billion as of September 30, 2006. The
capitalization range of companies in the Russell Midcap(R) Growth Index will
change with the markets and the Fund typically invests in common stocks with
market capitalizations of between $[1] billion and $[15] billion at time of
purchase.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations. In addition
to the fundamental company research provided by the Adviser's research staff,
the Fund utilizes a top-down, thematic approach to manage the portfolio. This
may include the incorporation of economic, sector and industry level factors in
portfolio decisions.
Normally the Fund invests in securities of a smaller number of companies,
usually about 40 to 70 companies, with the 25 most highly regarded of these
companies usually constituting approximately 70% of the Fund's net assets .
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Focused Portfolio Risk
o Capitalization Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
10
1 Year** 5 Years** Years**
--------------------------------------------------------------------------------
Class A 2.16%* 2.20% 6.91%
--------------------------------------------------------------------------------
Class R 6.35% 2.84% 7.15%
--------------------------------------------------------------------------------
Class K 6.72% 3.12% 7.43%
--------------------------------------------------------------------------------
Class I 6.92% 3.37% 7.69%
--------------------------------------------------------------------------------
Russell Mid-Cap
Growth Index (reflects no deduction 12.10% 1.38% 9.27%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Date for Class R, Class K and I shares: 3/1/05. Performance
information for periods prior to the inception of Class R, Class K and
Class I shares is the performance of the Fund's Class A shares adjusted to
reflect the higher expense ratio of Class R shares and the lower expense
ratios of Class K and Class I shares, respectively.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
17.54 36.01 -2.72 33.90 -15.88 -18.09 -32.72 65.96 19.23 6.71
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 26.41%, 4th quarter, 1999; and Worst Quarter was down
-25.52%, 3rd quarter, 2001.
AllianceBernstein Small Cap Growth Portfolio
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
Under normal circumstances, the Fund invests at least 80% of its net assets in
equity securities of smaller companies. For these purposes, "smaller companies"
are those that, at the time of investment, fall within the lowest 20% of the
total U.S. equity market capitalization (excluding, for purposes of this
calculation, companies with market capitalizations of less than $10 million).
Because the Fund's definition of smaller companies is dynamic, the upper limit
on market capitalization will change with the markets. As of September 30, 2006,
there were approximately [_____] smaller companies, and those smaller companies
had market capitalizations ranging up to approximately $[____] billion.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth has been underestimated by the marketplace or whose earnings
prospects are not fully reflected in current market valuations.
The Fund may invest in any company and industry and in any type of security with
potential for capital appreciation. It invests in well-known and established
companies and in new and less seasoned companies. The Fund's investment policies
emphasize investments in companies that are demonstrating improving fundamentals
and favorable earnings momentum.
Normally, the Fund invests in about 95-125 companies. When selecting securities,
the Adviser typically looks for companies that have strong, experienced
management teams, strong market positions, and the potential to support
above-average earnings growth rates. In making specific investment decisions for
the Fund, the Adviser will employ a "bottom-up" stock selection process. The
Fund may periodically invest in the securities of companies that are expected to
appreciate due to a development particularly or uniquely applicable to that
company regardless of general business conditions or movements of the market as
a whole.
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Capitalization Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
10
1 Year** 5 Years** Years**
--------------------------------------------------------------------------------
Class A 0.25%* -0.08% 4.42%
--------------------------------------------------------------------------------
Class R 4.72% 0.63% 4.69%
--------------------------------------------------------------------------------
Class K 5.02% 0.89% 4.96%
--------------------------------------------------------------------------------
Class I 5.36% 1.15% 5.23%
--------------------------------------------------------------------------------
Russell 2000 Growth Index (reflects no deduction 4.15% 2.28% 4.69%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Date for Class R, Class K and I shares: 3/1/05. Performance
information for periods prior to the inception of Class R, Class K and
Class I shares is the performance of the Fund's Class A shares adjusted to
reflect the higher expense ratio of Class R shares and the lower expense
ratios of Class K and Class I shares, respectively.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
32.62 17.24 -4.57 12.96 -7.61 -13.64 -31.84 48.09 13.95 4.71
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 25.05%, 4th quarter, 2001; and Worst Quarter was down
-28.79[_______]%, 3rd quarter, 2001.
GLOBAL GROWTH FUNDS
The Global Growth Funds offer investors seeking long-term capital appreciation a
range of alternative approaches to investing in foreign securities.
AllianceBernstein Global Technology Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in equity securities of companies expected to derive
a substantial portion of their income from products and services in
technology-related industries and/or to benefit from technological advances and
improvements (i.e., companies principally engaged in the production, creation,
marketing or distribution of technology products and services or that use
technology extensively). The Fund will normally invest at least 80% of its net
assets in the equity securities of these companies.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations.
Normally, the Fund invests in about 40-70 companies from multiple industry
segments, in an attempt to maximize opportunity and reduce risk. When selecting
securities, the Adviser emphasizes companies that are demonstrating improving
fundamentals and favorable earnings momentum and companies that demonstrate the
potential to support above-average earnings growth rates.
The Fund invests in a global portfolio of securities issued by U.S. and non-U.S.
companies selected for their capital appreciation potential. The percentage of
the Fund's assets invested in securities of companies in a particular country or
denominated in a particular currency varies in accordance with the Adviser's
assessment of the appreciation potential of such securities. The Fund may invest
without limit in securities of issuers in any one foreign country and in
emerging market countries. The Fund may also invest in synthetic foreign equity
securities.
The Fund may invest in any company and industry and in any type of security,
listed and unlisted, with potential for capital appreciation. It invests in
well-known, established companies as well as new, smaller or less-seasoned
companies. Investments in new, smaller or less-seasoned companies may offer more
reward but may also entail more risk than is generally true of larger,
established companies.
PRINCIPAL RISKS:
-----------------------------------------------------
o Market Risk o Emerging Market Risk
o Industry/Sector Risk o Currency Risk
o Foreign Risk o Capitalization Risk
-----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
10
1 Year** 5 Years** Years**
--------------------------------------------------------------------------------
Class A 0.50%* -8.78% 5.24%
--------------------------------------------------------------------------------
Class R 5.01% -8.12% 5.51%
--------------------------------------------------------------------------------
Class K 5.40% -7.88% 5.78%
--------------------------------------------------------------------------------
Class I 5.70% -7.61% 6.06%
--------------------------------------------------------------------------------
MSCI World Index (Net)+ (reflects no deduction 9.49% 2.18% 7.04%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
MSCI World Information (reflects no deduction
Technology Index (Net)+# for fees, expenses, or
taxes) 4.81% -7.19% N/A
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Dates for Class R shares: 11/3/03, and for Class K and I shares:
3/1/05. Performance information for periods prior to the inception of Class
R, Class K and Class I shares is the performance of the Fund's Class A
shares adjusted to reflect the higher expense ratio of Class R shares and
the lower expense ratios of Class K and Class I shares, respectively.
+ The MSCI World Information Technology Index (Net) and the MSCI World Index
(Net) reflect the reinvestment of dividends net of non-U.S. withholding
taxes.
# The information in the MSCI World Information Technology Index (Net) shows
how the Fund's performance compares with the returns of an index of
securities similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
19.41 4.54 63.14 71.78 -24.62 -25.88 -42.95 41.67 4.93 4.97
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 44.57%,4th quarter, 1999; and Worst Quarter was down
-35.31%, 3rd quarter, 2001.
AllianceBernstein Global Health Care Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
Under normal circumstances, the Fund invests at least 80%, and normally
substantially all, of its net assets in equity securities issued by companies
principally engaged in health care and health care-related industries ("Health
Care Industries") (companies principally engaged in the discovery, development,
provision, production or distribution of products and services that relate to
the diagnosis, treatment and prevention of diseases or other medical disorders).
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations.
The Fund seeks primarily to take advantage of capital appreciation opportunities
identified by the Adviser in emerging technologies and services in Health Care
Industries by investing in a portfolio of securities of U.S. and non-U.S.
companies that are expected to profit from the development of new products and
services for these industries. The Adviser adjusts the Fund's exposure to
particular national economies based on its perception of the most favorable
markets and issuers. The percentage of the Fund's assets invested in securities
of companies in a particular country or denominated in a particular currency
varies in accordance with the Adviser's assessment of the appreciation potential
of such securities and the strength of that currency.
Normally, the Fund invests in securities of a smaller number of companies,
usually about 25 to 45 companies. The Fund may invest in new, smaller or
less-seasoned companies as well as in larger, established companies in Health
Care Industries. Investments in new, smaller or less-seasoned companies may
offer more reward but may also entail more risk than is generally true of
larger, established companies. The Fund may invest in foreign securities,
foreign government securities and securities issued by U.S. companies as the
Adviser considers most advantageous. The Fund may invest without limit in
securities of issuers in any one foreign country and in emerging market
countries. The Fund may also invest in synthetic foreign equity securities.
PRINCIPAL RISKS:
-------------------------------------------------------
o Market Risk o Currency Risk
o Industry/Sector Risk o Capitalization Risk
o Foreign Risk o Focused Portfolio Risk
o Emerging Market Risk
-------------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
1 5 Since
Year** Years** Inception**
--------------------------------------------------------------------------------
Class A 12.43%* -0.29% 4.65%
--------------------------------------------------------------------------------
Class R 17.35% 0.42% 5.18%
--------------------------------------------------------------------------------
Class K 17.65% 0.67% 5.44%
--------------------------------------------------------------------------------
Class I 17.96% 0.93% 5.71%
--------------------------------------------------------------------------------
MSCI World Index (Net)+ (reflects no deduction 9.49% 2.18% 1.80%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
MSCI World Healthcare (reflects no deduction
Index (Net)+# for fees, expenses, or
taxes) 9.00% -0.35% 2.94%
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Date for Class A shares: 8/27/99, and for Class R, Class K and I
shares: 3/1/05. Performance information for periods prior to the inception
of Class R, Class K and Class I shares is the performance of the Fund's
Class A shares adjusted to reflect the higher expense ratio of Class R
shares and the lower expense ratios of Class K and Class I shares,
respectively.
+ The MSCI World Healthcare Index (Net) and the MSCI World Index (Net)
reflect the reinvestment of dividends net of non-U.S. withholding taxes.
# The information in the MSCI World Healthcare Index (Net) shows how the
Fund's performance compares with the returns of an index of securities
similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
n/a n/a n/a n/a 31.44 -17.56 -17.24 21.05 6.22 17.39
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 13.76%, 2nd quarter, 2000; and Worst Quarter was down
-19.20%, 1st quarter, 2001.
AllianceBernstein Global Research Growth Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is to seek long-term growth of capital.
The Fund invests primarily in a global portfolio of equity securities of
companies within various market sectors selected by the Adviser for their growth
potential. Examples of the types of market sectors into which the Adviser may
invest the Fund's assets include, but are not limited to, communications and
information technology, health care, financial services, infrastructure, energy
and natural resources, and consumer growth.
The Adviser relies heavily upon the fundamental analysis and research of its
large internal research staff. The Adviser looks for companies whose prospective
earnings growth is not fully reflected in current market valuations. As one of
the largest multi-national investment management firms, the Adviser has access
to considerable information concerning the companies in its research universe,
an in-depth understanding of the products, services, markets and competition of
these companies, and a good knowledge of their management.
The Adviser's Global Research Growth Portfolio Oversight Group, in consultation
with the research sector heads, is responsible for determining the market
sectors into which the Fund's assets are invested and the percentage allocation
into each sector. The Adviser allocates the Fund's investments among the
selected market sectors based on fundamental company research and its assessment
of both current and forecasted investment opportunities and conditions. The
Adviser may vary the percentage allocation to each sector and may, on occasion,
change the market sectors into which the Fund's assets will be invested as a
sector's growth potential matures and new trends for growth emerge. The Adviser
believes that the ability to allocate assets among the industry sectors allows
the Fund to pursue the most attractive investment trends before companies within
a market sector become overpriced and to re-apportion investments as conditions
warrant. Through this process, the Adviser seeks to take advantage of the
relative attractiveness of different market sectors as growth trends mature and
new trends emerge.
Within each sector, stock selection emphasizes investment in companies
representing the research sector head groups' top picks for their respective
sectors. The Fund invests, under normal circumstances, in the equity securities
of companies located in at least three countries (and normally substantially
more), one of which may be the United States. The Fund invests in both developed
and emerging markets countries. Geographic distribution of the Fund's
investments among countries or regions also will be a product of the stock
selection process rather than a pre-determined allocation. The Fund may also
invest in synthetic foreign equity securities. The Adviser expects that normally
the Fund's portfolio will tend to emphasize investments in larger capitalization
companies, although it may invest in smaller or medium capitalization companies.
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Emerging Market Risk
o Foreign Risk o Allocation Risk
o Currency Risk o Capitalization Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
1
Year** Since Inception**
--------------------------------------------------------------------------------
Class A 10.89%* 16.74%
--------------------------------------------------------------------------------
Class R 15.62% 17.97%
--------------------------------------------------------------------------------
Class K 15.90% 18.27%
--------------------------------------------------------------------------------
Class I 16.16% 18.56%
--------------------------------------------------------------------------------
MSCI World Index (Net)+ (reflects no deduction 9.49% 14.84%
for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Dates for Class A shares: 7/22/02, for Class R shares: 9/01/04
and for Class K and I shares: 3/1/05. Performance information for periods
prior to the inception of Class R, Class K and Class I shares is the
performance of the Fund's Class A shares adjusted to reflect the higher
expense ratio of Class R shares and the lower expense ratios of Class K and
Class I shares, respectively.
+ The MSCI World Index (Net) reflects the reinvestment of dividends net of
non-U.S. withholding taxes.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
n/a n/a n/a n/a n/a n/a n/a 34.28 12.25 15.82
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 16.92%, 2nd quarter, 2003; and Worst Quarter was down
-4.91%, 1st quarter, 2003.
AllianceBernstein International Growth Fund
--------------------------------------------------------------------------------
---------------
GRAPHIC OMITTED
---------------
OBJECTIVE AND PRINCIPAL STRATEGIES:
The Fund's investment objective is long-term growth of capital.
The Fund invests primarily in an international portfolio of equity securities of
companies located in both developed and emerging countries. The Fund's
investment process relies upon comprehensive fundamental company research
produced by the Adviser's large research team of over 40 non-U.S. analysts
covering both developed and emerging markets around the globe. Research-driven
stock selection is the primary driver of the portfolio's return and all other
decisions, such as country allocation, are generally the result of the stock
selection process.
The Fund's Portfolio Managers and the International Growth Portfolio Oversight
Group, which are responsible for determining the market sectors into which the
Fund's assets are invested and the percentage allocation into each sector, use
the Adviser's research recommendations to assess investments for the Fund. They
also consider input from the heads of global sector research with the goal of
identifying the most attractive portfolio candidates that display superior
earnings growth and reasonable valuations. The Portfolio Management Team then
builds a portfolio concentrated in our best research-driven investment ideas
that capitalizes on the insights of our fundamental research within the optimal
risk/reward framework.
The Fund's portfolio normally consists of approximately 100-130 stocks. The
International Growth Portfolio Oversight Group regularly reviews the country and
sector allocations within the Fund to monitor the Fund's risk profile and to
make appropriate adjustments. The Fund invests, under normal circumstances, in
the equity securities of companies located in at least three countries (and
normally substantially more) other than the United States. The Fund's
investments include companies that are established as a result of privatizations
of state enterprises.
PRINCIPAL RISKS:
----------------------------------------------------
o Market Risk o Currency Risk
o Foreign Risk o Emerging Market Risk
----------------------------------------------------
Please see "Risks Summary" for a description of these and other risks of
investing in the Fund.
The table and bar chart provide an indication of the historical risk of an
investment in the Fund.
PERFORMANCE TABLE
--------------------------------------------------------------------------------
Average Annual Total Returns
(For the periods ended December 31, 2005)
--------------------------------------------------------------------------------
1 Year** 5 Years** 10 Years**
--------------------------------------------------------------------------------
Class A 14.70%* 9.56% 10.84%
--------------------------------------------------------------------------------
Class R 19.73% 10.33% 9.93%
--------------------------------------------------------------------------------
Class K 20.00% 10.60% 10.20%
--------------------------------------------------------------------------------
Class I 20.26% 10.87% 10.47%
--------------------------------------------------------------------------------
MSCI World Index (reflects no deduction 14.47% 4.92% 6.22%
(ex. U.S.) (Net)+ for fees, expenses, or
taxes)
--------------------------------------------------------------------------------
MSCI AC World Index (reflects no deduction
(ex. U.S.) (Net)+# for fees, expenses, or
taxes) 16.62% 6.27% N/A
--------------------------------------------------------------------------------
* Average annual total returns reflect imposition of the maximum contingent
deferred sales charge.
** Inception Date for Class R, Class K and I shares: 3/1/05. Performance
information for periods prior to the inception of Class R, Class K and
Class I shares is the performance of the Fund's Class A shares adjusted to
reflect the higher expense ratio of Class R shares and the lower expense
ratios of Class K and Class I shares, respectively.
+ The MSCI AC World Index (ex. U.S.) (Net) and the MSCI World Index (ex.
U.S.) (Net) reflect the reinvestment of dividends net of non-U.S.
withholding taxes.
# The information in the MSCI AC World Index (ex. U.S.) (Net) shows how the
Fund's performance compares with the returns of an index of securities
similar to those in which the Fund invests.
BAR CHART
--------------------------------------------------------------------------------
The annual returns in the bar chart are for the Fund's Class A shares and do not
reflect sales loads. If sales loads were reflected, returns would be less than
those shown. Through September 30, 2006, the year-to-date unannualized return
for Class A shares was [____]%.
[The following table was depicted as a bar chart in the printed material.]
23.14 13.18 8.92 56.33 -25.33 -18.13 -6.22 44.72 23.85 19.83
--------------------------------------------------------------------------------
96 97 98 99 00 01 02 03 04 05
Calendar Year End
You should consider an investment in the Fund as a long-term investment. The
Fund's returns will fluctuate over long and short periods. For example, during
the period shown in the bar chart, the Fund's:
Best Quarter was up 34.15%, 4th quarter, 1999; and Worst Quarter was down
-17.44%, 3rd quarter, 1998.
RISKS SUMMARY
--------------------------------------------------------------------------------
In this Summary, we describe the principal and other risks that may affect a
Fund's portfolio as a whole. This Prospectus has additional descriptions of
risks applicable to specific investments in the discussions below under "More
Information About the Funds and Their Investments."
MARKET RISK
This is the risk that the value of a Fund's investments will fluctuate as the
stock or bond markets fluctuate and that prices overall will decline over short-
or long-term periods. It includes the risk that a particular style of investing,
such as growth, may be underperforming the stock market generally.
INDUSTRY/SECTOR RISK
This is the risk of investments in a particular industry or group of related
industries, such as the technology or health care industry. Market or economic
factors affecting that industry could have a major effect on the value of the
Fund's investments.
CAPITALIZATION RISK
This is the risk of investments in small- to mid-capitalization companies.
Investments in small- and mid-cap companies may be more volatile than
investments in large-cap companies. Investments in small-cap companies tend to
be more volatile than investments in mid- or large-cap companies. A Fund's
investments in smaller capitalization companies may have additional risks
because these companies often have limited product lines, markets or financial
resources.
FOREIGN (Non-U.S.) RISK
A Fund's investments in securities of non-U.S. issuers may experience more rapid
and extreme changes in value than investments in securities of U.S. companies.
The securities markets of many countries are relatively small, with a limited
number of companies representing a small number of securities. Non-U.S. issuers
usually are not subject to the same degree of regulation as U.S. issuers.
Reporting, accounting and auditing standards of countries differ, in some cases
significantly, from U.S. standards. Nationalization, expropriation or
confiscatory taxation, currency blockage or political changes or diplomatic
developments could adversely affect a Fund's investments in a country other than
the United States. To the extent a Fund invests in a particular country or
geographic region, the Fund may have more significant risk due to market changes
or other factors affecting that country or region, including political
instability and unpredictable economic conditions.
EMERGING MARKET RISK
Foreign investment risk may be particularly high to the extent a Fund invests in
emerging market securities of issuers based in countries with developing
economies. These securities may present market, credit, currency, liquidity,
legal, political and other risks different from, or greater than, the risks of
investing in developed foreign (non-U.S.) countries.
CURRENCY RISK
This is the risk that fluctuations in the exchange rates between the U.S. Dollar
and foreign (non-U.S.) currencies may negatively affect the value of a Fund's
investments or reduce the returns of a Fund.
FOCUSED PORTFOLIO RISK
This is the risk that investments in a limited number of companies may have more
risk because changes in the value of a single security may have a more
significant effect, either negative or positive, on a Fund's net asset value.
ALLOCATION RISK
This is the risk that the allocation of a Fund's investments among industry
sectors may have a more significant adverse effect on the Fund's net asset value
when one of these sectors is performing more poorly than the other.
MANAGEMENT RISK
Each Fund is subject to management risk because it is an actively managed
investment portfolio. The Adviser will apply its investment techniques and risk
analyses, including its value approach, in making investment decisions for the
Funds, but there is no guarantee that its techniques will produce the intended
result.
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------------------------------------------
Capital- Emerging Focused Manage-
Market Industry/ ization Foreign Market Currency Portfolio Allocation ment
Fund Risk Sector Risk Risk Risk Risk Risk Risk Risk Risk
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Large o o o
Cap Growth Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Growth o o o
Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Mid-Cap o o o o
Growth Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Small o o o
Cap Growth Portfolio
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global o o o o o o o
Technology Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global o o o o o o o o
Health Care Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein Global o o o o o o o
Research Growth Fund
-------------------------------------------------------------------------------------------------------------------------------
AllianceBernstein o o o o o
International Growth Fund
-------------------------------------------------------------------------------------------------------------------------------
FEES AND EXPENSES OF THE FUNDS
--------------------------------------------------------------------------------
------------------------------------------------------------
WHY ARE FUND FEES AND EXPENSES IMPORTANT?
Fees and expenses reduce the investment performance of a
Fund. The information provided below is intended to help you
understand what these fees and expenses are and provide
examples of the dollar amount of these costs to help you
make comparisons with other funds. Some of these fees are
paid directly by you, under certain circumstances, at the
time you redeem or sell your shares back to the Fund. You
pay other fees and expenses indirectly because they are
deducted from a Fund's assets and reduce the value of your
shares. These fees include management fees, distribution
(Rule 12b-1) fees, and operating expenses.
------------------------------------------------------------
SHAREHOLDER FEES (fees paid directly from your investment)
Class A Class R Class K Class I
Shares Shares Shares Shares
------- ------- ------- -------
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) None None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
whichever is lower) None(a) None None None
Exchange Fee None None None None
(a) In some cases a 1%, 1-year contingent deferred sales charge or CDSC may
apply. CDSCs for Class A shares may also be subject to waiver in certain
circumstances. See "Investing in the Funds" in this Prospectus and
"Purchase of Shares" in the Statement of Additional Information or SAI.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets) and
EXAMPLES
The Examples are intended to help you compare the cost of investing in the Funds
with the cost of investing in other funds. They assume that you invest $10,000
in a Fund for the time periods indicated and then redeem all of your shares at
the end of those periods. They also assume that your investment has a 5% return
each year, that the Fund's operating expenses stay the same and that all
dividends and distributions are reinvested. Although your actual costs may be
higher or lower, based on these assumptions your costs as reflected in the
Examples would be:
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Large Cap Growth Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .70% .70% .70% .70%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Growth Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Mid-Cap Growth Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .71% .71% .71% .71%
Distribution and/or
Service (12b-1) Fees .22% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Small Cap Growth Portfolio Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .27% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Technology Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .73% .73% .73% .73%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Health Care Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Please refer to the footnotes on page [___].
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
Global Research Growth Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [______]% [______]% [______]% [______]%
Other Expenses [______]% [______]% [______]% [______]%
----------- ---------- ---------- -----------
Total Other Expenses [______]% [______]% [______]% [______]%
----------- ---------- ---------- -----------
Total Fund Operating
Expenses [______]% [______]% [______]% [______]%
=========== ========== ========== ===========
Waiver and/or Expense
Reimbursement (a) ([______])% ([______])% ([______])% ([______])%
----------- ---------- ---------- -----------
Net Expenses [______]% [______]% [______]% [______]%
=========== ========== ========== ===========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
Operating Expenses
--------------------------------------------------------------------------------
AllianceBernstein
International Growth Fund Class A Class R Class K Class I
------- ------- ------- -------
Management Fees .75% .75% .75% .75%
Distribution and/or
Service (12b-1) Fees .30% .50% .25% None
Other Expenses:
Transfer Agent [_______]% [_______]% [_______]% [_______]%
Other Expenses [_______]% [_______]% [_______]% [_______]%
Total Other Expenses [_______]% [_______]% [_______]% [_______]%
---------- ---------- ---------- ----------
Total Fund Operating
Expenses [_______]% [_______]% [_______]% [_______]%
========== ========== ========== ==========
Examples
--------------------------------------------------------------------------------
Class A Class R Class K Class I
------- ------- ------- -------
After 1 Year $[_____]* $[________] $[________] $[_____]
After 3 Years $[_____] $[________] $[________] $[_____]
After 5 Years $[_____] $[________] $[________] $[_____]
After 10 Years $[_____] $[________] $[________] $[_____]
* Assuming redemption at the end of the period, a 1% CDSC would increase the
expenses by $100.00.
** These examples assume that the Adviser's agreement to waive management fees
and/or bear Fund expenses is not extended beyond its initial period.
(a) Reflects the Adviser's contractual waiver of a portion of its advisory fee
and/or reimbursement of a portion of the Fund's operating expenses. This
waiver extends through the Fund's current fiscal year and may be extended
by the Adviser for additional one-year terms.
INVESTING IN THE FUNDS
--------------------------------------------------------------------------------
This section discusses how to buy, sell or redeem, or exchange different classes
of shares in a Fund that are offered in this Prospectus. The Funds offer four
classes of shares through this Prospectus.
Each share class represents an investment in the same portfolio of securities,
but the classes may have different sales charges and bear different on-going
distribution expenses. For additional information on the differences between the
different classes of shares and factors to consider when choosing among them,
please see "The Different Share Class Expenses" below. Also, you can learn more
about payments to brokers, financial planners, banks, insurance companies,
registered investment advisors or other "financial intermediaries" who
distribute shares of the Funds and your individual financial advisor under
"Payments to Financial Intermediaries."
HOW TO BUY SHARES
Class A, Class R, Class K and Class I shares are available at net asset value,
or NAV, without an initial sales charge, to 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit-sharing and money purchase pension
plans, defined benefit plans, and non-qualified deferred compensation plans
where plan level or omnibus accounts are held on the books of a Fund ("group
retirement plans"), as follows:
Class A shares offered through this Prospectus are designed for group retirement
plans with assets in excess of $10,000,000. Class A shares are also available at
NAV to the AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan assets or 100
employees.
Class R shares are designed for group retirement plans with plan assets up to
$10,000,000.
Class K shares are designed for group retirement plans with at least $1,000,000
in plan assets.
Class I shares are designed for group retirement plans with at least $10,000,000
in plan assets and also are available to certain institutional clients of the
Adviser who invest at least $2 million in a Fund.
Class A, Class R, Class K and Class I shares are also available to certain
AllianceBernstein-sponsored group retirement plans. Class R, Class K and Class I
shares generally are not available to retail non-retirement accounts,
traditional and ROTH IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs,
SIMPLE IRAs and individual 403(b) plans. Effective October 19, 2005, Class I
shares were no longer available to AllianceBernstein-sponsored group retirement
plan programs known as the "Informed Choice" programs.
Required Information
A Fund is required by law to obtain, verify and record certain personal
information from you or persons on your behalf in order to establish an account.
Required information includes name, date of birth, permanent residential address
and taxpayer identification number (for most investors, your social security
number). A Fund may also ask to see other identifying documents. If you do not
provide the information, the Fund will not be able to open your account. If a
Fund is unable to verify your identity, or that of another person(s) authorized
to act on your behalf, or if the Fund believes it has identified potential
criminal activity, the Fund reserves the right to take action it deems
appropriate or as required by law, which may include closing your account. If
you are not a U.S. citizen or Resident Alien, your account must be affiliated
with a NASD member firm.
General
AllianceBernstein Investments, Inc., or ABI, may refuse any order to purchase
shares. Each Fund reserves the right to suspend the sale of its shares to the
public in response to conditions in the securities markets or for other reasons.
THE DIFFERENT SHARE CLASS EXPENSES
This section describes the different expenses of investing in each class and
explains factors to consider when choosing a class of shares. The expenses can
include distribution and/or service fees (12b-1 fees) or CDSCs. Please see below
for a discussion of how CDSCs are calculated.
---------------------------------------------------------------------
WHAT IS A RULE 12b-1 FEE?
A Rule 12b-1 fee is a fee deducted from a Fund's assets that is used
to pay for personal service, maintenance of shareholder accounts and
distribution costs, such as advertising and compensation of financial
intermediaries. The amount of each share class's 12b-1 fee, if any, is
disclosed below and in the relevant Fund's fee table near the front of
this Prospectus.
---------------------------------------------------------------------
Asset-based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees
Each Fund has adopted plans under Commission Rule 12b-1 that allows the Fund to
pay asset-based sales charges or distribution and/or service fees for the
distribution and sale of its shares. The amount of these fees for each class of
the Fund's shares is:
Distribution and/or
Service (Rule 12b-1)
Fee (as a Percentage
of Aggregate Average
Daily Net Assets)
----------------------------------
Class A 0.30%*
Class R 0.50%
Class K 0.25%
Class I None
----------
* The maximum fee allowed under the Rule 12b-1 Plan for the Class A
shares of AllianceBernstein Growth Fund and AllianceBernstein Large
Cap Growth Fund is .50% of the aggregate average daily net assets. The
Directors of AllianceBernstein Growth Fund and AllianceBernstein Large
Cap Growth Fund currently limit the payments to .30%.
Because these fees are paid out of the Fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales fees. Class R shares are subject to higher Rule
12b-1 fees than Class A shares. The higher fees mean a higher expense ratio, so
Class R shares pay correspondingly lower dividends and may have a lower NAV (and
returns) than Class A shares. Conversely, Class K and Class I shares have a
lower or no Rule 12b-1 fee. Therefore, Class K and Class I shares have a lower
expense ratio and may have a higher NAV (and returns) than Class A or Class R
shares. All or some of these fees may be paid to financial intermediaries,
including your financial intermediary.
Class A Shares
Class A shares offered through this Prospectus do not have an initial sales
charge. Class A shares may be subject to a CDSC of up to 1%. When a
non-AllianceBernstein-sponsored group retirement plan terminates a Fund as an
investment option, all investments in Class A shares of that Fund through the
plan are subject to a 1%, 1-year CDSC upon redemption. In addition, when a group
retirement plan ceases to participate in an AllianceBernstein sponsored group
retirement plan program, investments in the Funds' Class A shares through the
plan are subject to a 1%, 1-year CDSC upon redemption. The CDSC is applied to
the lesser of NAV at the time of redemption of shares or the original cost of
shares being redeemed.
Class R, Class K and Class I shares
Class R, Class K and Class I shares do not have an initial sales charge or CDSC.
DISTRIBUTION ARRANGEMENTS FOR GROUP RETIREMENT PLANS
Each Fund offers distribution arrangements for group retirement plans. However,
plan sponsors, plan fiduciaries and other financial intermediaries may establish
requirements for group retirement plans as to the purchase, sale or exchange of
shares of a Fund, including maximum and minimum initial investment requirements,
that are different from those described in this Prospectus and a Fund's SAI.
Therefore, plan sponsors or fiduciaries may not impose the same share class
parameters as set forth in this Prospectus and a Fund's SAI. Group retirement
plans also may not offer all classes of shares of a Fund. A Fund is not
responsible for, and has no control over, the decision of any plan sponsor or
fiduciary to impose such differing requirements.
PAYMENTS TO FINANCIAL INTERMEDIARIES
Financial intermediaries market and sell shares of the Funds. These financial
intermediaries may receive compensation for selling shares of the Funds. This
compensation is paid from various sources, including any CDSC and/or Rule 12b-1
fee that you may pay.
---------------------------------------------------------------------------
What is a Financial Intermediary?
A financial intermediary is a firm that receives compensation for selling
shares of the Funds offered in this Prospectus and/or provides services to
the Funds' shareholders. Financial intermediaries may include, among
others, brokers, financial planners or advisors, banks and insurance
companies. Financial intermediaries may employ financial advisors who deal
with you and other investors on an individual basis.
---------------------------------------------------------------------------
In the case of Class A shares, the Funds' principal underwriter, ABI, may pay
financial intermediaries a fee of up to 1%. Additionally, up to 100% of the Rule
12b-1 fees applicable to Class A shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class A shares.
In the case of Class R shares, up to 100% of the Rule 12b-1 fee applicable to
Class R shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class R shares.
In the case of Class K shares, up to 100% of the Rule 12b-1 fee applicable to
Class K shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class K shares.
---------------------------------------------------------------------------
Your financial advisor's firm receives compensation from the Funds, ABI
and/or the Adviser in several ways from various sources, which include some
or all of the following:
- 12b-1 fees
- additional distribution support
- defrayal of costs for educational seminars and training
- payments related to providing shareholder recordkeeping and/or
transfer agency services
Please read this Prospectus carefully for information on this compensation.
---------------------------------------------------------------------------
Other Payments for Distribution Services and Educational Support
In addition to the Rule 12b-1 fees described above, some or all of which may be
paid to financial intermediaries, ABI, at its expense, currently provides
additional payments to firms that sell shares of the AllianceBernstein Mutual
Funds. Although the individual components may be higher and the total amount of
payments made to each qualifying firm in any given year may vary, the total
amount paid to a financial intermediary in connection with the sale of shares of
the AllianceBernstein Mutual Funds will generally not exceed the sum of (a)
0.25% of the current year's fund sales by that firm and (b) 0.10% of average
daily net assets attributable to that firm over the year. These sums include
payments to reimburse directly or indirectly the costs incurred by these firms
in connection with educational seminars and training efforts about the
AllianceBernstein Mutual Funds. The costs and expenses associated with these
efforts may include travel, lodging, entertainment and meals. ABI may pay a
portion of "ticket" or other transactional charges.
For 2006, ABI's additional payments to these firms for distribution services and
educational support related to the AllianceBernstein Mutual Funds is expected to
be approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds, or approximately $18,000,000. In 2005, ABI paid approximately
0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or
approximately $18,000,000 for distribution services and educational support
related to the AllianceBernstein Mutual Funds.
A number of factors are considered in determining the additional payments,
including each firm's AllianceBernstein Mutual Fund sales, assets and redemption
rates, and the willingness and ability of the firm to allow ABI to provide
information for educational and marketing purposes. ABI's goal is to make the
financial intermediaries who interact with current and prospective investors and
shareholders more knowledgeable about the AllianceBernstein Mutual Funds so that
they can provide suitable information and advice about the Funds.
The Funds and ABI also make payments for recordkeeping and other transfer agency
services to financial intermediaries that sell AllianceBernstein Mutual Fund
shares. Please see "Management of the Funds--Transfer Agency and Retirement Plan
Services" below. These expenses paid by the Funds are included in "Other
Expenses" under "Fees and Expenses of the Funds--Annual Fund Operating Expenses"
above.
----------------------------------------------------------------------
If one mutual fund sponsor makes greater distribution assistance
payments than another, your financial intermediary may have an
incentive to recommend one fund complex over another. Similarly, if
your financial advisor or his or her firm receives more distribution
assistance for one share class versus another, the financial
intermediary may have an incentive to recommend that class.
----------------------------------------------------------------------
As of the date of the Prospectus, ABI anticipates that the firms that will
receive additional payments for distribution services and/or educational support
include:
A.G. Edwards
AIG Advisor Group
Ameriprise Financial Services
AXA Advisors
Banc of America
Bank One Securities Corp.
BNY Investment Center
Charles Schwab
Chase Investment Services
Citicorp Investment Services
Citigroup Global Markets
Commonwealth Financial Network
Donegal Securities
Independent Financial Marketing Group
ING Advisors Network
Lincoln Financial Advisors
Linsco/Private Ledger
McDonald Investments
Merrill Lynch
Met Life Securities
Morgan Stanley
Mutual Service Corporation
National Financial
PFS Investments
Piper Jaffray
Raymond James
RBC Dain Rauscher
Robert W. Baird
Securities America
Signator Investments
UBS AG
UBS Financial Services
Uvest Financial Services
Wachovia Securities
Wells Fargo Investments
Although the Funds may use brokers and dealers who sell shares of the Funds to
effect portfolio transactions, the Funds do not consider the sale of
AllianceBernstein Mutual Fund shares as a factor when selecting brokers or
dealers to effect portfolio transactions.
HOW TO EXCHANGE SHARES
You may exchange your Fund shares for shares of the same class of other
AllianceBernstein Mutual Funds (including AllianceBernstein Exchange Reserves, a
money market fund managed by the Adviser). Exchanges of shares are made at the
next-determined NAV, without sales or service charges. You may request an
exchange through your financial intermediary. In order to receive a day's NAV,
your financial intermediary must receive and confirm your telephone exchange
request by 4:00 p.m., Eastern time, on that day. The Funds may modify, restrict
or terminate the exchange privilege on 60 days' written notice.
HOW TO SELL OR REDEEM SHARES
You may "redeem" your shares (i.e., sell your shares to a Fund) on any day the
New York Stock Exchange is open. Your sale price will be the next-determined
NAV, less any applicable CDSC, after the Fund receives your redemption request
in proper form. Normally, redemption proceeds are sent to you within 7 days. If
you recently purchased your shares by check or electronic funds transfer, your
redemption payment may be delayed until the Fund is reasonably satisfied that
the check or electronic funds transfer has been collected (which may take up to
15 days).
Your financial intermediary must receive your sales request by 4:00 p.m.,
Eastern time, and submit it to the Fund by a pre-arranged time for you to
receive the next-determined NAV, less any applicable CDSC. Your financial
intermediary is responsible for submitting all necessary documentation to the
Fund and may charge you a fee for this service.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
Each Fund's Board of Directors has adopted policies and procedures designed to
detect and deter frequent purchases and redemptions of Fund shares or excessive
or short-term trading that may disadvantage long-term Fund shareholders. These
policies are described below. Each Fund reserves the right to restrict, reject
or cancel, without any prior notice, any purchase or exchange order for any
reason, including any purchase or exchange order accepted by any shareholder's
financial intermediary.
Risks Associated With Excessive Or Short-term Trading Generally. While the Funds
will try to prevent market timing by utilizing the procedures described below,
these procedures may not be successful in identifying or stopping excessive or
short-term trading in all circumstances. By realizing profits through short-term
trading, shareholders that engage in rapid purchases and sales or exchanges of a
Fund's shares dilute the value of shares held by long-term shareholders.
Volatility resulting from excessive purchases and sales or exchanges of Fund
shares, especially involving large dollar amounts, may disrupt efficient
portfolio management. In particular, a Fund may have difficulty implementing its
long-term investment strategies if it is forced to maintain a higher level of
its assets in cash to accommodate significant short-term trading activity.
Excessive purchases and sales or exchanges of a Fund's shares may force the Fund
to sell portfolio securities at inopportune times to raise cash to accommodate
short-term trading activity. In addition, a Fund may incur increased expenses if
one or more shareholders engage in excessive or short-term trading. For example,
a Fund may be forced to liquidate investments as a result of short-term trading
and incur increased brokerage costs and realization of taxable capital gains
without attaining any investment advantage. Similarly, a Fund may bear increased
administrative costs due to asset level and investment volatility that
accompanies patterns of short-term trading activity. All of these factors may
adversely affect Fund performance.
Funds that may invest significantly in foreign securities may be particularly
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a shareholder engaging in a short-term trading strategy
to exploit differences in Fund share prices that are based on closing prices of
foreign securities established some time before the Fund calculates its own
share price (referred to as "time zone arbitrage"). The Funds have procedures,
referred to as fair value pricing, designed to adjust closing market prices of
foreign securities to reflect what is believed to be the fair value of those
securities at the time a Fund calculates its NAV. While there is no assurance,
the Funds expect that the use of fair value pricing, in addition to the
short-term trading policies discussed below, will significantly reduce a
shareholder's ability to engage in time zone arbitrage to the detriment of other
Fund shareholders.
A shareholder engaging in a short-term trading strategy may also target a Fund
that does not invest primarily in foreign securities. Any Fund that invests in
securities that are, among other things, thinly traded, traded infrequently or
relatively illiquid has the risk that the current market price for the
securities may not accurately reflect current market values. A shareholder may
seek to engage in short-term trading to take advantage of these pricing
differences (referred to as "price arbitrage"). Funds that may be adversely
affected by price arbitrage include, in particular, those Funds that
significantly invest in small cap securities, technology and other specific
industry sector securities.
Policy Regarding Short-term Trading. Purchases and exchanges of shares of the
Funds should be made for investment purposes only. The Funds seek to prevent
patterns of excessive purchases and sales or exchanges of Fund shares. The Funds
will seek to prevent such practices to the extent they are detected by the
procedures described below. The Funds reserve the right to modify this policy,
including any surveillance or account blocking procedures established from time
to time to effectuate this policy, at any time without notice.
o Transaction Surveillance Procedures. The Funds, through their agents,
ABI and AllianceBernstein Investor Services, Inc., or ABIS, maintain
surveillance procedures to detect excessive or short-term trading in
Fund shares. This surveillance process involves several factors, which
include scrutinizing transactions in Fund shares that exceed certain
monetary thresholds or numerical limits within a specified period of
time. Generally, more than two exchanges of Fund shares during any
90-day period or purchases of shares followed by a sale within 90 days
will be identified by these surveillance procedures. For purposes of
these transaction surveillance procedures, the Funds may consider
trading activity in multiple accounts under common ownership, control
or influence. Trading activity identified by either, or a combination,
of these factors, or as a result of any other information available at
the time, will be evaluated to determine whether such activity might
constitute excessive or short-term trading. These surveillance
procedures may be modified from time to time, as necessary or
appropriate to improve the detection of excessive or short-term
trading or to address specific circumstances, such as for certain
retirement plans, to conform to plan exchange limits or U.S.
Department of Labor regulations, or for certain automated or
pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.
o Account Blocking Procedures. If the Funds determine, in their sole
discretion, that a particular transaction or pattern of transactions
identified by the transaction surveillance procedures described above
is excessive or short-term trading in nature, the relevant Fund
account(s) will be immediately "blocked" and no future purchase or
exchange activity will be permitted. However, sales of Fund shares
back to a Fund or redemptions will continue to be permitted in
accordance with the terms of the Fund's current Prospectus. In the
event an account is blocked, certain account-related privileges, such
as the ability to place purchase, sale and exchange orders over the
internet or by phone, may also be suspended. A blocked account will
generally remain blocked unless and until the account holder or the
associated broker, dealer or other financial intermediary provides
evidence or assurance acceptable to the Fund that the account holder
did not or will not in the future engage in excessive or short-term
trading.
o Applications of Surveillance Procedures and Restrictions to Omnibus
Accounts. Omnibus account arrangements are common forms of holding
shares of the Funds, particularly among certain brokers, dealers and
other financial intermediaries, including sponsors of retirement plans
and variable insurance products. The Funds seek to apply their
surveillance procedures to these omnibus account arrangements. If an
intermediary does not have the capabilities, or declines, to provide
individual account level detail to the Funds, the Funds will monitor
turnover of assets to purchases and redemptions of the omnibus
account. If excessive turnover, defined as annualized purchases and
redemptions exceeding 50% of assets is detected, the Fund will notify
the intermediary and request that the intermediary review individual
account transactions for excessive or short-term trading activity and
confirm to the Fund that appropriate action has been taken to curtail
the activity, which may include applying blocks to accounts to
prohibit future purchases and exchanges of Fund shares. For certain
retirement plan accounts, the Funds may request that the retirement
plan or other intermediary revoke the relevant participant's privilege
to effect transactions in Fund shares via the internet or telephone,
in which case the relevant participant must submit future transaction
orders via the U.S. Postal Service (i.e., regular mail). The Fund will
continue to monitor the turnover attributable to an intermediary's
omnibus account arrangement and may consider whether to terminate the
relationship if the intermediary does not demonstrate that appropriate
action has been taken.
Risks to Shareholders Resulting From Imposition of Account Blocks in Response to
Excessive Short-term Trading Activity. A shareholder identified as having
engaged in excessive or short-term trading activity whose account is "blocked"
and who may not otherwise wish to redeem his or her shares effectively may be
"locked" into an investment in a Fund that the shareholder did not intend to
hold on a long-term basis or that may not be appropriate for the shareholder's
risk profile. To rectify this situation, a shareholder with a "blocked" account
may be forced to redeem Fund shares, which could be costly if, for example,
these shares have declined in value, the shareholder recently paid a front-end
sales charge or the shares are subject to a CDSC, or the sale results in adverse
tax consequences to the shareholder. To avoid this risk, a shareholder should
carefully monitor the purchases, sales and exchanges of Fund shares and avoid
frequent trading in Fund shares.
Limitations on Ability to Detect and Curtail Excessive Trading Practices.
Shareholders seeking to engage in excessive short-term trading activities may
deploy a variety of strategies to avoid detection and, despite the efforts of
the Funds and their agents to detect excessive or short duration trading in Fund
shares, there is no guarantee that the Funds will be able to identify these
shareholders or curtail their trading practices. In particular, the Funds may
not be able to detect excessive or short-term trading in Fund shares
attributable to a particular investor who effects purchase and/or exchange
activity in Fund shares through omnibus accounts. Also, multiple tiers of these
entities may exist, each utilizing an omnibus account arrangement, which may
further compound the difficulty of detecting excessive or short duration trading
activity in Fund shares.
HOW THE FUNDS VALUE THEIR SHARES
Each Fund's NAV is calculated at the close of regular trading on the Exchange
(ordinarily, 4:00 p.m., Eastern time), only on days when the Exchange is open
for business. To calculate NAV, a Fund's assets are valued and totaled,
liabilities are subtracted, and the balance, called net assets, is divided by
the number of shares outstanding. If a Fund invests in securities that are
primarily traded on foreign exchanges that trade on weekends or other days when
the Fund does not price its shares, the NAV of the Fund's shares may change on
days when shareholders will not be able to purchase or redeem their shares in
the Fund.
The Funds value their securities at their current market value determined on the
basis of market quotations or, if market quotations are not readily available or
are unreliable, at "fair value" as determined in accordance with procedures
established by and under the general supervision of each Fund's Board of
Directors. When a Fund uses fair value pricing, it may take into account any
factors it deems appropriate. A Fund may determine fair value based upon
developments related to a specific security, current valuations of foreign stock
indices (as reflected in U.S. futures markets) and/or U.S. sector or broader
stock market indices. The prices of securities used by the Fund to calculate its
NAV may differ from quoted or published prices for the same securities. Fair
value pricing involves subjective judgments and it is possible that the fair
value determined for a security is materially different than the value that
could be realized upon the sale of that security.
Funds expect to use fair value pricing for securities primarily traded on U.S.
exchanges only under very limited circumstances, such as the early closing of
the exchange on which a security is traded or suspension of trading in the
security. Funds may use fair value pricing more frequently for securities
primarily traded in non-U.S. markets because, among other things, most foreign
markets close well before 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. For example, the Funds believe that foreign security values may be
affected by events that occur after the close of foreign securities markets. To
account for this, the Funds may frequently value many of their foreign equity
securities using fair value prices based on third party vendor modeling tools to
the extent available.
Subject to the Board's oversight, each Fund's Board has delegated responsibility
for valuing a Fund's assets to the Adviser. The Adviser has established a
Valuation Committee, which operates under the policies and procedures approved
by the Board, to value the Fund's assets on behalf of the Fund. The Valuation
Committee values Fund assets as described above.
Your order for purchase, sale or exchange of shares is priced at the
next-determined NAV after your order is received in proper form by the Fund.
MORE INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS
--------------------------------------------------------------------------------
This section of the Prospectus provided additional information about the Funds'
investment practices and risks. Most of these investment practices are
discretionary, which means that the Adviser may or may not decide to use them.
This Prospectus does not describe all of a Fund's investment practices and
additional descriptions of each Fund's strategies, investments, and risks can be
found in the Fund's SAI.
Derivatives Each Fund may, but is not required to, use derivatives for risk
management purposes or as part of its investment strategies.
Derivatives are financial contracts whose value depends on, or is
derived from, the value of an underlying asset, reference rate or
index. A Fund may use derivatives to earn income and enhance
returns, to hedge or adjust the risk profile of a portfolio, to
replace more traditional direct investments and to obtain
exposure to otherwise inaccessible markets.
There are four principal types of derivatives, including options,
futures, forwards and swaps, which are described below.
Derivatives may be (i) standardized, exchange-traded contracts or
(ii) customized, privately-negotiated contracts. Exchange-traded
derivatives tend to be more liquid and subject to less credit
risk than those that are privately negotiated.
A Fund's use of derivatives may involve risks that are different
from, or possibly greater than, the risks associated with
investing directly in securities or other more traditional
instruments. These risks include the risk that the value of a
derivative instrument may not correlate perfectly, or at all,
with the value of the assets, reference rates, or indexes that
they are designed to track. Other risks include: the possible
absence of a liquid secondary market for a particular instrument
and possible exchange-imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position
when desired; the risk that adverse price movements in an
instrument can result in a loss substantially greater than the
Fund's initial investment in that instrument (in some cases, the
potential loss is unlimited); and the risk that the counterparty
will not perform its obligations.
The Funds may use the following types of derivatives.
o Forward Contracts. A forward contract is a customized,
privately negotiated agreement for one party to buy, and the
other party to sell, a specific quantity of an underlying
commodity or other tangible asset for an agreed upon price
at a future date. A forward contract is either settled by
physical delivery of the commodity or tangible asset to an
agreed-upon location at a future date, rolled forward into a
new forward contract or, in the case of a non-deliverable
forward, by a cash payment at maturity. The Funds'
investments in forward contracts include the following.
--Forward Currency Exchange Contracts. A Fund may purchase
or sell currency exchange contracts to minimize the risk
from adverse changes in the relationship between the U.S.
Dollar and other currencies. A Fund may enter into a forward
contract as transaction hedge (to "lock in" the U.S. dollar
price of a non-U.S. dollar security), as position hedge (to
protect the value of securities the Fund owns that are
denominated in a foreign currency against substantial
changes in the value of the foreign currency) or as
cross-hedge (to protect the value of securities the Fund
owns that are denominated in a foreign currency against
substantial changes in the value of that foreign currency by
entering into a forward contract for a different foreign
currency that is expected to change in the same direction as
the currency in which the securities are denominated).
o Futures Contracts and Options on Futures Contracts. A
futures contract is an agreement that obligates the buyer to
buy and the seller to sell a specified quantity of an
underlying asset (or settle for cash the value of a contract
based on an underlying asset, rate or index) at a specific
price on the contract maturity date. Options on futures
contracts are options that call for the delivery of futures
contracts upon exercise.
o Options. An option is an agreement that, for a premium
payment or fee, gives the option holder (the buyer) the
right but not the obligation to buy or sell the underlying
asset (or settle for cash an amount based on an underlying
asset, rate or index) at a specified price (the exercise
price) during a period of time or on a specified date.
Investments in options are considered speculative. A Fund
may lose the premium paid for them if the price of the
underlying security or other asset decreased or remained the
same (in the case of a call option) or increased or remained
the same (in the case of a put option). If a put or call
option purchased by a Fund were permitted to expire without
being sold or exercised, its premium would represent a loss
to the Fund. The Funds' investments include the following:
--Options on Foreign Currencies. A Fund invests in options
on foreign currencies that are privately negotiated or
traded on U.S. or foreign exchanges for the purpose of
protecting against declines in the U.S. Dollar value of
foreign currency denominated securities held by a Fund and
against increases in the U.S. Dollar cost of securities to
be acquired. The purchase of an option on a foreign currency
may constitute an effective hedge against fluctuations in
exchange rates, although if rates move adversely, a Fund may
forfeit the entire amount of the premium plus related
transaction costs.
--Options on Securities. A Fund may purchase or write a put
or call option on securities. The Fund will only exercise an
option it purchased if the price of the security was less
(in the case of a put option) or more (in the case of a call
option) than the exercise price. If the Fund does not
exercise an option, the premium it paid for the option will
be lost. Normally, a Fund will write only "covered" options,
which means writing an option for securities the Fund owns,
but may write an uncovered call option for cross-hedging
purposes.
--Options on Securities Indices. An option on a securities
index is similar to an option on a security except that,
rather than taking or making delivery of a security at a
specified price, an option on a securities index gives the
holder the right to receive, upon exercise of the option, an
amount of cash if the closing level of the chosen index is
greater than (in the case of a call) or less than (in the
case of a put) the exercise price of the option.
o Swap Transactions. A swap is a customized, privately
negotiated agreement that obligates two parties to exchange
a series of cash flows at specified intervals (payment
dates) based upon or calculated by reference to changes in
specified prices or rates (interest rates in the case of
interest rate swaps, currency exchange rates in the case of
currency swaps) for a specified amount of an underlying
asset (the "notional" principal amount). The Funds'
investments in swap transactions include the following:
--Credit Default Swap Agreements. The "buyer" in a credit
default swap contract is obligated to pay the "seller" a
periodic stream of payments over the term of the contract in
return for a contingent payment upon the occurrence of a
credit event with respect to an underlying reference
obligation. Generally, a credit event means bankruptcy,
failure to pay, obligation acceleration or modified
restructuring. A Fund may be either the buyer or seller in
the transaction. If a Fund is a seller, the Fund receives a
fixed rate of income throughout the term of the contract,
which typically is between one month and five years,
provided that no credit event occurs. If a credit event
occurs, a Fund typically must pay the contingent payment to
the buyer, which is typically the "par value" (full notional
value) of the reference obligation. If a Fund is a buyer and
no credit event occurs, the Fund will lose its periodic
stream of payments over the term of the contract. However,
if a credit event occurs, the buyer typically receives full
notional value for a reference obligation that may have
little or no value. The value of the reference obligation
received by a Fund coupled with the periodic payments
previously received may be less than the full notional value
it pays to the buyer, resulting in a loss of value to the
Fund.
Credit default swaps may involve greater risks than if a
Fund had invested in the reference obligation directly.
Credit default swaps are subject to general market risk,
liquidity risk and credit risk.
--Currency Swaps. Currency swaps involve the individually
negotiated exchange by a Fund with another party of a series
of payments in specified currencies. A currency swap may
involve the delivery at the end of the exchange period of a
substantial amount of one designated currency in exchange
for the other designated currency. Therefore, the entire
principal value of a currency swap is subject to the risk
that the swap counterparty will default on its contractual
delivery obligations. If there is a default by the
counterparty to the transaction, the Fund will have
contractual remedies under the transaction agreements.
--Interest Rate Swaps, Caps, and Floors. Interest rate swaps
involve the exchange by a Fund with another party of their
respective commitments to pay or receive interest (e.g., an
exchange of floating rate payments for fixed rate payments).
Interest rate swaps are entered into on a net basis (i.e.,
the two payment streams are netted out, with the Fund
receiving or paying, as the case may be, only the net amount
of the two payments).
The purchase of an interest rate cap entitles the purchaser,
to the extent that a specified index exceeds a predetermined
interest rate, to receive payments of interest on a
contractually-based principal amount from the party selling
the interest rate cap. The purchase of an interest rate
floor entitles the purchaser, to the extent that a specified
index falls below a predetermined interest rate, to receive
payments of interest on an agreed principal amount from the
party selling the interest rate floor. Caps and floors may
be less liquid than swaps.
Interest rate swap, cap, and floor transactions may be used
to preserve a return or spread on a particular investment or
a portion of a Fund's portfolio or protecting against an
increase in the price of securities a Fund anticipates
purchasing at a later date. A Fund may enter into interest
rate swaps, caps, and floors on either an asset-based or
liability-based basis, depending upon whether it is hedging
its assets or liabilities. These transactions do not involve
the delivery of securities or other underlying assets or
principal.
Unless there is a counterparty default, the risk of loss to
a Fund from interest rate transactions is limited to the net
amount of interest payments that the Fund is contractually
obligated to make. If the counterparty to an interest rate
transaction defaults, the Fund's risk of loss consists of
the net amount of interest payments that the Fund
contractually is entitled to receive.
o Other Derivative Investments
--Synthetic Foreign Equity Securities. The Funds may invest
in a form of synthetic foreign equity securities, which may
be referred to as international warrants, local access
products, participation notes, or low exercise price
warrants. International warrants are financial instruments
issued by banks or other financial institutions, which may
or may not be traded on a foreign exchange. International
warrants are a form of derivative security that may give
holders the right to buy or sell an underlying security or a
basket of securities representing an index from or to the
issuer for a particular price or may entitle holders to
receive a cash payment relating to the value of the
underlying security or index. International warrants are
similar to options in that they are exercisable by the
holder for an underlying security or the value of that
security, but are generally exercisable over a longer term
than typical options. These types of instruments may be
American style exercise, which means that they can be
exercised at any time on or before the expiration date of
the international warrant, or European style exercise, which
means that they may be exercised only on the expiration
date. International warrants have an exercise price, which
is fixed when the warrants are issued.
The Funds will normally invest in covered warrants, which
entitle the holder to purchase from the issuer common stock
of an international company or receive a cash payment
(generally in U.S. dollars). The cash payment is calculated
according to a predetermined formula. The Funds may invest
in low exercise price warrants, which are warrants with an
exercise price that is very low relative to the market price
of the underlying instrument at the time of issue (e.g., one
cent or less). The buyer of a low exercise price warrant
effectively pays the full value of the underlying common
stock at the outset. In the case of any exercise of
warrants, there may be a time delay between the time a
holder of warrants gives instructions to exercise and the
time the price of the common stock relating to exercise or
the settlement date is determined, during which time the
price of the underlying security could change significantly.
In addition, the exercise or settlement date of the warrants
may be affected by certain market disruption events, such as
difficulties relating to the exchange of a local currency
into U.S. dollars, the imposition of capital controls by a
local jurisdiction or changes in the laws relating to
foreign investments. These events could lead to a change in
the exercise date or settlement currency of the warrants, or
postponement of the settlement date. In some cases, if the
market disruption events continue for a certain period of
time, the warrants may become worthless resulting in a total
loss of the purchase price of the warrants.
The Funds will acquire covered warrants issued by entities
deemed to be creditworthy by the Adviser, who will monitor
the credit-worthiness of the issuers on an on-going basis.
Investments in these instruments involve the risk that the
issuer of the instrument may default on its obligation to
deliver the underlying security or cash in lieu thereof.
These instruments may also be subject to liquidity risk
because there may be a limited secondary market for trading
the warrants. They are also subject, like other investments
in foreign securities, to foreign risk and currency risk.
Convertible Prior to conversion, convertible securities have the same general
Securities characteristics as non-convertible debt securities, which
generally provide a stable stream of income with generally higher
yields than those of equity securities of the same or similar
issuers. The price of a convertible security will normally vary
with changes in the price of the underlying equity security,
although the higher yield tends to make the convertible security
less volatile than the underlying equity security. As with debt
securities, the market value of convertible securities tends to
decrease as interest rates rise and increase as interest rates
decline. While convertible securities generally offer lower
interest or dividend yields than non-convertible debt securities
of similar quality, they offer investors the potential to benefit
from increases in the market prices of the underlying common
stock. Convertible debt securities that are rated Baa3 or lower
by Moody's or BBB- or lower by S&P or Fitch and comparable
unrated securities may share some or all of the risks of debt
securities with those ratings.
Depositary Each Fund may invest in depositary receipts. Depositary receipts
Receipts and may not necessarily be denominated in the same currency as the
Securities of underlying securities into which they may be converted. In
Supranational addition, the issuers of the stock of unsponsored depositary
Entities receipts are not obligated to disclose material information in
the United States and, therefore, there may not be a correlation
between such information and the market value of the depositary
receipts. ADRs are depositary receipts typically issued by an
U.S. bank or trust company that evidence ownership of underlying
securities issued by a foreign corporation. GDRs, EDRs and other
types of depositary receipts are typically issued by non-U.S.
banks or trust companies and evidence ownership of underlying
securities issued by either a U.S. or a non-U.S. company.
Generally, depositary receipts in registered form are designed
for use in the U.S. securities markets, and depositary receipts
in bearer form are designed for use in securities markets outside
of the United States. For purposes of determining the country of
issuance, investments in depositary receipts of either type are
deemed to be investments in the underlying securities.
A supranational entity is an entity designated or supported by
the national government of one or more countries to promote
economic reconstruction or development. Examples of supranational
entities include the World Bank (International Bank for
Reconstruction and Development) and the European Investment Bank.
A European Currency Unit is a basket of specified amounts of the
currencies of the member states of the European Economic
Community. "Semi-governmental securities" are securities issued
by entities owned by either a national, state or equivalent
government or are obligations of one of such government
jurisdictions that are not backed by its full faith and credit
and general taxing powers.
Forward Forward commitments for the purchase or sale of securities may
Commitments include purchases on a when-issued basis or purchases or sales on
a delayed delivery basis. In some cases, a forward commitment may
be conditioned upon the occurrence of a subsequent event, such as
approval and consummation of a merger, corporate reorganization
or debt restructuring or approval of a proposed financing by
appropriate authorities (i.e., a "when, as and if issued" trade).
When forward commitments with respect to fixed-income securities
are negotiated, the price, which is generally expressed in yield
terms, is fixed at the time the commitment is made, but payment
for and delivery of the securities take place at a later date.
Securities purchased or sold under a forward commitment are
subject to market fluctuation and no interest or dividends
accrues to the purchaser prior to the settlement date. The use of
forward commitments helps a Fund to protect against anticipated
changes in interest rates and prices.
Illiquid Under current SEC Guidelines, the Funds limit their investments
Securities in illiquid securities to 15% of their net assets. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount a Fund has valued the
securities. A Fund that invests in illiquid securities may not be
able to sell such securities and may not be able to realize their
full value upon sale. Restricted securities (securities subject
to legal or contractual restrictions on resale) may be illiquid.
Some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 or certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment Subject to the restrictions and limitations of the 1940 Act, each
in Other Fund may invest in other investment companies whose investment
Investment objectives and policies Companies are substantially similar to
Companies those of the Fund. If a Fund acquires shares in investment
companies, shareholders would bear indirectly, the expenses of
such investment companies (including management and advisory
fees), which are in addition to the Fund's expenses. A Fund may
also invest in exchange traded funds, subject to the restrictions
and limitations of the 1940 Act.
Loans of For the purposes of achieving income, each Fund may make secured
Portfolio loans of portfolio securities to brokers, dealers and financial
Securities institutions, provided a number of conditions are satisfied,
including that the loan is fully collateralized. Securities
lending involves the possible loss of rights in the collateral or
delay in the recovery of collateral if the borrower fails to
return the securities loaned or becomes insolvent. When a fund
lends securities, its investment performance will continue to
reflect changes in the value of the securities loaned, and the
Fund will also receive a fee or interest on the collateral. The
Fund may pay reasonable finders', administrative, and custodial
fees in connection with a loan.
Repurchase Each Fund may enter into repurchase agreements in which a Fund
Agreements purchases a security from a bank or broker-dealer, which agrees
to repurchase the security from the Fund at an agreed-upon future
date, normally a day or a few days later. The resale price is
greater than the purchase price, reflecting an agreed-upon
interest rate for the period the buyer's money is invested in the
security. Such agreements permit a Fund to keep all of its assets
at work while retaining "overnight" flexibility in pursuit of
investments of a longer-term nature. If the bank or broker-dealer
defaults on its repurchase obligation, a Fund would suffer a loss
to the extent that the proceeds from the sale of the security
were less than the repurchase price.
Rights and Rights and warrants are option securities permitting their
Warrants holders to subscribe for other securities. Rights are similar to
warrants except that they have a substantially shorter duration.
Rights and warrants do not carry with them dividend or voting
rights with respect to the underlying securities, or any rights
in the assets of the issuer. As a result, an investment in rights
and warrants may be considered more speculative than certain
other types of investments. In addition, the value of a right or
a warrant does not necessarily change with the value of the
underlying securities, and a right or a warrant ceases to have
value if it is not exercised prior to its expiration date.
Short Sales A Fund may make short sales a part of overall portfolio
management or to offset a potential decline in the value of a
security. A short sale involves the sale of a security that a
Fund does not own, or if the Fund owns the security, is not to be
delivered upon consummation of the sale. When the Fund makes a
short sale of a security that it does not own, it must borrow
from a broker-dealer the security sold short and deliver the
security to the broker-dealer upon conclusion of the short sale.
If the price of the security sold short increases between the
time of the short sale and the time a Fund replaces the borrowed
security, the Fund will incur a loss; conversely, if the price
declines, the Fund will realize a short-term capital gain.
Although a Fund's gain is limited to the price at which it sold
the security short, its potential loss is theoretically
unlimited.
Standby Standby commitment agreements are similar to put options that
Commitment commit a Fund, for a stated period of time, to purchase a stated
Agreements amount of a security that may be issued and sold to the Fund at
the option of the issuer. The price and coupon of the security
are fixed at the time of the commitment. At the time of entering
into the agreement, the Fund is paid a commitment fee, regardless
of whether the security ultimately is issued. The Funds will
enter into such agreements only for the purpose of investing in
the security underlying the commitment at a yield and price
considered advantageous to the Fund and unavailable on a firm
commitment basis.
There is no guarantee that a security subject to a standby
commitment will be issued. In addition, the value of the
security, if issued, on the delivery date may be more or less
than its purchase price. Since the issuance of the security is at
the option of the issuer, a Fund will bear the risk of capital
loss in the event the value of the security declines and may not
benefit from an appreciation in the value of the security during
the commitment period if the issuer decides not to issue and sell
the security to the Fund.
Zero-Coupon Zero-coupon bonds are issued at a significant discount from their
and Payment- principal amount in lieu of paying interest periodically.
in-Kind Payment-in-kind bonds allow the issuer to make current interest
Bonds payments on the bonds in additional bonds. Because zero-coupon
bonds and payment-in-kind bonds do not pay current interest in
cash, their value is generally subject to greater fluctuation in
response to changes in market interest rates than bonds that pay
interest in cash currently. Both zero-coupon and payment-in-kind
bonds allow an issuer to avoid the need to generate cash to meet
current interest payments. These bonds may involve greater credit
risks than bonds paying interest currently. Although these bonds
do not pay current interest in cash, a Fund is nonetheless
required to accrue interest income on such investments and to
distribute such amounts at least annually to shareholders. Thus,
a Fund could be required at times to liquidate other investments
in order to satisfy its dividend requirements.
Foreign Investing in foreign securities involves special risks and
(Non-U.S.) considerations not typically associated with investing in U.S.
Securities securities. The securities markets of many foreign countries are
relatively small, with the majority of market capitalization and
trading volume concentrated in a limited number of companies
representing a small number of industries. A Fund that invests in
foreign securities may experience greater price volatility and
significantly lower liquidity than a portfolio invested solely in
securities of U.S. companies. These markets may be subject to
greater influence by adverse events generally affecting the
market, and by large investors trading significant blocks of
securities, than is usual in the United States.
Securities registration, custody, and settlements may in some
instances be subject to delays and legal and administrative
uncertainties. Foreign investment in the securities markets of
certain foreign countries is restricted or controlled to varying
degrees. These restrictions or controls may at times limit or
preclude investment in certain securities and may increase the
cost and expenses of a Fund. In addition, the repatriation of
investment income, capital or the proceeds of sales of securities
from certain of the countries is controlled under regulations,
including in some cases the need for certain advance government
notification or authority, and if a deterioration occurs in a
country's balance of payments, the country could impose temporary
restrictions on foreign capital remittances.
A Fund also could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for
repatriation, as well as by the application to it of other
restrictions on investment. Investing in local markets may
require a Fund to adopt special procedures or seek local
governmental approvals or other actions, any of which may involve
additional costs to a Fund. These factors may affect the
liquidity of a Fund's investments in any country and the Adviser
will monitor the effect of any such factor or factors on a Fund's
investments. Transaction costs including brokerage commissions
for transactions both on and off the securities exchanges in many
foreign countries are generally higher than in the U.S.
Issuers of securities in foreign jurisdictions are generally not
subject to the same degree of regulation as are U.S. issuers with
respect to such matters as insider trading rules, restrictions on
market manipulation, shareholder proxy requirements, and timely
disclosure of information. The reporting, accounting, and
auditing standards of foreign countries may differ, in some cases
significantly, from U.S. standards in important respects, and
less information may be available to investors in foreign
securities than to investors in U.S. securities. Substantially
less information is publicly available about certain non-U.S.
issuers than is available about most U.S. issuers.
The economies of individual foreign countries may differ
favorably or unfavorably from the U.S. economy in such respects
as growth of gross domestic product or gross national product,
rate of inflation, capital reinvestment, resource
self-sufficiency, and balance of payments position.
Nationalization, expropriation or confiscatory taxation, currency
blockage, political changes, government regulation, political or
social instability, revolutions, wars or diplomatic developments
could affect adversely the economy of a foreign country. In the
event of nationalization, expropriation, or other confiscation, a
Fund could lose its entire investment in securities in the
country involved. In addition, laws in foreign countries
governing business organizations, bankruptcy and insolvency may
provide less protection to security holders such as the Fund than
that provided by U.S. laws.
Investments in securities of companies in emerging markets
involve special risks. There are approximately 100 countries
identified by the World Bank as Low Income, Lower Middle Income
and Upper Middle Income countries that are generally regarded as
Emerging Markets. Emerging market countries that the Adviser
currently considers for investment are listed below. Countries
may be added to or removed from this list at any time.
Algeria Hungary Poland
Argentina India Qatar
Belize Indonesia Romania
Brazil Israel Russia
Bulgaria Jamaica Slovakia
Chile Jordan Slovenia
China Kazakhstan South Africa
Colombia Lebanon South Korea
Costa Rica Malaysia Taiwan
Cote D'Ivoire Mexico Thailand
Croatia Morocco Trinidad & Tobago
Czech Republic Nigeria Tunisia
Ecuador Pakistan Turkey
Egypt Panama Ukraine
El Salvador Peru Uruguay
Guatemala Philippines Venezuela
Dominican Republic
Investing in emerging market securities imposes risks different
from, or greater than, risks of investing in domestic securities
or in foreign, developed countries. These risks include: smaller
market capitalization of securities markets, which may suffer
periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; possible repatriation of
investment income and capital. In addition, foreign investors may
be required to register the proceeds of sales; future economic or
political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization,
or creation of government monopolies. The currencies of emerging
market countries may experience significant declines against the
U.S. dollar, and devaluation may occur subsequent to investments
in these currencies by a Fund. Inflation and rapid fluctuations
in inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging markets securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be
unable to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive
investment opportunities, hold a portion of its assets in cash
pending investment, or be delayed in disposing of a portfolio
security. Such a delay could result in possible liability to a
purchaser of the security.
Investment The AllianceBernstein International Growth Fund's investments
in include investments in securities of companies that are
Privatized established as a result of privatizations of state enterprises.
Enterprises These investments may be in the initial offering of publicly
by traded equity securities of a government- or state-owned or
Alliance- controlled company or enterprise, through the purchase of
Bernstein securities of a current or former state enterprise following its
International initial equity offering, or through the privately negotiated
Growth Fund purchases of stock or other equity interests in a state
enterprise that has not yet conducted an initial equity offering.
Because privatizations are integral to a country's economic
restructuring, securities sold in initial equity offerings may be
particularly attractive investments since they often are priced
attractively to secure the issuer's successful transition to
private sector ownership.
In certain jurisdictions, the ability of foreign entities, such
as the Fund, to participate in privatizations may be limited by
local law, or the price or terms on which the Fund may be able to
participate may be less advantageous than for local investors.
There can be no assurance that proposed privatizations will be
successful or that governments will not re-nationalize
enterprises that have been privatized. Furthermore, large blocks
of the stock of certain of these enterprises may be held by a
small group of stockholders, after the initial equity offerings
by those enterprises. The sale of some portion or all of those
blocks could have an adverse effect on the price of the stock of
any such enterprise.
Foreign A Fund that invests some portion of its assets in securities
(Non-U.S.) denominated in, and receives revenues in, foreign currencies will
Currencies be adversely affected by reductions in the value of those
currencies relative to the U.S. Dollar. Foreign currency exchange
rates may fluctuate significantly. They are determined by supply
and demand in the foreign exchange markets, the relative merits
of investments in different countries, actual or perceived
changes in interest rates, and other complex factors. Currency
exchange rates also can be affected unpredictably by intervention
(or the failure to intervene) by U.S. or foreign governments or
central banks or by currency controls or political developments.
In light of these risks, a Fund may engage in certain currency
hedging transactions, as described above, which involve certain
special risks.
Investment A Fund may invest in smaller, emerging companies. Investment in
in such companies involves greater risks than is customarily
Smaller, associated with securities of more established companies.
Less- Companies in the earlier stages of their development often have
Seasoned products and management personnel which have not been thoroughly
Companies tested by time or the marketplace; their financial resources may
not be as substantial as those of more established companies. The
securities of smaller companies may have relatively limited
marketability and may be subject to more abrupt or erratic market
movements than securities of larger companies or broad market
indices. The revenue flow of such companies may be erratic and
their results of operations may fluctuate widely and may also
contribute to stock price volatility.
Future A Fund may, following written notice to its shareholders, take
Developments advantage of other investment practices that are not currently
contemplated for use by the Fund, or are not available but may
yet be developed, to the extent such investment practices are
consistent with the Fund's investment objective and legally
permissible for the Fund. Such investment practices, if they
arise, may involve risks that exceed those involved in the
activities described above.
Changes in A Fund's Board of Directors may change a Fund's investment
Investment objective without shareholder approval. The Fund will provide
Objectives shareholders with 60 days' prior written notice of any change to
and the Fund's investment objective. Unless otherwise noted, all
Policies other investment policies of a Fund may be changed without
shareholder approval.
General The successful use of the investment practices described above
draws upon the Adviser's special skills and experience and
usually depends on the Adviser's ability to forecast price
movements, interest rates, or currency exchange rate movements
correctly. Should interest rates, prices or exchange rates move
unexpectedly, a Fund may not achieve the anticipated benefits of
the transactions or may realize losses and thus be in a worse
position than if such strategies had not been used. Unlike many
exchange-traded futures contracts and options on futures
contracts, there are no daily price fluctuation limits for
certain options on currencies and forward contracts, and adverse
market movements could therefore continue to an unlimited extent
over a period of time. In addition, the correlation between
movements in the prices of such instruments and movements in the
prices of the securities and currencies hedged or used for cover
will not be perfect and could produce unanticipated losses.
Portfolio The portfolio turnover rate for each Fund is included in the
Turnover Financial Highlights section. The Funds are actively managed and,
in some cases in response to market conditions, a Fund's
portfolio turnover may exceed 100%. A higher rate of portfolio
turnover increases brokerage and other expenses, which must be
borne by the Fund and its shareholders. High portfolio turnover
also may result in the realization of substantial net short-term
capital gains, which, when distributed, are taxable to
shareholders.
Temporary For temporary defensive purposes in an attempt to respond to
Defensive adverse market, economic, political or other conditions, each
Position Fund may reduce its position in equity securities and invest in,
without limit, certain types of short-term, liquid, high grade or
high-quality (depending on the Fund) debt securities. While the
Funds are investing for temporary defensive purposes, they may
not meet their investment objectives.
Portfolio The Adviser publishes a complete schedule of the portfolio
Holdings holdings for the AllianceBernstein Growth Funds monthly on
www.AllianceBernstein.com (click on "US Investors & Financial
Advisors" then "Investment Solutions - Mutual Funds"). The
Adviser posts the schedule on the website as of the last day of
each calendar month, approximately 30 days after the end of that
month. This posted information generally remains accessible on
the website for three months. In addition, the Adviser may post
information about the number of securities a Fund holds, a
summary of the Fund's top ten holdings (including name and the
percentage of the Fund's assets invested in each holding), and a
percentage breakdown of the fund's investments by country, sector
and industry, as applicable. Each Fund's SAI includes a
description of the policies and procedures that apply to
disclosure of the Fund's portfolio holdings.
MANAGEMENT OF THE FUNDS
--------------------------------------------------------------------------------
INVESTMENT ADVISER
Each Fund's Adviser is AllianceBernstein L.P., 1345 Avenue of the Americas, New
York, NY 10105. The Adviser is a leading international investment adviser
supervising client accounts with assets as of June 30, 2006 totaling
approximately $625 billion (of which approximately $88 billion represented
assets of investment companies). As of June 30, 2006, the Adviser managed
retirement assets for many of the largest public and private employee benefit
plans (including 41 of the nation's FORTUNE 100 companies), for public employee
retirement funds in 37 states, for investment companies, and for foundations,
endowments, banks and insurance companies worldwide. The 45 registered
investment companies managed by the Adviser, comprising 126 separate investment
portfolios, currently have approximately 4.0 million shareholder accounts.
The Adviser provides investment advisory services and order placement facilities
for the Funds. For these advisory services, each of the Funds paid the Adviser
during its most recent fiscal year, a percentage of average daily net assets as
follows:
Fee as a percentage of Fiscal
Fund average daily net assets* Year Ended
---- ------------------------ ----------
AllianceBernstein Large Cap Growth
Fund [_____]% 7/31/06
AllianceBernstein Growth Fund [_____]% 7/31/06
AllianceBernstein Mid-Cap Growth
Fund [_____]% 7/31/06
AllianceBernstein Small Cap Growth
Portfolio [_____]% 7/31/06
AllianceBernstein Global
Technology Fund [_____]% 7/31/06
AllianceBernstein Global Health
Care Fund [_____]% 6/30/06
AllianceBernstein Global Research
Growth Fund [_____]% 6/30/06
AllianceBernstein International
Growth Fund [_____]% 6/30/06
----------
* Fee stated net of any waivers and/or reimbursements. See "Fees and Expenses
of the Funds" at the beginning of the Prospectus for more information about
fee waivers.
A discussion regarding the basis for the Board of Directors' approval of each
Fund's investment advisory agreement is available in the Fund's annual report to
shareholders for the fiscal year ended shown in the table above.
The Adviser may act as an investment adviser to other persons, firms or
corporations, including investment companies, hedge funds, pension funds and
other institutional investors. The Adviser may receive management fees,
including performance fees, that may be higher or lower than the advisory fees
it receives from the Funds. Certain other clients of the Adviser may have
investment objectives and policies similar to those of a Fund. The Adviser may,
from time to time, make recommendations which result in the purchase or sale of
a particular security by its other clients simultaneously with a Fund. If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price or quantity. It is the policy of
the Adviser to allocate advisory recommendations and the placing of orders in a
manner that is deemed equitable by the Adviser to the accounts involved,
including the Funds. When two or more of the clients of the Adviser (including a
Fund) are purchasing or selling the same security on a given day from the same
broker-dealer, such transactions may be averaged as to price.
PORTFOLIO MANAGERS
The day-to-day management of and investment decisions for the AllianceBernstein
Large Cap Growth Fund are made by the Adviser's U.S. Large Cap Growth Investment
Team. The U.S. Large Cap Growth Investment Team relies heavily on the
fundamental analysis and research of the Adviser's large internal research
staff.
The following table lists the senior members of the U.S. Large Cap Growth
Investment Team with the responsibility for day-to-day management of the Fund's
portfolio, the year that each person assumed joint and primary responsibility
for the Fund, and each person's principal occupation during the past five years:
Principal Occupation During The Past Five (5)
Employee; Year; Title Years
--------------------- -----------------------------------------------
James G. Reilly; since 2006; Executive Vice President of the Adviser with
Executive Vice President of which he has been associated since prior to
the Adviser 2001. Mr. Reilly has been a member of the U.S.
Large Cap Growth Investment Team since 1988.
David P. Handke, Jr.; Senior Vice President of the Adviser with which
since 2006; Senior Vice he has been associated since prior to 2001. Mr.
President of the Adviser Handke has been a member of the U.S. Large Cap
Growth Investment Team since 1984.
Scott Wallace; since 2006; Senior Vice President of the Adviser with which
Senior Vice President of the he has been associated since prior to 2001. Mr.
Adviser Wallace has been a member of the U.S. Large Cap
Growth Investment Team since 2001.
Michael J. Reilly; since Senior Vice President of the Adviser with which
2006; Senior Vice President he has been associated since prior to 2001. Mr.
of the Adviser Reilly has been a member of the U.S. Large Cap
Growth Investment Team since 1992.
Syed J. Hasnain; since 2006; Senior Vice President of the Adviser with which
Senior Vice President of the he has been associated since prior to 2001. Mr.
Adviser Hasnain has been a member of the U.S. Large Cap
Growth Investment Team since 1994.
The day-to-day management of and investment decisions for the AllianceBernstein
Growth Fund are made by the Adviser's U.S. Growth Team. The U.S. Growth Team
relies heavily on the fundamental analysis and research of the Adviser's large
internal research staff.
The following table lists the senior members of the U.S. Growth Team with the
responsibility for day-to-day management of the Fund's portfolio, the year that
each person assumed joint and primary responsibility for the Fund, and each
person's principal occupation during the past five years:
Principal Occupation During The Past Five (5)
Employee; Year; Title Years
--------------------- -----------------------------------------------
Alan Levi; since 2000; Senior Vice President of the Adviser with which
Senior Vice President of he has been associated in a substantially
the Adviser similar capacity to his current position since
prior to 2001. Mr. Levi is the team leader of
the U.S. Growth Team since 2002 and was
formerly head of growth research at the
Adviser.
Jack Plym; since 2006; Senior Vice President of the Adviser with which
Senior Vice President of he has been associated in a substantially
the Adviser similar capacity to his current position since
prior to 2001.
Bill Baird; since 2006; Senior Vice President of the Adviser with which
Senior Vice President he has been associated in a substantially
of the Adviser similar capacity to his current position since
prior to 2001.
Robert Ginsberg; since 2006; Senior Vice President of the Adviser with which
Senior Vice President he has been associated in a substantially
of the Adviser similar capacity to his current position since
prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
Mid-Cap Growth Fund are made by the Adviser's U.S. Mid Cap Growth Team. The U.S.
Mid Cap Growth Team relies heavily on the fundamental analysis and research of
the Adviser's large internal research staff.
The following table lists the senior members of the U.S. Mid Cap Growth Team
with the responsibility for day-to-day management of the Fund's portfolio, the
year that each person assumed joint and primary responsibility for the Fund, and
each person's principal occupation during the past five years:
Principal Occupation During The Past Five (5)
Employee; Year; Title Years
--------------------- -----------------------------------------------
Catherine Wood; since 2002; Senior Vice President of the Adviser with which
Senior Vice President she has been associated in a substantially
of the Adviser similar capacity to her current position since
2001. Prior thereto, she was a general partner
and portfolio manager with Tupelo Capital
Management.
John Fogarty; since 2006; Senior Vice President of the Adviser since
Senior Vice President 2006. Prior thereto he was a hedge fund manager
of the Adviser at Dialectic Capital and Vardon Partners since
2003. Prior thereto he was a U.S. Large Cap
Growth portfolio manager with the Adviser since
prior to 2001.
Amy Raskin; since 2006; Senior Vice President of the Adviser with which
Senior Vice President she has been associated in a substantially
of the Adviser similar capacity to her current position since
prior to 2001.
Tom Zottner; since 2006; Vice President of the Adviser with which he has
Vice President of the been associated in a substantially similar
Adviser capacity to his current position since March
2001.
Ben Ruegsegger; since 2006; Assistant Vice President of the Adviser with
Assistant Vice President which he has been associated in a substantially
of the Adviser similar capacity to his current position since
2001.
The management of and investment decisions for the AllianceBernstein Small Cap
Growth Portfolio's portfolio are made by the Adviser's team of research sector
heads (the "Small Cap Growth Investment Team"). The Small Cap Growth Investment
Team relies heavily on the fundamental analysis and research of the Adviser's
large internal research staff. No one person is principally responsible for
making recommendations for the Fund's portfolio.
The following table lists the persons within the Small Cap Growth Investment
Team with the most significant responsibility for the day-to-day management of
the AllianceBernstein Small Cap Growth Portfolio, the length of time that each
person has been responsible for the Fund, and each person's principal occupation
during the past five years:
Principal Occupation During The Past Five (5)
Employee; Year; Title Years
--------------------- -----------------------------------------------
Bruce K. Aronow; since 1999; Senior Vice President of the Adviser with which
Senior Vice President he has been associated in a substantially
of the Adviser similar capacity to his current position since
prior to 2001.
Kumar Kirpalani; since 2004; Vice President of the Adviser with which he has
Vice President of been associated in a substantially similar
the Adviser capacity to his current position since prior to
2001.
Samantha Lau; since 2004; Senior Vice President of the Adviser with which
Senior Vice President she has been associated in a substantially
of the Adviser similar capacity to her current position since
prior to 2001.
Wen-Tse Tseng; since 2006; Vice President of the Adviser with which he has
Vice President of been associated since March 2006. Prior
the Adviser thereto, he was the healthcare-sector portfolio
manager for the small-cap growth team at
William D. Witter since 2003. He also worked at
Weiss, Peck and Greer, managing the health care
sector with the same team with which he worked
at William D. Witter, from April 2002 to August
2003. Prior thereto he was a senior healthcare
analyst at JP Morgan Fleming Asset Management
since prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
Global Technology Fund's portfolio are made by Ms. Janet Walsh, Senior Vice
President of the Adviser. Ms. Walsh is a member of the Adviser's Global
Technology Research Team that collaborates actively on the management of the
Adviser's technology portfolios. In addition, Ms. Walsh relies heavily on the
fundamental analysis and research of the Adviser's large internal research
staff. Ms. Walsh has been responsible for the Fund's investments since 2003, and
has been with the firm in a substantially similar capacity to her current
position since prior to 2001.
The day-to-day management of and investment decisions for the AllianceBernstein
Global Health Care Fund's portfolio are made by Mr. Norman Fidel, Senior Vice
President of the Adviser. Mr. Fidel is a member of the Adviser's Global Health
Care Research Team that collaborates actively on the management of the Adviser's
health care portfolios. In addition, Mr. Fidel relies heavily on the fundamental
analysis and research of the Adviser's large internal research staff. Mr. Fidel
has been responsible for the Fund's investments since the Fund's inception, and
has been with the firm in a substantially similar capacity to his current
position since prior to 2001.
The day-to-day management and investment decisions for the AllianceBernstein
Global Research Growth Fund are made by the Adviser's Global Research Growth
research sector heads, with oversight by the Adviser's Global Research Growth
Portfolio Oversight Group.
Stock selection within each market sector of the Fund's portfolio is the
responsibility of a research sector head for that sector. The research sector
heads rely heavily on the fundamental analysis and research of the Adviser's
industry-focused equity analysts in the U.S. and abroad.
The Adviser's Global Research Growth Portfolio Oversight Group, comprised of
senior investment professionals, in consultation with the Global Research Growth
research sector heads, is responsible for determining the market sectors into
which the Fund's assets are invested and the percentage allocation into each
sector.
The following table lists the research sector heads with the responsibility for
the day-to-day management of the AllianceBernstein Global Research Growth Fund's
portfolio, the length of time that each person has been jointly and primarily
responsible for the Fund, and each person's principal occupation during the past
five years:
Principal Occupation During The Past Five (5)
Employee; Year; Title Years
--------------------- -----------------------------------------------
Norman M. Fidel; since Senior Vice President of the Adviser with which
inception; Senior Vice he has been associated in a substantially
President of the Adviser similar capacity to his current position since
prior to 2001.
Jane E. Schneirov; since Senior Vice President of the Adviser with which
inception; Senior Vice she has been associated in a substantially
President of the Adviser similar capacity to her current position since
prior to 2001.
Scott E. McElroy; since 2006; Senior Vice President of the Adviser with which
Senior Vice President he has been associated in a substantially
of the Adviser similar capacity to his current position since
prior to 2001.
Janet A. Walsh; since Senior Vice President of the Adviser with which
inception; Senior Vice she has been associated in a substantially
President of the Adviser similar capacity to her current position since
prior to 2001.
Thomas A. Schmitt; since Senior Vice President of the Adviser with which
inception; Senior Vice he has been associated in a substantially
President of the Adviser similar capacity to his current position since
prior to 2001.
Francis X. Suozzo; since Senior Vice President of the Adviser with which
inception; Senior Vice he has been associated in a substantially
President of the Adviser similar capacity to his current position since
prior to 2001.
The management of, and investment decisions for, the AllianceBernstein
International Growth Fund's portfolio are made by the International Growth
Portfolio Oversight Group, comprised of senior members of the Global Emerging
Markets Growth Investment Team and the International Large Cap Growth Investment
Team. Each Investment Team relies heavily on the fundamental analysis and
research of the Adviser's large internal research staff. No one person is
principally responsible for making recommendations for the Fund's portfolio.
The following table lists the persons within the Global Emerging Markets Growth
Investment Team and the International Large Cap Growth Investment Team with the
most significant responsibility for the day-to-day management of the Fund's
portfolio, the length of time that each person has been jointly and primarily
responsible for the Fund, and each person's principal occupation during the past
five years:
Employee; Year; Title; Principal Occupation During the Past Five (5)
Underlying Investment Team Years
-------------------------- -----------------------------------------------
Michael Levy; since 2003; Senior Vice President of ABL with which he has
Senior Vice President of been associated in a substantially similar
AllianceBernstein Limited capacity to his current position since prior to
("ABL"); Global Emerging 2001.
Growth Investment Team
Edward Baker III; since 2002; Senior Vice President and Chief Investment
Senior Vice President of the Officer-Emerging Markets of the Adviser with
Adviser; Global Emerging which he has been associated in a substantially
Growth Investment Team similar capacity to his current position since
prior to 2001.
Christopher Toub; since May Executive Vice President of the Adviser; with
2005; Executive Vice which he has been associated in a substantially
President of the Adviser; similar capacity to his current position since
International Large Cap prior to 2001.
Growth Investment Team
Greg Eckersley; since 2006; Senior Vice President of the Adviser with which
Senior Vice President of the he has been associated in a substantially
Adviser; International Large similar capacity to his current position since
Cap Growth Investment Team prior to 2001.
Bob Scheetz; since 2006; Senior Vice President of the Adviser with which
Senior Vice President of the he has been associated in a substantially
Adviser; International Large similar capacity to his current position since
Cap GrowthInvestment Team prior to 2001.
Additional Information about the Portfolio Managers may be found in each Fund's
SAI.
PERFORMANCE OF SIMILARLY MANAGED ACCOUNTS
Institutional accounts. In addition to its support in managing the assets of
AllianceBernstein Large Cap Growth Fund, the Large Cap Growth team currently has
ultimate responsibility for the management of discretionary tax-exempt accounts
of institutional clients managed as described below without significant
client-imposed restrictions ("Historical Portfolios"). These accounts have
substantially the same investment objectives and policies and are managed in
accordance with essentially the same investment strategies and techniques as
those for AllianceBernstein Large Cap Growth Fund. The Historical Portfolios are
not subject to certain limitations, diversification requirements and other
restrictions imposed under the 1940 Act and the Code to which AllianceBernstein
Large Cap Growth Fund, as a registered investment company, is subject and which,
if applicable to the Historical Portfolios, may have adversely affected the
performance results of the Historical Portfolios.
Set forth below is performance data provided by the Adviser relating to the
Historical Portfolios for the period during which the Large Cap Growth Team has
managed the Historical Portfolios. As of June 30, 2006 the assets in the
Historical Portfolios totaled approximately $20,170 million from 148 accounts.
Each Historical Portfolio has a nearly identical composition of investment
holdings and related percentage weightings.
The performance data is net of the maximum fee charged to any single account in
the composite (0.75%), which is a lower fee than the advisory fee historically
associated with an investment in the Fund and will therefore result in higher
performance for these accounts as compared to the Fund. The performance data is
also net of all brokerage commissions charged to those accounts, calculated on a
monthly basis. The Adviser has prepared and presented this data in compliance
with Global Investment Performance Standards ("GIPS"). The CFA Institute has not
been involved with the preparation or review of this data. The data has not been
adjusted to reflect any fees that will be payable by AllianceBernstein Large Cap
Growth Fund, which are higher than the fees imposed on the Historical Portfolio
and will result in a higher expense ratio and lower returns for
AllianceBernstein Large Cap Growth Fund. Expenses associated with the
distribution of share classes of AllianceBernstein Large Cap Growth Fund in
accordance with the plan adopted by AllianceBernstein Large Cap Growth Fund's
Board of Directors under Commission Rule 12b-1 are also excluded. The
performance data has also not been adjusted for corporate or individual taxes,
if any, payable by the account owners.
The Adviser has calculated the investment performance of the Historical
Portfolios on a trade-date basis. Dividends have been accrued at the end of the
month and cash flows weighted daily. Composite investment performance for all
portfolios has been determined on an asset weighted basis. New accounts are
included in the composite investment performance computations at the beginning
of the quarter following the initial contribution. The total returns set forth
below are calculated using a method that links the monthly return amounts for
the disclosed periods, resulting in a time-weighted rate of return.
The S&P 500 Index is a widely recognized, unmanaged index of market activity
based upon the aggregate performance of a selected portfolio of publicly traded
common stocks, including monthly adjustments to reflect the reinvestment of
dividends and other distributions. The S&P 500 Index reflects the total return
of securities comprising the Index, including changes in market prices as well
as accrued investment income, which is presumed to be reinvested. The Russell
1000 universe of securities is compiled by Frank Russell Company and is
segmented into two style indices, based on the capitalization-weighted median
book-to-price ratio of each of the securities. At each reconstitution, the
Russell 1000 constituents are ranked by their book-to-price ratio. Once so
ranked, the breakpoint for the two styles is determined by the median market
capitalization of the Russell 1000. Thus, those securities falling within the
top fifty percent of the cumulative market capitalization (as ranked by
descending book-to-price) become members of the Russell Price-Driven Indices.
The Russell 1000(R) Growth Index is, accordingly, designed to include those
Russell 1000 securities with a greater-than-average growth orientation. In
contrast with the securities in the Russell Price-Driven Indices, companies in
the Growth Index tend to exhibit higher price-to-book and price-earnings ratios,
lower dividend yield and higher forecasted growth values.
The S&P 500 Index and Russell 1000(R) Growth Index are included to illustrate
material economic and market factors that existed during the time period shown.
The S&P 500 Index and Russell 1000(R) Growth Index do not reflect the deduction
of any fees. If AllianceBernstein Large Cap Growth Fund were to purchase a
portfolio of securities substantially identical to the securities comprising the
S&P 500 Index or the Russell 1000(R) Growth Index, AllianceBernstein Large Cap
Growth Fund's performance relative to the index would be reduced by
AllianceBernstein Large Cap Growth Fund's expenses, including brokerage
commissions, advisory fees, distribution fees, custodial fees, transfer agency
costs and other administrative expenses, as well as by the impact on
AllianceBernstein Large Cap Growth Fund's shareholders of sales charges and
income taxes.
The investment performance for the periods presented may not be indicative of
future rates of return. The performance was not calculated pursuant to the
methodology established by the SEC that will be used to calculate the
AllianceBernstein Large Cap Growth Fund's performance. The use of methodology
different from that used to calculate performance could result in different
performance data.
The following performance data is provided solely to illustrate the Large Cap
Growth Team's performance in managing the Historical Portfolios as measured
against certain broad based market indices. Investors should not rely on the
following performance data of the Historical Portfolios as an indication of
future performance of AllianceBernstein Large Cap Growth Fund.
The average annual total returns presented below are based upon the cumulative
total return as of June 30, 2006 and, for more than one year, assume a steady
compounded rate of return and are not year-by-year results, which fluctuated
over the periods as shown.
AVERAGE ANNUAL TOTAL RETURNS
[Download Table]
Large Cap
Large Cap Growth Fund
Growth Fund (Class A with Historical S&P 500 Russell 1000(R)
(Class A at NAV) Sales Load) Portfolios Index Growth Index
---------------- ------------- ---------- ------- ---------------
One year..... 5.85% 1.38% 8.33% 8.62% 6.12%
Three years.. 8.45% 6.88% 9.15% 11.21% 8.35%
Five years... -3.52% -4.35% 0.94% 2.49% -0.76%
Ten years.... 5.31% 4.85% 7.98% 8.32% 5.42%
PERFORMANCE OF A SIMILARLY MANAGED PORTFOLIO
In addition to its support in managing the AllianceBernstein Global Research
Growth Fund's assets, the global growth research team currently has ultimate
responsibility over investment decisions of ACM Global Investments - Global
Growth Trends Portfolio, a mutual investment fund organized under the laws of
the Grand Duchy of Luxembourg of which the Adviser is the investment adviser and
which is available to non-U.S. investors (the "Historical Portfolio"). The
Historical Portfolio has substantially the same investment objective and
policies and has been managed in accordance with substantially similar
investment strategies and techniques as those contemplated for the
AllianceBernstein Global Research Growth Fund. The Historical Portfolio is not
subject to the same types of expenses as the AllianceBernstein Global Research
Growth Fund. In addition, it is not subject to the same diversification
requirements, tax restrictions and other investment limitations imposed on the
AllianceBernstein Global Research Growth Fund by the U.S. laws and regulations
applicable to U.S. mutual funds. The performance results of the Historical
Portfolio could have been negatively affected if it had been regulated as a U.S.
mutual fund.
Set forth below is performance data provided by the Adviser relating to the
Historical Portfolio for the period since its inception. As of December 31,
2005, the assets in the Historical Portfolio totaled approximately $4.2 billion.
The performance data is for the Historical Portfolio's Class AX shares and net
of all fees charged to the Historical Portfolio. The data has not been adjusted
to reflect any fees that are payable by the AllianceBernstein Global Research
Growth Fund, which may be higher than the fees imposed on the Historical
Portfolio. The performance data also has not been adjusted for taxes, if any,
payable by the shareholders of the Historical Portfolio.
As reflected below, the Historical Portfolio has over time performed favorably
when compared with the performance of the MSCI World Index. The unmanaged Morgan
Stanley Capital International (MSCI) World Index is a market
capitalization-weighted index and it does not reflect fees and expenses; it
measures the performance of stock markets in 23 countries.
The investment performance for the periods presented may not be indicative of
future rates of return. The performance was not calculated pursuant to the
methodology established by the SEC that will be used to calculate the
AllianceBernstein Global Research Growth Fund's performance. The use of
methodology different from that used to calculate performance could result in
different performance data.
The following performance data is provided solely to illustrate the past
performance of the global growth research team in managing the Historical
Portfolio. Investors should not rely on the following performance data of the
Historical Portfolio as an indication of future performance of the
AllianceBernstein Global Research Growth Fund.
SCHEDULE OF INVESTMENT PERFORMANCE -- HISTORICAL PORTFOLIO*
MSCI
Historical Portfolio World Index
Total Return** Total Return***
-------------------- ---------------
Year Ended December 31:
2005 15.85% 9.49%
2004 12.89% 15.25%
2003 32.95% 33.76%
2002 (18.69)% (19.54)%
2001 (14.44)% (16.52)%
2000 (0.13)% (12.92)%
1999 44.57% 25.34%
1998 26.15% 24.80%
1997 8.67% 16.23%
1996 14.43% 14.00%
1995 42.85% 21.32%
1994 5.43% 5.58%
1993 19.47% 23.13%
1992 9.34% (4.66)%
Cumulative total return
for the period October 25,
1991 (inception of the
Historical Portfolio) to
December 31, 2005 477.30% 198.07%
----------
* Total return is for the Historical Portfolio's Class AX shares. Total
return is a measure of investment performance that is based upon the change
in value of an investment from the beginning to the end of a specified
period and assumes reinvestment of all dividends and other distributions.
The basis of preparation of this data is described in the preceding
discussion.
** Net of all fees charged on the Class AX shares.
*** Since Inception cumulative Index returns are from October 31, 1991.
The average annual total returns presented below are based upon the cumulative
total return as of December 31, 2005 and, for more than one year, assume a
steady compounded rate of return and are not year-by-year results, which
fluctuated over the periods as shown.
AVERAGE ANNUAL TOTAL RETURNS
Historical Portfolio+ MSCI World Index
--------------------- ----------------
One Year 15.85% 9.49%
Three Years 20.25% 18.69%
Five Years 3.88% 2.18%
Ten Years 10.60% 7.04%
Since October 25, 1991
(inception of the
Historical Portfolio) 13.16% 8.01%++
----------
+ Historical Portfolio returns are of the Class AX shares and are net of all
fees.
++ Since inception average annual total returns are from October 31, 1991.
Legal Proceedings
On April 8, 2002, in In re Enron Corporation Securities Litigation, a
consolidated complaint (as subsequently amended, the "Enron Complaint") was
filed in the United States District Court for the Southern District of Texas,
Houston Division, against numerous defendants, including the Adviser. The
principal allegations of the Enron Complaint, as they pertain to the Adviser,
are that the Adviser violated Sections 11 and 15 of the Securities Act with
respect to a registration statement filed by Enron Corp. ("Enron") and effective
with the Commission on July 18, 2001, which was used to sell $1.9 billion Enron
Zero Coupon Convertible Notes due 2021. Plaintiffs allege that the registration
statement was materially misleading and that Frank Savage, a director of Enron,
signed the registration statement at issue. Plaintiffs further allege that the
Adviser was a controlling person of Frank Savage, who was at that time an
employee of the Adviser and a director of AllianceBernstein Corporation.
Plaintiffs therefore assert that the Adviser is itself liable for the allegedly
misleading registration statement. Plaintiffs seek rescission or a rescissionary
measure of damages. On April 12, 2006, the Adviser moved for summary judgment
dismissing the Enron Complaint as the allegations therein pertain to the
Adviser. This motion is pending. On July 5, 2006 the court granted plaintiffs'
amended motion for class certification.
As has been previously reported in the press, the Staff of the Commission and
the Office of the New York Attorney General ("NYAG") have been investigating
practices in the mutual fund industry identified as "market timing" and "late
trading" of mutual fund shares. Certain other regulatory authorities have also
been conducting investigations into these practices within the industry and have
requested that the Adviser provide information to them. The Adviser has been
cooperating and will continue to cooperate with all of these authorities.
On December 18, 2003, the Adviser confirmed that it had reached terms with the
Commission and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the Commission is reflected in an Order of the
Commission ("Commission Order"). The agreement with the NYAG is memorialized in
an Assurance of Discontinuance dated September 1, 2004 ("NYAG Order"). Among the
key provisions of these agreements are the following:
(i) The Adviser agreed to establish a $250 million fund (the "Reimbursement
Fund") to compensate mutual fund shareholders for the adverse effects of
market timing attributable to market timing relationships described in the
Commission Order. According to the Commission Order, the Reimbursement
Fund is to be paid, in order of priority, to fund investors based on (a)
their aliquot share of losses suffered by the fund due to market timing,
and (b) a proportionate share of advisory fees paid by such fund during
the period of such market timing;
(ii) The Adviser agreed to reduce the advisory fees it receives from some of
the AllianceBernstein long-term, open-end retail funds until December 31,
2008; and
(iii) The Adviser agreed to implement changes to its governance and compliance
procedures. Additionally, the Commission Order and the NYAG Order
contemplate that the Adviser's registered investment company clients,
including the Funds, will introduce governance and compliance changes.
In anticipation of final, definitive documentation of the NYAG Order and
effective January 1, 2004, the Adviser began waiving a portion of the advisory
fee it receives for managing the Funds. On September 7, 2004, each Fund's
advisory agreement was amended to reflect the reduced advisory fee.
On October 2, 2003, a putative class action complaint entitled Hindo et al. v.
AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint") was filed
against the Adviser; AllianceBernstein Holding L.P. ("Holding");
AllianceBernstein Corporation; AXA Financial, Inc.; the AllianceBernstein Mutual
Funds, certain officers of the Adviser ("Alliance defendants"); and certain
other defendants not affiliated with the Adviser, as well as unnamed Doe
defendants. The Hindo Complaint was filed in the United States District Court
for the Southern District of New York by alleged shareholders of two of the
AllianceBernstein Mutual Funds. The Hindo Complaint alleges that certain of the
Alliance defendants failed to disclose that they improperly allowed certain
hedge funds and other unidentified parties to engage in "late trading" and
"market timing" of AllianceBernstein Mutual Fund securities, violating Sections
11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act,
and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified
amount of compensatory damages and rescission of their contracts with the
Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts.
Since October 2, 2003, additional lawsuits making factual allegations generally
similar to those in the Hindo Complaint were filed in various federal and state
courts against the Adviser and certain other defendants. The plaintiffs in such
lawsuits have asserted a variety of theories for recovery including, but not
limited to, violations of the Securities Act, the Exchange Act, the Advisers
Act, the Investment Company Act, the Employee Retirement Income Security Act of
1974, as amended ("ERISA") certain state securities laws and common law. All
state court actions against the Adviser either were voluntarily dismissed or
removed to federal court. On February 20, 2004, the Judicial Panel on
Multidistrict Litigation transferred all federal actions to the United States
District Court for the District of Maryland (the "Mutual Fund MDL").
On September 29, 2004, plaintiffs filed consolidated amended complaints with
respect to four claim types: mutual fund shareholder claims; mutual fund
derivative claims; derivative claims brought on behalf of Holding; and claims
brought under ERISA by participants in the Profit Sharing Plan for Employees of
the Adviser. All four complaints include substantially identical factual
allegations, which appear to be based in large part on the Commission Order and
the NYAG Order. On April 21, 2006, the Adviser and attorneys for the plaintiffs
in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA
claims entered into a confidential memorandum of understanding ("MOU")
containing their agreement to settle these claims. The agreement will be
documented by a stipulation of settlement and will be submitted for court
approval at a later date. The settlement amount, which we previously accrued and
disclosed, has been disbursed. The derivative claims brought on behalf of
Holding remain pending. Plaintiff seeks an unspecified amount of damages.
On February 10, 2004, the Adviser received (i) a subpoena duces tecum from the
Office of the Attorney General of the State of West Virginia and (ii) a request
for information from West Virginia's Office of the State Auditor, Securities
Commission (the "West Virginia Securities Commission") (together, the
"Information Requests"). Both Information Requests require the Adviser to
produce documents concerning, among other things, any market timing or late
trading in the Adviser's sponsored mutual funds. The Adviser responded to the
Information Requests and has been cooperating fully with the investigation.
On April 11, 2005, a complaint entitled The Attorney General of the State of
West Virginia v. AIM Advisors, Inc., et al. ("WVAG Complaint") was filed against
the Adviser, Holding, and various other defendants not affiliated with the
Adviser. The WVAG Complaint was filed in the Circuit Court of Marshall County,
West Virginia by the Attorney General of the State of West Virginia. The WVAG
Complaint makes factual allegations generally similar to those in the Hindo
Complaint. On October 19, 2005, the WVAG Complaint was transferred to the Mutual
Fund MDL.
On August 30, 2005, the deputy commissioner of securities of the West Virginia
Securities Commission signed a "Summary Order to Cease and Desist, and Notice of
Right to Hearing" addressed to the Adviser and Holding. The Summary Order claims
that the Adviser and Holding violated the West Virginia Uniform Securities Act,
and makes factual allegations generally similar to those in the Commission Order
and the NYAG Order. On January 26, 2006, the Adviser, Holding, and various
unaffiliated defendants filed a Petition for Writ of Prohibition and Order
Suspending Proceedings in West Virginia state court seeking to vacate the
Summary Order and for other relief. On April 12, 2006, respondents' petition was
denied. The Adviser intends to vigorously defend against the allegations in the
WVAG Complaint. On May 4, 2006, respondents appealed the court's determination.
On June 22, 2004, a purported class action complaint entitled Aucoin, et al. v.
Alliance Capital Management L.P., et al. (the "Aucoin Complaint") was filed
against the Adviser, Holding, AllianceBernstein Corporation, AXA Financial,
Inc., AllianceBernstein Investments, Inc., certain current and former directors
of the AllianceBernstein Mutual Funds, and unnamed Doe defendants. The Aucoin
Complaint names certain of the AllianceBernstein Mutual Funds as nominal
defendants. The Aucoin Complaint was filed in the United States District Court
for the Southern District of New York by an alleged shareholder of an
AllianceBernstein mutual fund. The Aucoin Complaint alleges, among other things,
(i) that certain of the defendants improperly authorized the payment of
excessive commissions and other fees from AllianceBernstein Fund assets to
broker-dealers in exchange for preferential marketing services, (ii) that
certain of the defendants misrepresented and omitted from registration
statements and other reports material facts concerning such payments, and (iii)
that certain defendants caused such conduct as control persons of other
defendants. The Aucoin Complaint asserts claims for violations of Sections
34(b), 36(b) and 48(a) of the 1940 Act, Sections 206 and 215 of the Advisers
Act, breach of common law fiduciary duties, and aiding and abetting breaches of
common law fiduciary duties. Plaintiffs seek an unspecified amount of
compensatory damages and punitive damages, rescission of their contracts with
the Adviser, including recovery of all fees paid to the Adviser pursuant to such
contracts, an accounting of all AllianceBernstein Fund-related fees, commissions
and soft dollar payments, and restitution of all unlawfully or discriminatorily
obtained fees and expenses.
Since June 22, 2004, nine additional lawsuits making factual allegations
substantially similar to those in the Aucoin Complaint were filed against the
Adviser and certain other defendants. All nine of the lawsuits (i) were brought
as class actions filed in the United States District Court for the Southern
District of New York, (ii) assert claims substantially identical to the Aucoin
Complaint, and (iii) are brought on behalf of shareholders of the funds.
On February 2, 2005, plaintiffs filed a consolidated amended class action
complaint ("Aucoin Consolidated Amended Complaint"), which asserts claims
substantially similar to the Aucoin Complaint and the nine additional lawsuits
referenced above. On October 19, 2005, the District Court dismissed each of the
claims set forth in the Aucoin Consolidated Amended Complaint, except for
plaintiff's claim under Section 36(b) of the Investment Company Act.
On January 11, 2006, the District Court granted defendants' motion for
reconsideration and dismissed the remaining Section 36(b) claim. On May 31,
2006, the District Court denied plaintiffs' motion for leave to file their
amended complaint. On July 5, 2006, plaintiffs filed a notice of appeal.
It is possible that these matters and/or other developments resulting from these
matters could result in increased redemptions of the Funds' shares or other
adverse consequences to the Funds. This may require the Funds to sell
investments to provide for sufficient liquidity and could also have an adverse
effect on the investment performance of the Funds. However, the Adviser believes
that these matters are not likely to have a material adverse effect on its
ability to perform advisory services relating to the Funds.
TRANSFER AGENCY AND RETIREMENT PLAN SERVICES
ABIS acts as the transfer agent for the Funds. ABIS, an indirect wholly-owned
subsidiary of the Adviser, registers the transfer, issuance and redemption of
Fund shares and disburses dividends and other distributions to Fund
shareholders.
Retirement plans may also hold Fund shares in the name of the plan, rather than
the participant. Plan recordkeepers, who may have affiliated financial
intermediaries who sell shares of the Funds, may be paid for each participant
fund account in amounts up to $19 fund account per annum and/or up to 0.25% per
annum of the average daily assets held in the plan. To the extent any of these
payments for recordkeeping services, transfer agency services or retirement plan
accounts are made by the Funds, they are included in the amount appearing
opposite the caption "Other Expenses" found in the Fund expense tables under
"Fees and Expenses of the Funds." In addition, financial intermediaries may be
affiliates of entities that receive compensation from the Adviser or ABI for
maintaining retirement plan "platforms" that facilitate trading by affiliated
and non-affiliated financial intermediaries and recordkeeping for retirement
plans.
Because financial intermediaries and plan recordkeepers may be paid varying
amounts per class for sub-transfer agency and related recordkeeping services,
the service requirements of which may also vary by class, this may create an
additional incentive for financial intermediaries and their financial advisors
to favor one fund complex over another or one class of shares over another.
DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------
Each Fund's income dividends and capital gains distributions, if any, declared
by a Fund on its outstanding shares will, at the election of each shareholder,
be paid in cash or in additional shares of the same class of shares of that
Fund. If paid in additional shares, the shares will have an aggregate net asset
value as of the close of business on the declaration date of the dividend or
distribution equal to the cash amount of the dividend or distribution. You may
make an election to receive dividends and distributions in cash or in shares at
the time you purchase shares. Your election can be changed at any time prior to
a record date for a dividend. There is no sales or other charge in connection
with the reinvestment of dividends or capital gains distributions. Cash
dividends may be paid in check, or, at your election, electronically via the ACH
network.
If you receive an income dividend or capital gains distribution in cash you may,
within 120 days following the date of its payment, reinvest the dividend or
distribution in additional shares of that Fund without charge by returning to
the Adviser, with appropriate instructions, the check representing the dividend
or distribution. Thereafter, unless you otherwise specify, you will be deemed to
have elected to reinvest all subsequent dividends and distributions in shares of
that Fund.
While it is the intention of each Fund to distribute to its shareholders
substantially all of each fiscal year's net income and net realized capital
gains, if any, the amount and timing of any dividend or distribution will depend
on the realization by the Fund of income and capital gains from investments.
There is no fixed dividend rate and there can be no assurance that a Fund will
pay any dividends or realize any capital gains. The final determination of the
amount of a Fund's return of capital distributions for the period will be made
after the end of each calendar year. Investments made through a 401(k) plan, 457
plan, employer sponsored 403(b) plan, profit sharing and money purchase plan,
defined benefit plan or a nonqualified deferred compensation plan are subject to
special United States federal income tax rules. Therefore, the federal income
tax consequences described below apply only to investments made other than by
such plans.
You will normally have to pay federal income tax, and any state or local income
taxes, on the distributions you receive from a Fund, whether you take the
distributions in cash or reinvest them in additional shares. Distributions of
net capital gains from the sale of investments that a Fund owned for more than
one year and that are properly designated as capital gain dividends are taxable
as long-term capital gains. For taxable years beginning on or before December
31, 2008, distributions of dividends to a Fund's non-corporate shareholders may
be treated as "qualified dividend income", which is taxed at reduced rates, if
such distributions are derived from, and designated by a Fund as, "qualified
dividend income" and provided that holding period and other requirements are met
by both the shareholder and the Fund. "Qualified dividend income" generally is
income derived from dividends from U.S. corporations and "qualified foreign
corporations." Other distributions by a Fund are generally taxable to you as
ordinary income. Dividends declared in October, November, or December and paid
in January of the following year are taxable as if they had been paid the
previous December. A Fund will notify you as to how much of the Fund's
distributions, if any, qualify for these reduced tax rates.
Investment income received by a Fund from sources within foreign countries may
be subject to foreign income taxes withheld at the source. To the extent that
any Fund is liable for foreign income taxes withheld at the source, the Fund
intends, if possible, to operate so as to meet the requirements of the Code to
"pass through" to the Fund's shareholders credits for foreign income taxes paid
(or to permit shareholders to claim a deduction for such foreign taxes), but
there can be no assurance that any Fund will be able to do so, and Funds that
invest primarily in U.S. securities will not do so. Furthermore, a shareholder's
ability to claim a foreign tax credit or deduction for foreign taxes paid by a
Fund may be subject to certain limitations imposed by the Code, as a result of
which a shareholder may not be permitted to claim a credit or deduction for all
or a portion of the amount of such taxes.
Under certain circumstances, if a Fund realizes losses (e.g., from fluctuations
in currency exchange rates) after paying a dividend, all or a portion of the
dividend may subsequently be characterized as a return of capital. Returns of
capital are generally nontaxable, but will reduce a shareholder's basis in
shares of the Fund. If that basis is reduced to zero (which could happen if the
shareholder does not reinvest distributions and returns of capital are
significant), any further returns of capital will be taxable as capital gain.
If you buy shares just before a Fund deducts a distribution from its NAV, you
will pay the full price for the shares and then receive a portion of the price
back as a taxable distribution.
The sale or exchange of Fund shares is a taxable transaction for federal income
tax purposes.
Each year shortly after December 31, each Fund will send you tax information
stating the amount and type of all its distributions for the year. You are
encouraged to consult your tax adviser about the federal, state, and local tax
consequences in your particular circumstances, as well as about any possible
foreign tax consequences.
Non-U.S. Shareholders
If you are a nonresident alien individual or a foreign corporation for federal
income tax purposes, please see the Funds' SAIs for information on how you may
be affected by the American Jobs Creation Act of 2004, including new rules for a
Fund's distributions of gain attributable to "U.S. real property interests."
GENERAL INFORMATION
--------------------------------------------------------------------------------
Under unusual circumstances, a Fund may suspend redemptions or postpone payment
for up to seven days or longer, as permitted by federal securities law. The
Funds reserve the right to close an account that has remained below $500 for 90
days.
During drastic economic or market developments, you might have difficulty in
reaching ABIS by telephone, in which event you should issue written instructions
to ABIS. ABIS is not responsible for the authenticity of telephone requests to
purchase, sell, or exchange shares. ABIS will employ reasonable procedures to
verify that telephone requests are genuine, and could be liable for losses
resulting from unauthorized transactions if it failed to do so. Dealers and
agents may charge a commission for handling telephone requests. The telephone
service may be suspended or terminated at any time without notice.
Shareholder Services. ABIS offers a variety of shareholder services. For more
information about these services or your account, call ABIS's toll-free number,
800-221-5672. Some services are described in the Subscription Application.
Householding. Many shareholders of the AllianceBernstein Mutual Funds have
family members living in the same home who also own shares of the same Funds. In
order to reduce the amount of duplicative mail that is sent to homes with more
than one Fund account and to reduce expenses of the Fund, all AllianceBernstein
Mutual Funds will, until notified otherwise, send only one copy of each
prospectus, shareholder report and proxy statement to each household address.
This process, known as "householding", does not apply to account statements,
confirmations, or personal tax information. If you do not wish to participate in
householding, or wish to discontinue householding at any time, call ABIS at
800-221-5672. We will resume separate mailings for your account within 30 days
of your request.
GLOSSARY OF INVESTMENT TERMS
--------------------------------------------------------------------------------
Convertible securities are fixed-income securities that are convertible into
common stock.
Depositary receipts include American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs"), European Depositary Receipts ("EDRs") and other
types of depositary receipts.
Equity securities include (i) common stocks, partnership interests, business
trust shares and other equity or ownership interests in business enterprises and
(ii) securities convertible into, and rights and warrants to subscribe for the
purchase of, such stocks, shares and interests.
Fixed-income securities are debt securities and dividend-paying preferred
stocks, including floating rate and variable rate instruments.
U.S. Government securities are securities issued or guaranteed by the United
States Government, its agencies or instrumentalities, or by government-sponsored
entities.
Russell 1000(R) Growth Index measures the performance of those Russell 1000
Companies (the largest 1,000 U.S. companies by capitalization) with higher
price-to-book ratios and higher forecasted growth values.
Russell Midcap(R) Growth Index measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The companies are also included in the Russell 1000(R) Growth index.
S&P 500 Index is Standard & Poor's Ratings Services' 500 Composite Stock Price
Index, a widely recognized unmanaged index of market activity.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The financial highlights table is intended to help you understand each Fund's
financial performance for the past five years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
share of each Fund. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). Except as otherwise indicated,
this information for the most recently completed fiscal year has been audited by
[_____________] and this information for the prior four years has been audited
by [________________], independent registered public accounting firms for
AllianceBernstein Large Cap Growth Fund, AllianceBernstein Growth Fund and
AllianceBernstein Mid-Cap Growth Fund, AllianceBernstein Global Health Care
Fund, AllianceBernstein Global Research Growth Fund and AllianceBernstein
International Growth Fund and this information for all fiscal years has been
audited by [____________], the independent registered public accounting firm for
AllianceBernstein Small Cap Growth Portfolio and AllianceBernstein Global
Technology Fund, whose reports, along with each Fund's financial statements, are
included in each Fund's annual report, which is available upon request.
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
---------------------------------------- ---------------------------------------------
Net Gains
or Losses
on Distri-
Investments butions Distri-
Net Asset Net (both Dividends in Excess Tax butions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------------- -------- ----------- ----------- ---------- ---------- ---------- -------- --------
AllianceBernstein Large Cap
Growth Fund
Class A
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 ........ 16.28 (.14)(b) 3.01 2.87 0.00 0.00 0.00 0.00
Year ended 7/31/04 ........ 15.58 (.15)(f) .85 .70 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+ ....... 15.07 (.10) .61 .51 0.00 0.00 0.00 0.00
Year ended 11/30/02 ....... 20.24 (.19) (4.98) (5.17) 0.00 0.00 0.00 0.00
Year ended 11/30/01 ....... 29.51 (.19) (6.43) (6.62) 0.00 0.00 0.00 (2.38)
Class R
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 ........ 16.25 (.17)(b) 3.02 2.85 0.00 0.00 0.00 0.00
11/03/03+++ to 7/31/04 .... 16.59 (.20)(f) (.14) (.34) 0.00 0.00 0.00 0.00
Class K
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 17.63 (.04) 1.60 1.56 0.00 0.00 0.00 0.00
Class I
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 17.63 (.02) 1.59 1.57 0.00 0.00 0.00 0.00
AllianceBernstein
Growth Fund
Class A
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 ........ 29.05 (.32) 6.94 6.62 0.00 0.00 0.00 0.00
Year ended 7/31/04 ........ 26.18 (.31)(f) 3.18 2.87 0.00 0.00 0.00 0.00
11/1/02 to 7/31/03+ ....... 22.56 (.21) 3.83 3.62 0.00 0.00 0.00 0.00
Year ended 10/31/02 ....... 27.40 (.28) (4.56) (4.84) 0.00 0.00 0.00 0.00
Year ended 10/31/01 ....... 52.42 (.22) (19.10) (19.32) 0.00 0.00 0.00 (5.70)
Class R
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
3/1/05+++ to 7/31/05 ...... 32.88 (.11) 2.92 2.81 0.00 0.00 0.00 0.00
Class K
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 32.88 (.08) 2.92 2.84 0.00 0.00 0.00 0.00
Class I
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 32.88 (.05) 2.93 2.88 0.00 0.00 0.00 0.00
AllianceBernstein
Mid-Cap Growth Fund
Class A
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 ........ 5.38 (.05) 1.12 1.07 0.00 0.00 0.00 0.00
Year ended 7/31/04 ........ 4.46 (.06)(f) .98 .92 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+ ....... 3.70 (.03) .79 .76 0.00 0.00 0.00 0.00
Year ended 11/30/02 ....... 4.79 (.04) (1.05) (1.09) 0.00 0.00 0.00 0.00
Year ended 11/30/01 ....... 5.83 (.04) (.71) (.75) 0.00 0.00 0.00 (.29)
Class R
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
3/1/05+++ to 7/31/05 ...... 6.05 (.02) .42 .40 0.00 0.00 0.00 0.00
Class K
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 6.05 (.01) .41 .40 0.00 0.00 0.00 0.00
Class I
Year ended 7/31/06 ........ $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 ..... 6.05 (.01) .42 .41 0.00 0.00 0.00 0.00
----------
Please refer to the footnotes on pages [__] and [__].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
---------------------- ------------------------------------------------------
Distri- Total Net Assets Ratio of
butions Dividends Net Asset End of Ratio of Net Income
in Excess and Value, Period Expenses (Loss) Portfolio
Capital of Distri- End of Total (000's to Average to Average Turnover
Fiscal Year or Period Gains butions Period Return (c) omitted) Net Assets Net Assets Rate
--------------------- ---------- ---------- ---------- ---------- --------- ----------- ---------- ----------
AllianceBernstein Large
Cap Growth Fund
Class A
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 7/31/05 ...... 0.00 0.00 19.15 17.63 1,348,678 1.50(d) (.82)(b) 56
Year ended 7/31/04 ...... 0.00 0.00 16.28 4.49 1,550,292 1.58(d) (.90)(f) 61
12/1/02 to 7/31/03+ ..... 0.00 0.00 15.58 3.38 1,757,243 1.89* (1.08)* 60
Year ended 11/30/02 ..... 0.00 0.00 15.07 (25.54) 2,098,623 1.73 (1.09) 93
Year ended 11/30/01 ..... (.27) (2.65) 20.24 (24.90) 3,556,040 1.53 (.83) 135
Class R
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 7/31/05 ...... 0.00 0.00 19.10 17.54 107 1.59(d) (.90)(b) 56
11/03/03+++ to 7/31/04 .. 0.00 0.00 16.25 (2.05) 10 1.70*(d) (1.08)*f 61
Class K .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 ... 0.00 0.00 19.19 8.85 11 1.03* (.48)* 56
Class I .................
Year ended 7/31/06 $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 0.00 0.00 19.20 8.90 11 .83* (.27)* 56
AllianceBernstein
Growth Fund
Class A .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 7/31/05 ...... 0.00 0.00 35.67 22.79 1,081,725 1.49 (1.02) 41
Year ended 7/31/04 ...... 0.00 0.00 29.05 10.96 951,903 1.51(d) (1.05)(f) 53
11/1/02 to 7/31/03+ ..... 0.00 0.00 26.18 16.05 835,657 1.66* (1.18)* 29
Year ended 10/31/02 ..... 0.00 0.00 22.56 (17.66) 715,438 1.49 (1.04) 41
Year ended 10/31/01 0.00 (5.70) 27.40 (40.50) 874,604 1.28 (.61) 115
Class R .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
3/1/05+++ to 7/31/05 .... 0.00 0.00 35.69 8.55 32 1.41 (.89) 41
Class K .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 ... 0.00 0.00 35.72 8.64 11 1.09 (.62) 41
Class I
Year ended 7/31/06 $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 0.00 0.00 35.76 8.76 11 .86 (.39) 41
AllianceBernstein
Mid-Cap Growth Fund .....
Class A .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 7/31/05 ...... 0.00 0.00 6.45 19.89 653,612 1.25 (.88) 88
Year ended 7/31/04 ...... 0.00 0.00 5.38 20.63 610,854 1.25(d) (1.06)(f) 135
12/1/02 to 7/31/03+ ..... 0.00 0.00 4.46 20.54 540,843 1.45* (1.11)* 75
Year ended 11/30/02 0.00 0.00 3.70 (22.76) 469,570 1.34 (1.03) 183
Year ended 11/30/01 ..... 0.00 (.29) 4.79 (13.64) 686,445 1.22 (.69) 226
Class R .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
3/1/05+++ to 7/31/05 .... 0.00 0.00 6.45 6.61 11 1.42 (.86) 88
Class K .................
Year ended 7/31/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 0.00 0.00 6.45 6.61 11 1.14 (.58) 88
Class I
Year ended 7/31/06 $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 0.00 0.00 6.46 6.78 11 .92 (.35) 88
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
---------------------------------------- ---------------------------------------------
Net Gains
or Losses
on Distri-
Investments butions Distri-
Net Asset Net (both Dividends in Excess Tax butions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------------- -------- ----------- ----------- ---------- ---------- ---------- -------- --------
AllianceBernstein
Small Cap Growth
Portfolio
Class A
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 .... 19.70 (.30)(b) 4.45 4.15 0.00 0.00 0.00 0.00
Year ended 7/31/04 .... 17.30 (.33)(b) 2.73 2.40 0.00 0.00 0.00 0.00
10/1/02 to 7/31/03+ ... 13.34 (.24) 4.20 3.96 0.00 0.00 0.00 0.00
Year ended 9/30/02 .... 16.25 (.30) (2.61) (2.91) 0.00 0.00 0.00 0.00
Year ended 9/30/01 .... 30.76 (.35) (11.46) (11.81) 0.00 0.00 0.00 (.72)
Class R
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
3/1/05+++ to 7/31/05 .. 22.88 (.12) 1.10 .98 0.00 0.00 0.00 0.00
Class K
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 . 22.88 (.10) 1.11 1.01 0.00 0.00 0.00 0.00
Class I
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 . 22.88 (.06) 1.09 1.03 0.00 0.00 0.00 0.00
AllianceBernstein
Global Technology Fund
Class A
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 .... 49.14 (.34)(b) 7.76 7.42 0.00 0.00 0.00 0.00
Year ended 7/31/04 .... 47.44 (.72)(b) 2.42 1.70 0.00 0.00 0.00 0.00
12/1/02 to 7/31/03+ ... 43.48 (.54) 4.50 3.96 0.00 0.00 0.00 0.00
Year ended 11/30/02 ... 67.05 (.87) (22.70) (23.57) 0.00 0.00 0.00 0.00
Year ended 11/30/01 ... 95.32 (.82) (21.17) (21.99) 0.00 0.00 0.00 (5.86)
Class R
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 7/31/05 .... 49.08 (.38)(b) 7.74 7.36 0.00 0.00 0.00 0.00
11/03/03+++ to 7/31/04 54.17 (.77)(b) (4.32) (5.09) 0.00 0.00 0.00 0.00
Class K
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 . 54.19 (.03) 2.54 2.51 0.00 0.00 0.00 0.00
Class I
Year ended 7/31/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 7/31/05 . 54.19 .02 2.55 2.57 0.00 0.00 0.00 0.00
AllianceBernstein
Global Health Care Fund
Class A
Year ended 6/30/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 6/30/05 .... 11.63 (.13)(b) .89 .76 0.00 0.00 0.00 0.00
Year ended 6/30/04 .... 10.37 (.12)(f) 1.38 1.26 0.00 0.00 0.00 0.00
Year ended 6/30/03 .... 9.86 (.10) .61 .51 0.00 0.00 0.00 0.00
Year ended 6/30/02 .... 11.20 (.12) (1.22) (1.34) 0.00 0.00 0.00 0.00
Class R
Year ended 6/30/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
3/1/05+++ to 6/30/05 .. 11.54 (.02) .87 .85 0.00 0.00 0.00 0.00
Class K
Year ended 6/30/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 . 11.54 (.01) .87 .86 0.00 0.00 0.00 0.00
Class I
Year ended 6/30/06 .... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 . 11.54 0.00(g) .87 .87 0.00 0.00 0.00 0.00
----------
Please refer to the footnotes on pages [__] and [__].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
---------------------- ------------------------------------------------------
Distri- Total Net Assets Ratio of
butions Dividends Net Asset End of Ratio of Net Income
in Excess and Value, Period Expenses (Loss) Portfolio
Capital of Distri- End of Total (000's to Average to Average Turnover
Fiscal Year or Period Gains butions Period Return (b) omitted) Net Assets Net Assets Rate
--------------------- ---------- ---------- ---------- ---------- --------- ----------- ---------- ----------
AllianceBernstein
Small Cap Growth
Portfolio
Class A
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
Year ended 7/31/05 .... 0.00 0.00 23.85 21.07 207,873 1.60(d) (1.37)(b) 82
Year ended 7/31/04 .... 0.00 0.00 19.70 13.87 185,906 1.85(d) (1.67)(b) 94
10/1/02 to 7/31/03+ ... 0.00 0.00 17.30 29.69 184,378 2.32* (1.95)* 94
Year ended 9/30/02 .... 0.00 0.00 13.34 (17.91) 156,340 1.92 (1.71) 98
Year ended 9/30/01 .... (1.98) (2.70) 16.25 (41.42) 232,456 1.79 (1.58) 109
Class R
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
3/1/05+++ to 7/31/05 .. 0.00 0.00 23.86 4.28 11 1.56* (1.37)(b) 82
Class K
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 . 0.00 0.00 23.89 4.41 11 1.29* (1.09)* 82
Class I
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 . 0.00 0.00 23.91 4.50 19,981 1.36* (1.16)* 82
AllianceBernstein
Global Technology Fund
Class A
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
Year ended 7/31/05 .... 0.00 0.00 56.56 15.10 1,067,072 1.66(d) (.65)(b) 80
Year ended 7/31/04 .... 0.00 0.00 49.14 3.58 1,112,174 1.65(d) (1.36)(b) 80
12/1/02 to 7/31/03+ ... 0.00 0.00 47.44 9.11 1,186,488 2.24* (1.95)* 127
Year ended 11/30/02 ... 0.00 0.00 43.48 (35.15) 1,096,744 1.85 (1.64) 117
Year ended 11/30/01 ... (.42) (6.28) 67.05 (24.90) 1,926,473 1.58 (1.08) 55
Class R
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
Year ended 7/31/05 .... 0.00 0.00 56.44 15.00 74 1.71(d) (.70)(b) 80
11/03/03+++ to 7/31/04 0.00 0.00 49.08 (9.40) 23 1.73*(d) (1.42)*(b) 80
Class K
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 . 0.00 0.00 56.70 4.63 11 1.05* (.15)* 80
Class I
Year ended 7/31/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 7/31/05 . 0.00 0.00 56.76 4.75 10 .81* .10* 80
AllianceBernstein
Global Health Care Fund
Class A
Year ended 6/30/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
Year ended 6/30/05 .... 0.00 0.00 12.39 6.54 46,505 1.80(d) (1.10)(b) 30
Year ended 6/30/04 .... 0.00 0.00 11.63 12.15 55,079 1.82(d) (1.07)(f) 34
Year ended 6/30/03 .... 0.00 0.00 10.37 5.17 56,077 2.06 (1.12) 8
Year ended 6/30/02 .... 0.00 0.00 9.86 (11.96) 63,973 1.85 (1.13) 9
Class R
Year ended 6/30/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
3/1/05+++ to 6/30/05 .. 0.00 0.00 12.39 7.37 11 1.70* (.48)* 30
Class K
Year ended 6/30/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 . 0.00 0.00 12.40 7.45 11 1.44* (.22)* 30
Class I
Year ended 6/30/06 .... $[_____] $[_____] $[_____] [_____]% $[________] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 . 0.00 0.00 12.41 7.54 11 1.16* .06* 30
[Enlarge/Download Table]
Income from Investment Operations Less Dividends and Distributions
---------------------------------------- ---------------------------------------------
Net Gains
or Losses
on Distri-
Investments butions Distri-
Net Asset Net (both Dividends in Excess Tax butions
Value, Investment realized Total from from Net of Net Return from
Beginning Income and Investment Investment Investment of Capital
Fiscal Year or Period of Period (Loss)(a) unrealized) Operations Income Income Capital Gains
--------------------------- -------- ----------- ----------- ---------- ---------- ---------- -------- --------
AllianceBernstein Global
Research Growth
Fund
Class A
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 6/30/05 ...... 13.23 (.02)(b) 1.35 1.33 0.00(g) 0.00 0.00 (.09)
Year ended 6/30/04 ...... 11.33 (.01)(f) 2.68 2.67 (.01) 0.00 0.00 (.76)
7/22/02++ to 6/30/03 .... 10.00 (.01)(f) 1.34 1.33 0.00 0.00 0.00 0.00
Class R
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
9/1/04+++ to 6/30/05 .... 12.72 (.04)(b) 1.85 1.81 0.00 0.00 0.00 0.09
Class K
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 ... 14.52 .03(b) (.08) (.05) 0.00 0.00 0.00 0.00
Class I
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 ... 14.52 .04(b) (.08) (.04) 0.00 0.00 0.00 0.00
AllianceBernstein
International Growth Fund
Class A
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
Year ended 6/30/05 ...... 11.15 .15(b) 2.46 2.61 (0.04) 0.00 0.00 0.00
Year ended 6/30/04 ...... 8.38 .05(f) 2.76 2.81 (0.04) 0.00 0.00 0.00
Year ended 6/30/03 ...... 8.19 .02 .17 .19 0.00 0.00 0.00 0.00
Year ended 6/30/02 ...... 8.76 (.03) (.54) (.57) 0.00 0.00 0.00 0.00
Class R
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
3/1/05+++ to 6/30/05 .... 14.08 .12 (.48) (.36) 0.00 0.00 0.00 0.00
Class K
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 ... 14.08 .13 (.48) (.35) 0.00 0.00 0.00 0.00
Class I
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____] $[_____]
03/1/05+++ to 6/30/05 ... 14.08 .14 (.48) (.34) 0.00 0.00 0.00 0.00
Please refer to the footnotes on pages [__] and [__].
[Enlarge/Download Table]
Less Distributions Ratios/Supplemental Data
---------------------- ------------------------------------------------------
Distri- Total Net Assets Ratio of
butions Dividends Net Asset End of Ratio of Net Income
in Excess and Value, Period Expenses (Loss) Portfolio
Capital of Distri- End of Total (000's to Average to Average Turnover
Fiscal Year or Period Gains butions Period Return (b) omitted) Net Assets Net Assets Rate
--------------------- ---------- ---------- ---------- ---------- --------- ----------- ---------- ----------
AllianceBernstein Global
Research Growth
Fund
Class A
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 6/30/05 ...... 0.00 (.09) 14.47 10.06 33,944 1.50(d) (.15)(b) 66
Year ended 6/30/04 ...... 0.00 (.77) 13.23 23.86 20,562 1.50(d) (.16)(f) 85
7/22/02++ to 6/30/03 .... 0.00 0.00 11.33 13.30 1 1.70*(d) (.70)*(f) 62
Class R
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
9/1/04+++ to 6/30/05 .... 0.00 (.09) 14.44 14.22 6 1.70(d) (.31)(b) 66
Class K
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 ... 0.00 0.00 14.47 (.34) 10 1.45(d) .54(b) 66
Class I
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 ... 0.00 0.00 14.48 (.28) 10 1.20(d) .79(b) 66
AllianceBernstein
International Growth Fund
Class A
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
Year ended 6/30/05 ...... 0.00 (.04) 13.72 23.44 310,073 1.57(d) 1.17(b) 47
Year ended 6/30/04 ...... 0.00 (.04) 11.15 33.57 202,899 1.89(d) .49(f) 50
Year ended 6/30/03 ...... 0.00 0.00 8.38 2.32 163,406 2.29 .23 29
Year ended 6/30/02 ...... 0.00 0.00 8.19 (6.51) 183,160 2.10 (.40) 43
Class R
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
3/1/05+++ to 6/30/05 .... 0.00 0.00 13.72 (2.56) 10 1.58* 2.59* 47
Class K
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 ... 0.00 0.00 13.73 (2.49) 10 1.32* 2.85* 47
Class I
Year ended 6/30/06 ...... $[_____] $[_____] $[_____] [_____]% $[_______] [_____]% [_____]% [_____]%
03/1/05+++ to 6/30/05 ... 0.00 0.00 13.74 (2.41) 10 1.04* 3.13* 47
+ Change in fiscal year end.
++ Commencement of operations.
+++ Commencement of distributions.
* Annualized.
(a) Based on average shares outstanding.
(b) Net of expenses waived and reimbursed by the Adviser.
(c) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at the net asset value during the period, and a
redemption on the last day of the period. Initial sales charges or
contingent deferred sales charges are not reflected in the calculation of
total investment return. Total return does not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption
of fund shares. Total investment returns calculated for periods of less
than one year are not annualized.
(d) Net of expenses assumed and/or waived/reimbursed. If the following Funds
had borne all expenses in their most recent five fiscal years, their
expense ratios[, without giving effect to the expense offset arrangement
described in (e) below,] would have been as follows:
[Download Table]
2001 2002 2003 2004 2005 2006
------ ------ ------ ------ ------ ---------
AllianceBernstein Large Cap
Growth Fund
Class A ..................... -- -- -- 1.76% 1.53% [_______]%
Class R ..................... -- -- -- 1.95% 1.62% [_______]%
Class K ..................... -- -- -- -- 1.03%* [_______]%
Class I ..................... -- -- -- -- .83%* [_______]%
AllianceBernstein Growth Fund
Class A ..................... -- -- -- 1.52% -- [_______]%
Class R ..................... -- -- -- -- -- [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
AllianceBernstein
Mid-Cap Growth Fund
Class A ..................... -- -- -- 1.26% -- [_______]%
Class R ..................... -- -- -- -- -- [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
AllianceBernstein Small Cap
Growth Portfolio
Class A ..................... -- -- -- 2.01% 1.63% [_______]%
Class R ..................... -- -- -- -- -- [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
AllianceBernstein Global
Technology Fund
Class A ..................... -- -- -- 1.81% 1.68% [_______]%
Class R ..................... -- -- -- 1.97%* 1.74% [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
AllianceBernstein Global
Health Care Fund
Class A ..................... -- -- -- 1.93% 1.84% [_______]%
Class R ..................... -- -- -- -- -- [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
AllianceBernstein Global
Research Growth Fund
Class A ..................... -- -- 19.19%* 7.68% 2.51% [_______]%
Class R ..................... -- -- -- -- 2.76%* [_______]%
Class K ..................... -- -- -- -- 3.10%* [_______]%
Class I ..................... -- -- -- -- 2.85%* [_______]%
AllianceBernstein
International Growth Fund
Class A ..................... -- -- -- 2.04% -- [_______]%
Class R ..................... -- -- -- -- -- [_______]%
Class K ..................... -- -- -- -- -- [_______]%
Class I ..................... -- -- -- -- -- [_______]%
(e) [Amounts do not reflect the impact of expense offset arrangements with the
transfer agent. Taking into account such expense offset arrangements, the
ratio of expenses to average net assets, assuming the assumption and/or
waiver/reimbursement of expenses described in (d) above, would have been as
follows:]
[Fund name] 2006
----------
Class A [_______]%
Class R [_______]%
Class K [_______]%
Class I [_______]%
(f) Net of fees and expenses waived/reimbursed by the Adviser and the Transfer
Agent.
(g) Amount is less than $.005.
APPENDIX A - HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION
The settlement agreement between the Adviser and the NYAG requires the Funds to
include the following supplemental hypothetical investment information that
provides additional information calculated and presented in a manner different
from expense information found under "Fees and Expenses of the Funds" in this
Prospectus about the effect of a Fund's expenses, including investment advisory
fees and other Fund costs, on the Fund's returns over a 10-year period. The
chart shows the estimated expenses (net of any fee or expense waiver for the
first year) that would be charged on a hypothetical investment of $10,000 in
Class A shares of the Fund assuming a 5% return each year. Except as otherwise
indicated, the chart also assumes that the current annual expense ratio stays
the same throughout the 10-year period. The current annual expense ratio for
each Fund is the same as stated under "Fees and Expenses of the Funds." If you
wish to obtain hypothetical investment information for other classes of shares
of the Fund, please refer to the "Mutual Fund Fees and Expenses Calculators" on
www.AllianceBernstein.com. Your actual expenses may be higher or lower.
[Download Table]
AllianceBernstein Large Cap Growth Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Growth Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Mid-Cap Growth Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Small Cap Growth Portfolio
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Global Technology Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Global Health Care Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein Global Research Growth Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses** Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
[Download Table]
AllianceBernstein International Growth Fund
-----------------------------------------------------------------------------------
Hypothetical Investment Hypothetical
Hypothetical Performance After Hypothetical Ending
Year Investment Earnings Returns Expenses Investment
---------- ------------ ------------ ---------- ------------ ------------
1* $10,000.00 $[_________] $[_______] $[_________] $[_________]
2 [__________] [_________] [_______] [_________] [_________]
3 [__________] [_________] [_______] [_________] [_________]
4 [__________] [_________] [_______] [_________] [_________]
5 [__________] [_________] [_______] [_________] [_________]
6 [__________] [_________] [_______] [_________] [_________]
7 [__________] [_________] [_______] [_________] [_________]
8 [__________] [_________] [_______] [_________] [_________]
9 [__________] [_________] [_______] [_________] [_________]
10 [__________] [_________] [_______] [_________] [_________]
-----------------------------------------------------------------------------------
Cumulative $[_________] $[_________]
----------
* If the Hypothetical Investment was fully redeemed during this year, a 1%
CDSC would reduce the ending value by $100.00.
** Expenses are net of any fee waiver or expense waiver for the first year.
Thereafter, the expense ratio reflects the Fund's operating expenses as
reflected under "Fees and Expenses of the Funds" before waiver.
For more information about the Funds, the following documents are available upon
request:
o ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The Funds' annual and semi-annual reports to shareholders contain additional
information on the Funds' investments. In the annual report, you will find a
discussion of the market conditions and investment strategies that significantly
affected a Fund's performance during its last fiscal year.
o STATEMENT OF ADDITONAL INFORMATION (SAI)
Each Fund has an SAI, which contains more detailed information about the Fund,
including its operations and investment policies. The Funds' SAIs and the
independent registered public accounting firm's report and financial statements
in each Fund's most recent annual report to shareholders are incorporated by
reference into (and are legally part of) this Prospectus.
You may request a free copy of the current annual/semi-annual report or the SAI,
or make inquiries concerning the Funds, by contacting your broker or other
financial intermediary, or by contacting the Adviser:
By Mail: AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By Phone: For Information: (800) 221-5672
For Literature: (800) 227-4618
Or you may view or obtain these documents from the Commission:
o Call the Commission at 1-202-551-8090 for information on the operation
of the Public Reference Room.
o Reports and other information about the Fund are available on the
EDGAR Database on the Commission's Internet site at http://www.sec.gov
o Copies of the information may be obtained, after paying a duplicating
fee, by electronic request at publicinfo@sec.gov, or by writing the
Commission's Public Reference Section, Washington DC 20549-0102
On the Internet: www.sec.gov
You also may find these documents and more information about the Adviser and the
Funds on the Internet at: www.alliancebernstein.com.
AllianceBernstein(R) and the AB Logo are registered trademarks and service marks
used by permission of the owner, AllianceBernstein L.P.
Fund SEC File No.
---- ------------
AllianceBernstein Large Cap Growth Fund 811-06730
AllianceBernstein Growth Fund 811-05088
AllianceBernstein Mid-Cap Growth Fund 811-00204
AllianceBernstein Small Cap Growth Portfolio 811-01716
AllianceBernstein Global Technology Fund 811-03131
AllianceBernstein Global Health Care Fund 811-09329
AllianceBernstein Global Research Growth 811-21064
Fund AllianceBernstein International Growth Fund 811-08426
--------------------------------------------------------------------------------
Privacy Notice (This information is not part of the Prospectus.)
AllianceBernstein L.P., the AllianceBernstein Family of Funds and
AllianceBernstein Investments, Inc. (collectively, "AllianceBernstein" or "we")
understand the importance of maintaining the confidentiality of our clients'
nonpublic personal information. Nonpublic personal information is personally
identifiable financial information about our clients who are natural persons. To
provide financial products and services to our clients, we may collect
information about clients from sources, including: (1) account documentation,
including applications or other forms, which may contain information such as a
client's name, address, phone number, social security number, assets, income and
other household information, (2) clients' transactions with us and others, such
as account balances and transactions history, and (3) information from visitors
to our websites provided through online forms, site visitorship data and online
information collecting devices known as "cookies".
It is our policy not to disclose nonpublic personal information about our
clients (or former clients) except to our affiliates, or to others as permitted
or required by law. From time to time, AllianceBernstein may disclose nonpublic
personal information that we collect about our clients (or former clients) to
non-affiliated third parties, including those that perform processing or
servicing functions and those that provide marketing services for us or on our
behalf under a joint marketing agreement that requires the third party provider
to adhere to AllianceBernstein's privacy policy. We have policies and procedures
to safeguard nonpublic personal information about our clients (and former
clients) that include restricting access to such nonpublic personal information
and maintaining physical, electronic and procedural safeguards, that comply with
applicable standards, to safeguard such nonpublic personal information.
--------------------------------------------------------------------------------
SK 00250 0157 687412 v4
[LOGO] ALLIANCEBERNSTEIN GLOBAL RESEARCH GROWTH FUND, INC.
-------------------------------------------------------------------------------
c/o AllianceBernstein Investor Services, Inc.
P.O. Box 786003, San Antonio, Texas 78278-6003
Toll Free: (800) 221-5672
For Literature: Toll Free (800) 227-4618
-------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
November 1, 2006
-------------------------------------------------------------------------------
This Statement of Additional Information ("SAI") is not a prospectus
but supplements and should be read in conjunction with the current prospectus,
dated November 1, 2006, of AllianceBernstein(R) Global Research Growth Fund,
Inc. (the "Fund") that offers Class A, Class B, Class C and Advisor Class shares
of the Fund and the current prospectus, dated November 1, 2006, that offers
Class A, Class R, Class K and Class I shares of the Fund (each a "Prospectus"
and together, the "Prospectuses"). Financial statements for the year ended June
30, 2006 are included in the annual report to shareholders and are incorporated
into this SAI by reference. Copies of the Prospectuses and annual report may be
obtained by contacting AllianceBernstein Investor Services, Inc. ("ABIS") at the
address or the "For Literature" telephone number shown above.
TABLE OF CONTENTS
PAGE
Description of the Fund........................................................
Management of the Fund.........................................................
Expenses of the Fund...........................................................
Purchase of Shares.............................................................
Redemption and Repurchase of Shares............................................
Shareholder Services...........................................................
Net Asset Value................................................................
Dividends, Distributions and Taxes.............................................
Portfolio Transactions.........................................................
General Information............................................................
Financial Statements and Report of Independent
Registered Public Accounting Firm..........................................
Appendix A: Statement of Policies and Procedures for Voting Proxies........A-1
------------------------
AllianceBernstein(R) and the AB Logo are registered trademarks and service marks
used by permission of the owner, AllianceBernstein L.P.
-------------------------------------------------------------------------------
DESCRIPTION OF THE FUND
-------------------------------------------------------------------------------
The Fund is an open-end investment company. Except as otherwise
indicated, the investment objective and policies of the Fund are not
"fundamental policies" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act"), and may, therefore, be changed by the Board of
Directors without a shareholder vote. However, the Fund will not change its
investment objective without at least 60 days' prior written notice to
shareholders. There is no guarantee that the Fund will achieve its investment
objective. Whenever any investment policy or restriction states a percentage of
the Fund's assets which may be invested in any security or other asset, it is
intended that such percentage limitation be determined immediately after and as
a result of the Fund's acquisition of such securities or other assets.
Accordingly, any later increases or decreases in percentage beyond the specified
limitation resulting from a change in values or net assets will not be
considered a violation of this percentage limitation.
The term "net assets," as used in this SAI, means net assets plus any
borrowings.
Investment Objective
--------------------
The Fund's investment objective is long-term growth of capital.
How the Fund Pursues Its Objective
----------------------------------
Convertible Securities
----------------------
Convertible securities include bonds, debentures, corporate notes and
preferred stocks. Convertible securities are instruments that are convertible at
a stated exchange rate into common stock. Prior to their conversion, convertible
securities have the same general characteristics as non-convertible securities
that provide a stable stream of income with generally higher yields than those
of equity securities of the same or similar issuers. The market value of
convertible securities tends to decrease as interest rates rise and, conversely,
to increase as interest rates decline. While convertible securities generally
offer lower interest yields than non-convertible debt securities of similar
quality, they offer investors the potential from increases in the market price
of the underlying common stock. Convertible debt securities that are rated Baa3
or lower by Moody's or BBB- or lower by S&P, or Fitch and comparable unrated
securities as determined by the Adviser may share some or all of the risk of
non-convertible debt securities with those ratings.
When the market price of the common stock underlying a convertible
security increases, the price of the convertible security increasingly reflects
the value of the underlying common stock and may rise accordingly. As the market
price of the underlying common stock declines, the convertible security tends to
trade increasingly on a yield basis, and thus may not depreciate to the same
extent as the underlying common stock. Convertible securities rank senior to
common stocks in an issuer's capital structure. They are consequently of higher
quality and entail less risk than the issuer's common stock, although the extent
to which such risk is reduced depends in large measure upon the degree to which
the convertible security sells above its value as a fixed-income security.
Depositary Receipts
-------------------
In addition to purchasing corporate securities of non-U.S. issuers in
overseas securities markets, the Fund may invest in American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts
("GDRs") or other securities representing securities of companies based in
countries other than the United States. Transactions in these securities may not
necessarily be settled in the same currency as transactions in the securities
into which they represent. Generally, ADRs, in registered form, are designed for
use in the U.S. securities markets, EDRs, in bearer form, are designed for use
in European securities markets and GDRs, in bearer form, are designed for use in
two or more securities markets, such as Europe and Asia.
Derivatives
-----------
The Fund may, but is not required to, use derivatives for risk
management purposes or as part of its investment practices. Derivatives are
financial contracts whose value depends on, or is derived from, the value of an
underlying asset, reference rate or index. These assets, rates, and indices may
include bonds, stocks, mortgages, commodities, interest rates, currency exchange
rates, bond indices and stock indices. Derivatives may be (i) standardized,
exchange-traded contracts or (ii) customized, privately-negotiated contracts.
Exchange-traded derivatives tend to be more liquid and subject to less credit
risk than those that are privately negotiated. The Fund may use derivatives to
earn income and enhance returns, to hedge or adjust the risk profile of a
portfolio and either to replace more traditional direct investments or to obtain
exposure to otherwise inaccessible markets.
The four principal types of derivatives, which include options,
futures, forwards and swaps, as well as the methods in which they may be used by
the Fund are described below.
Options. An option, which may be standardized and exchange-traded, or
customized and privately negotiated, is an agreement that, for a premium payment
or fee, gives the option holder (the buyer) the right but not the obligation to
buy or sell the underlying asset (or settle for cash an amount based on an
underlying asset, rate or index) at a specified price (the exercise price)
during a period of time or on a specified date. A call option entitles the
holder to purchase, and a put option entitles the holder to sell, the underlying
asset (or settle for cash an amount based on an underlying asset, rate or
index). Likewise, when an option is exercised the writer of the option is
obligated to sell (in the case of a call option) or to purchase (in the case of
a put option) the underlying asset (or settle for cash an amount based on an
underlying asset, rate or index). Investments in options are considered
speculative. The Fund may lose the premium paid for them if the price of the
underlying security or other asset decreased or remained the same (in the case
of a call option) or increased or remained the same (in the case of a put
option). If a put or call option purchased by the Fund were permitted to expire
without being sold or exercised, its premium would represent a loss to the Fund.
Futures. A futures contract is an agreement that obligates the buyer
to buy and the seller to sell a specified quantity of an underlying asset (or
settle for cash the value of a contract based on an underlying asset, rate or
index) at a specific price on the contract maturity date. Futures contracts are
standardized, exchange-traded instruments and are fungible (i.e., considered to
be perfect substitutes for each other). This fungibility allows futures
contracts to be readily offset or cancelled through the acquisition of equal but
opposite positions, which is the primary method in which futures contracts are
liquidated. A cash-settled futures contract does not require physical delivery
of the underlying asset but instead is settled for cash equal to the difference
between the values of the contract on the date it is entered into and its
maturity date.
Forward Contracts. A forward contract is a customized, privately
negotiated agreement for one party to buy, and the other party to sell, a
specific quantity of an underlying commodity or other tangible asset for an
agreed-upon price at a future date. A forward contract generally is settled by
physical delivery of the commodity or other tangible asset underlying the
forward contract to an agreed upon location at a future date (rather than
settled by cash) or will be rolled forward into a new forward contract.
Non-deliverable forwards ("NDFs") specify a cash payment upon maturity. NDFs are
normally used when the market for physical settlement of the currency is
underdeveloped, heavily regulated or highly taxed.
Swaps. A swap is a customized, privately negotiated agreement that
obligates two parties to exchange a series of cash flows at specified intervals
(payment dates) based upon or calculated by reference to changes in specified
prices or rates (interest rates in the case of interest rate swaps, currency
exchange rates in the case of currency swaps) for a specified amount of an
underlying asset (the "notional" principal amount). The payment flows are netted
against each other, with the difference being paid by one party to the other.
Except for currency swaps, the notional principal amount is used solely to
calculate the payment streams but is not exchanged. With respect to currency
swaps, actual principal amounts of currencies may be exchanged by the
counterparties at the initiation, and again upon the termination, of the
transaction. Swap transactions also include credit default swaps in which one
party pays a periodic fee, typically expressed in basis points on a notational
amount, in return for a contingent payment by the counterparty following a
credit event in a specific debt obligation or obligations. A credit event is
typically a default and the contingent payment may be a cash settlement or by
physical delivery of the reference obligation in return for payment of its face
amount.
Risks of Derivatives. Investment techniques employing such derivatives
involve risks different from, and, in certain cases, greater than, the risks
presented by more traditional investments. Following is a general discussion of
important risk factors and issues concerning the use of derivatives that
investors should understand in considering the proposed amendment of the Fund's
investment policies.
-- Market Risk. This is the general risk attendant to all
investments that the value of a particular investment will change
in a way detrimental to the Fund's interest.
-- Management Risk. Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions. In particular, the use and complexity of
derivatives require the maintenance of adequate controls to
monitor the transactions entered into, the ability to assess the
risk that a derivative adds to the Fund's investment portfolio,
and the ability to forecast price, interest rate or currency
exchange rate movements correctly.
-- Credit Risk. This is the risk that a loss may be sustained by
the Fund as a result of the failure of another party to a
derivative (usually referred to as a "counterparty") to comply
with the terms of the derivative contract. The credit risk for
exchange-traded derivatives is generally less than for privately
negotiated derivatives, since the clearinghouse, which is the
issuer or counterparty to each exchange-traded derivative,
provides a guarantee of performance. This guarantee is supported
by a daily payment system (i.e., margin requirements) operated by
the clearinghouse in order to reduce overall credit risk. For
privately negotiated derivatives, there is no similar clearing
agency guarantee. Therefore, the Fund considers the
creditworthiness of each counterparty to a privately negotiated
derivative in evaluating potential credit risk.
-- Liquidity Risk. Liquidity risk exists when a particular
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous price.
-- Leverage Risk. Since many derivatives have a leverage
component, adverse changes in the value or level of the
underlying asset, rate or index can result in a loss
substantially greater than the amount invested in the derivative
itself. In the case of swaps, the risk of loss generally is
related to a notional principal amount, even if the parties have
not made any initial investment. Certain derivatives have the
potential for unlimited loss, regardless of the size of the
initial investment.
-- Other Risks. Other risks in using derivatives include the risk
of mispricing or improper valuation of derivatives and the
inability of derivatives to correlate perfectly with underlying
assets, rates and indices. Many derivatives, in particular
privately negotiated derivatives, are complex and often valued
subjectively. Improper valuations can result in increased cash
payment requirements to counterparties or a loss of value to the
Fund. Derivatives do not always perfectly or even highly
correlate or track the value of the assets, rates or indices they
are designed to closely track. Consequently, the Fund's use of
derivatives may not always be an effective means of, and
sometimes could be counterproductive to, furthering the Fund's
investment objective.
Use of Options, Futures, Forwards and Swaps by the Fund.
Options on Securities. The Fund may write and purchase call and put
options on securities. In purchasing an option on securities, the Fund would be
in a position to realize a gain if, during the option period, the price of the
underlying securities increased (in the case of a call) or decreased (in the
case of a put) by an amount in excess of the premium paid; otherwise the Fund
would experience a loss not greater than the premium paid for the option. Thus,
the Fund would realize a loss if the price of the underlying security declined
or remained the same (in the case of a call) or increased or remained the same
(in the case of a put) or otherwise did not increase (in the case of a put) or
decrease (in the case of a call) by more than the amount of the premium. If a
put or call option purchased by the Fund were permitted to expire without being
sold or exercised, its premium would represent a loss to the Fund.
The Fund may write a put or call option in return for a premium, which
is retained by the Fund whether or not the option is exercised. The Fund will
not write uncovered call or put options on securities. A call option written by
the Fund is "covered" if the Fund owns the underlying security, has an absolute
and immediate right to acquire that security upon conversion or exchange of
another security it holds, or holds a call option on the underlying security
with an exercise price equal to or less than of the call option it has written.
A put option written by the Fund is covered if the Fund holds a put option on
the underlying securities with an exercise price equal to or greater than of the
put option it has written.
The Fund may also write combinations of put and call options on the
same security, known as "straddles," with the same exercise and expiration date.
By writing a straddle, the Fund undertakes a simultaneous obligation to sell and
purchase the same security in the event that one of the options is exercised. If
the price of the security subsequently rises above the exercise price, the call
will likely be exercised and the Fund will be required to sell the underlying
security at or below market price. This loss may be offset, however, in whole or
part, by the premiums received on the writing of the two options. Conversely, if
the price of the security declines by a sufficient amount, the put will likely
be exercised. The writing of straddles will likely be effective, therefore, only
where the price of the security remains stable and neither the call nor the put
is exercised. In those instances where one of the options is exercised, the loss
on the purchase or sale of the underlying security may exceed the amount of the
premiums received.
By writing a call option, the Fund limits its opportunity to profit
from any increase in the market value of the underlying security above the
exercise price of the option. By writing a put option, the Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price above its then current market value, resulting in a capital loss unless
the security subsequently appreciates in value. Where options are written for
hedging purposes, such transactions constitute only a partial hedge against
declines in the value of portfolio securities or against increases in the value
of securities to be acquired, up to the amount of the premium. The Fund may
purchase put options to hedge against a decline in the value of portfolio
securities. If such decline occurs, the put options will permit the Fund to sell
the securities at the exercise price or to close out the options at a profit. By
using put options in this way, the Fund will reduce any profit it might
otherwise have realized on the underlying security by the amount of the premium
paid for the put option and by transaction costs.
The Fund may purchase call options to hedge against an increase in the
price of securities that the Fund anticipates purchasing in the future. If such
increase occurs, the call option will permit the Fund to purchase the securities
at the exercise price, or to close out the options at a profit. The premium paid
for the call option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise of the option, and, unless the price of the
underlying security rises sufficiently, the option may expire worthless to the
Fund and the Fund will suffer a loss on the transaction to the extent of the
premium paid.
The Fund may purchase or write options on securities of the types in
which it is permitted to invest in privately negotiated (i.e., over-the-counter)
transactions. The Fund will effect such transactions only with investment
dealers and other financial institutions (such as commercial banks or savings
and loan institutions) deemed creditworthy by the AllianceBernstein L.P. (the
"Adviser"), and the Adviser has adopted procedures for monitoring the
creditworthiness of such entities.
Options on Securities Indices. An option on a securities index is
similar to an option on a security except that, rather than taking or making
delivery of a security at a specified price, an option on a securities index
gives the holder the right to receive, upon exercise of the option, an amount of
cash if the closing level of the chosen index is greater than (in the case of a
call) or less than (in the case of a put) the exercise price of the option.
The Fund may write (sell) call and put options and purchase call and
put options on securities indexes.
If the Fund purchases put options on securities indexes to hedge its
investments against a decline in the value of portfolio securities, it will seek
to offset a decline in the value of securities it owns through appreciation of
the put option. If the value of the Fund's investments does not decline as
anticipated, or if the value of the option does not increase, the Fund's loss
will be limited to the premium paid for the option. The success of this strategy
will largely depend on the accuracy of the correlation between the changes in
value of the index and the changes in value of the Fund's security holdings.
The purchase of call options on securities indexes may be used by the
Fund to attempt to reduce the risk of missing a broad market advance, or an
advance in an industry or market segment, at a time when the Fund holds
uninvested cash or short-term debt securities awaiting investment. When
purchasing call options for this purpose, the Fund will also bear the risk of
losing all or a portion of the premium paid if the value of the index does not
rise. The purchase of call options on stock indexes when the Fund is
substantially fully invested is a form of leverage, up to the amount of the
premium and related transaction costs, and involves risks of loss and of
increased volatility similar to those involved in purchasing call options on
securities the Fund owns.
Options on Foreign Currencies. The Fund may purchase and write options
on foreign currencies for hedging purposes. For example, a decline in the dollar
value of a foreign currency in which portfolio securities are denominated will
reduce the dollar value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such diminutions in the
value of portfolio securities, the Fund may purchase put options on the foreign
currency. If the value of the currency does decline, the Fund will have the
right to sell such currency for a fixed amount in dollars and could thereby
offset, in whole or in part, the adverse effect on its portfolio which otherwise
would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, the Fund may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Fund from purchases of foreign currency options will
be reduced by the amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the direction or to the
extent anticipated, a Fund could sustain losses on transactions in foreign
currency options which would require it to forego a portion or all of the
benefits of advantageous changes in such rates.
The Fund may write options on foreign currencies for hedging purposes
or to increase return. For example, where the Fund anticipates a decline in the
dollar value of foreign-denominated securities due to adverse fluctuations in
exchange rates it could, instead of purchasing a put option, write a call option
on the relevant currency. If the expected decline occurs, the option will most
likely not be exercised, and the diminution in value of portfolio securities
could be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, the Fund
could write a put option on the relevant currency, which, if rates move in the
manner projected, will expire unexercised and allow the Fund to hedge such
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Fund will be required to purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the writing of
options on foreign currencies, the Fund also may be required to forego all or a
portion of the benefits which might otherwise have been obtained from favorable
movements in exchange rates.
Futures Contracts. Futures contracts that the Fund may buy and sell
may include futures contracts on fixed-income or other securities, and contracts
based on interest rates, foreign currencies or financial indices, including any
index of U.S. Government securities.
Interest rate futures contracts are purchased or sold for hedging
purposes to attempt to protect against the effects of interest rate changes on a
Fund's current or intended investments in fixed-income securities. For example,
if a Fund owned long-term bonds and interest rates were expected to increase,
that Fund might sell interest rate futures contracts. Such a sale would have
much the same effect as selling some of the long-term bonds in that Fund's
portfolio. However, since the futures market is more liquid than the cash
market, the use of interest rate futures contracts as a hedging technique allows
a Fund to hedge its interest rate risk without having to sell its portfolio
securities. If interest rates were to increase, the value of the debt securities
in the portfolio would decline, but the value of that Fund's interest rate
futures contracts would be expected to increase at approximately the same rate,
thereby keeping the net asset value of that Fund from declining as much as it
otherwise would have. On the other hand, if interest rates were expected to
decline, interest rate futures contracts could be purchased to hedge in
anticipation of subsequent purchases of long-term bonds at higher prices.
Because the fluctuations in the value of the interest rate futures contracts
should be similar to those of long-term bonds, a Fund could protect itself
against the effects of the anticipated rise in the value of long-term bonds
without actually buying them until the necessary cash becomes available or the
market has stabilized. At that time, the interest rate futures contracts could
be liquidated and that Fund's cash reserves could then be used to buy long-term
bonds on the cash market.
The Fund may purchase and sell foreign currency futures contracts for
hedging purposes in order to protect against fluctuations in currency exchange
rates. Such fluctuations could reduce the dollar value of portfolio securities
denominated in foreign currencies, or increase the cost of foreign-denominated
securities to be acquired, even if the value of such securities in the
currencies in which they are denominated remains constant. Each Fund may sell
futures contracts on a foreign currency, for example, when it holds securities
denominated in such currency and it anticipates a decline in the value of such
currency relative to the dollar. If such a decline were to occur, the resulting
adverse effect on the value of foreign-denominated securities may be offset, in
whole or in part, by gains on the futures contracts. However, if the value of
the foreign currency increases relative to the dollar, the Fund's loss on the
foreign currency futures contract may or may not be offset by an increase in the
value of the securities because a decline in the price of the security stated in
terms of the foreign currency may be greater than the increase in value as a
result of the change in exchange rates.
Conversely, the Fund could protect against a rise in the dollar cost
of foreign-denominated securities to be acquired by purchasing futures contracts
on the relevant currency, which could offset, in whole or in part, the increased
cost of such securities resulting from a rise in the dollar value of the
underlying currencies. When a Fund purchases futures contracts under such
circumstances, however, and the price in dollars of securities to be acquired
instead declines as a result of appreciation of the dollar, the Fund will
sustain losses on its futures position which could reduce or eliminate the
benefits of the reduced cost of portfolio securities to be acquired.
The Fund may also engage in currency "cross hedging" when, in the
opinion of the Adviser, the historical relationship among foreign currencies
suggests that a Fund may achieve protection against fluctuations in currency
exchange rates similar to that described above at a reduced cost through the use
of a futures contract relating to a currency other than the U.S. dollar or the
currency in which the foreign security is denominated. Such "cross hedging" is
subject to the same risks as those described above with respect to an
unanticipated increase or decline in the value of the subject currency relative
to the dollar.
Purchases or sales of stock or bond index futures contracts are used
for hedging purposes to attempt to protect a Fund's current or intended
investments from broad fluctuations in stock or bond prices. For example, a Fund
may sell stock or bond index futures contracts in anticipation of or during a
market decline to attempt to offset the decrease in market value of the Fund's
portfolio securities that might otherwise result. If such decline occurs, the
loss in value of portfolio securities may be offset, in whole or part, by gains
on the futures position. When a Fund is not fully invested in the securities
market and anticipates a significant market advance, it may purchase stock or
bond index futures contracts in order to gain rapid market exposure that may, in
whole or in part, offset increases in the cost of securities that the Fund
intends to purchase. As such purchases are made, the corresponding positions in
stock or bond index futures contracts will be closed out.
The Fund has claimed an exclusion from the definition of the term
"commodity pool operator" under the Commodity Exchange Act and therefore is not
subject to registration or regulation as a pool operator under that Act.
Options on Futures Contracts. Options on futures contracts are options
that call for the delivery of futures contracts upon exercise. Options on
futures contracts written or purchased by the Fund will be traded on U.S.
exchanges and, will be used only for hedging purposes.
The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities in the Fund's
portfolio. If the futures price at expiration of the option is below the
exercise price, a Fund will retain the full amount of the option premium, which
provides a partial hedge against any decline that may have occurred in the
Fund's portfolio holdings. The writing of a put option on a futures contract
constitutes a partial hedge against increasing prices of the securities or other
instruments required to be delivered under the terms of the futures contract. If
the futures price at expiration of the put option is higher than the exercise
price, a Fund will retain the full amount of the option premium, which provides
a partial hedge against any increase in the price of securities which the Fund
intends to purchase. If a put or call option a Fund has written is exercised,
the Fund will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the value of
its portfolio securities and changes in the value of its options on futures
positions, a Fund's losses from exercised options on futures may to some extent
be reduced or increased by changes in the value of portfolio securities.
The Fund may purchase options on futures contracts for hedging
purposes instead of purchasing or selling the underlying futures contracts. For
example, where a decrease in the value of portfolio securities is anticipated as
a result of a projected market-wide decline or changes in interest or exchange
rates, a Fund could, in lieu of selling futures contracts, purchase put options
thereon. In the event that such decrease were to occur, it may be offset, in
whole or part, by a profit on the option. If the anticipated market decline were
not to occur, the Fund will suffer a loss equal to the price of the put. Where
it is projected that the value of securities to be acquired by a Fund will
increase prior to acquisition due to a market advance or changes in interest or
exchange rates, a Fund could purchase call options on futures contracts, rather
than purchasing the underlying futures contracts. If the market advances, the
increased cost of securities to be purchased may be offset by a profit on the
call. However, if the market declines, the Fund will suffer a loss equal to the
price of the call, but the securities which the Fund intends to purchase may be
less expensive.
Forward Currency Exchange Contracts. A forward currency exchange
contract is an obligation by one party to buy, and the other party to sell, a
specific amount of a currency for an agreed upon price at a future date. Forward
currency exchange contracts are customized, privately negotiated agreements
designed to satisfy the objectives of each party. A forward currency exchange
contract usually results in the delivery of the underlying asset upon maturity
of the contract in return for the agreed upon payment. NDFs specify a cash
payment upon maturity. NDFs are normally used when the market for physical
settlement of the currency is underdeveloped, heavily regulated or highly taxed.
The Fund may enter into forward currency exchange contracts to attempt
to minimize the risk to the Fund from adverse changes in the relationship
between the U.S. dollar and foreign currencies. The Fund intends to enter into
forward currency exchange contracts for hedging purposes similar to those
described above in connection with its transactions in foreign currency futures
contracts. In particular, a forward currency exchange contract to sell a
currency may be entered into in lieu of the sale of a foreign currency futures
contract where the Fund seeks to protect against an anticipated increase in the
exchange rate for a specific currency which could reduce the dollar value of
portfolio securities denominated in such currency. Conversely, the Fund may
enter into a forward currency exchange contract to purchase a given currency to
protect against a projected increase in the dollar value of securities
denominated in such currency which the Fund intends to acquire. The Fund also
may enter into a forward currency exchange contract in order to assure itself of
a predetermined exchange rate in connection with a security denominated in a
foreign currency. The Fund may engage in currency "cross hedging" when, in the
opinion of the Adviser, the historical relationship among foreign currencies
suggests that the Fund may achieve the same protection for a foreign security at
a reduced cost through the use of a forward currency exchange contract relating
to a currency other than the U.S. dollar or the foreign currency in which the
security is denominated.
If a hedging transaction in forward currency exchange contracts is
successful, the decline in the value of portfolio securities or the increase in
the cost of securities to be acquired may be offset, at least in part, by
profits on the forward currency exchange contract. Nevertheless, by entering
into such forward currency exchange contracts, the Fund may be required to
forego all or a portion of the benefits which otherwise could have been obtained
from favorable movements in exchange rates.
The Fund has established procedures consistent with policies of the
Securities and Exchange Commission (the "Commission") concerning purchases of
foreign currency through forward currency exchange contracts. Accordingly, the
Fund will segregate and mark to market liquid assets in an amount at least equal
to the Fund's obligations under any forward currency exchange contracts.
Credit Default Swap Agreements. The "buyer" in a credit default swap
contract is obligated to pay the "seller" a periodic stream of payments over the
term of the contract in return for a contingent payment upon the occurrence of a
credit event with respect to an underlying reference obligation. Generally, a
credit event means bankruptcy, failure to pay, obligation acceleration or
modified restructuring. The Fund may be either the buyer or seller in the
transaction. As a seller, the Fund receives a fixed rate of income throughout
the term of the contract, which typically is between one month and ten years,
provided that no credit event occurs. If a credit event occurs, the Fund
typically must pay the contingent payment to the buyer, which is typically the
"par value" (full notional value) of the reference obligation. The contingent
payment may be a cash settlement or by physical delivery of the reference
obligation in return for payment of the face amount of the obligation. If the
Fund is a buyer and no credit event occurs, the Fund will lose its periodic
stream of payments over the term of the contract. However, if a credit event
occurs, the buyer typically receives full notional value for a reference
obligation that may have little or no value.
Credit default swaps may involve greater risks than if the Fund had
invested in the reference obligation directly. Credit default swaps are subject
to general market risk, liquidity risk and credit risk. As noted above, if the
Fund is a buyer and no credit event occurs, it will lose its periodic stream of
payments over the term of the contract. In addition, the value of the reference
obligation received by the Fund as a seller if a credit event occurs, coupled
with the periodic payments previously received, may be less than the full
notional value it pays to the buyer, resulting in a loss of value to the Fund.
The Fund will not enter into a credit default swap if the swap
provides for settlement by physical delivery and such delivery would result in
the Fund investing in securities rated below BBB- or Baa3 or not maintaining an
average aggregate credit rating of at least A-.
Currency Swaps. The Fund may enter into currency swaps for hedging
purposes. Currency swaps involve the exchange by the Fund with another party of
a series of payments in specified currencies. Since currency swaps are
individually negotiated, the Fund expects to achieve an acceptable degree of
correlation between its portfolio investments and its currency swaps positions.
A currency swap may involve the delivery at the end of the exchange period of a
substantial amount of one designated currency in exchange for the other
designated currency. Therefore the entire principal value of a currency swap is
subject to the risk that the other party to the swap will default on its
contractual delivery obligations. The net amount of the excess, if any, of the
Fund's obligations over its entitlements with respect to each currency swap will
be accrued on a daily basis and an amount of liquid assets having an aggregate
net asset value ("NAV") at least equal to the accrued excess will be maintained
in a segregated account by the Fund's custodian. The Fund will not enter into
any currency swap unless the credit quality of the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in the highest rating
category of at least one nationally recognized rating organization at the time
of entering into the transaction. If there is a default by the other party to
such a transaction, the Fund will have contractual remedies pursuant to the
agreements related to the transactions.
Interest Rate Transactions. The Fund may enter into interest rate
swap, cap or floor transactions, which may include preserving a return or spread
on a particular investment or portion of its portfolio or protecting against an
increase in the price of securities the Portfolio anticipates purchasing at a
later date. The Adviser does not intend to use these transactions in a
speculative manner. The Fund also may invest in interest rate transaction
futures. The Fund will enter into interest rate swap, cap or floor transactions
only with counterparties who have credit ratings of at least A (or the
equivalent) from any one nationally recognized statistical rating organization
or counterparties with guarantors with debt securities having such a rating.
Interest rate swaps involve the exchange by the Fund with another
party of their respective commitments to pay or receive interest (e.g., an
exchange of floating rate payments for fixed rate payments) computed based on a
contractually-based principal (or "notional") amount. Interest rate swaps are
entered into on a net basis (i.e., the two payment streams are netted out, with
the Fund receiving or paying, as the case may be, only the net amount of the two
payments). Interest rate caps and floors are similar to options in that the
purchase of an interest rate cap or floor entitles the purchaser, to the extent
that a specified index exceeds (in the case of a cap) or falls below (in the
case of a floor) a predetermined interest rate, to receive payments of interest
on a notional amount from the party selling the interest rate cap or floor. The
Fund may enter into interest rate swaps, caps and floors on either an
asset-based or liability-based basis, depending upon whether it is hedging its
assets or liabilities.
The swap market has grown substantially in recent years, with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become well established and relatively liquid. Caps and floors are less
liquid than swaps. These transactions do not involve the delivery of securities
or other underlying assets or principal. Accordingly, unless there is a
counterparty default, the risk of loss to the Fund from interest rate
transactions is limited to the net amount of interest payments that the
Portfolio is contractually obligated to make. The Fund will enter into interest
rate swap, cap or floor transactions only with counterparties who have credit
ratings of at least A- (or the equivalent) from any one nationally recognized
statistical rating organization ("NRSRO") or counterparties with guarantors with
debt securities having such a rating.
Synthetic Foreign Equity Securities. The Fund may invest in a form of
synthetic foreign equity securities, referred to as international warrants or
local access products. International warrants are financial instruments issued
by banks or other financial institutions, which may or may not be traded on a
foreign exchange. International warrants are a form of derivative security that
may give holders the right to buy or sell an underlying security or a basket of
securities representing an index from or to the issuer for a particular price or
may entitle holders to receive a cash payment relating to the value of the
underlying security or index. International warrants are similar to options in
that they are exercisable by the holder for an underlying security or the value
of that security, but are generally exercisable over a longer term than typical
options. These types of instruments may be American style exercise, which means
that they can be exercised at any time on or before the expiration date of the
international warrant, or European style exercise, which means that they may be
exercised only on the expiration date. International warrants have an exercise
price, which is fixed when the warrants are issued.
The Fund normally will invest in covered warrants, which entitle the
holder to purchase from the issuer common stock of an international company or
receive a cash payment (generally in U.S. dollars). The cash payment is
calculated according to a predetermined formula. The Fund may invest in low
exercise price warrants, which are warrants with an exercise price that is very
low relative to the market price of the underlying instrument at the time of
issue (e.g., one cent or less). The buyer of a low exercise price warrant
effectively pays the full value of the underlying common stock at the outset. In
the case of any exercise of warrants, there may be a time delay between the time
a holder of warrants gives instructions to exercise and the time the price of
the common stock relating to exercise or the settlement date is determined,
during which time the price of the underlying security could change
significantly. In addition, the exercise or settlement date of the warrants may
be affected by certain market disruption events, such as difficulties relating
to the exchange of a local currency into U.S. dollars, the imposition of capital
controls by a local jurisdiction or changes in the laws relating to foreign
investments. These events could lead to a change in the exercise date or
settlement currency of the warrants, or postponement of the settlement date. In
some cases, if the market disruption events continue for a certain period of
time, the warrants may become worthless resulting in a total loss of the
purchase price of the warrants.
The Fund will acquire covered warrants issued by entities deemed to be
creditworthy by the Adviser, who will monitor the creditworthiness of the
issuers on an on-going basis. Investments in these instruments involve the risk
that the issuer of the instrument may default on its obligation to deliver the
underlying security or cash in lieu thereof. These instruments may also be
subject to liquidity risk because there may be a limited secondary market for
trading the warrants. They are also subject, like other investments in foreign
securities, to foreign risk and currency risk.
International warrants also include equity warrants, index warrants,
and interest rate warrants. Equity warrants are generally issued in conjunction
with an issue of bonds or shares, although they also may be issued as part of a
rights issue or scrip issue. When issued with bonds or shares, they usually
trade separately from the bonds or shares after issuance. Most warrants trade in
the same currency as the underlying stock (domestic warrants), but also may be
traded in different currency (euro-warrants). Equity warrants are traded on a
number of foreign exchanges and in over-the-counter markets. Index warrants and
interest rate warrants are rights created by an issuer, typically a financial
institution, entitling the holder to purchase, in the case of a call, or sell,
in the case of a put, respectively, an equity index or a specific bond issue or
interest rate index at a certain level over a fixed period of time. Index
warrants transactions settle in cash, while interest rate warrants can typically
be exercised in the underlying instrument or settle in cash.
The Fund also may invest in long-term options of, or relating to,
international issuers. Long-term options operate much like covered warrants.
Like covered warrants, long-term options are call options created by an issuer,
typically a financial institution, entitling the holder to purchase from the
issuer outstanding securities of another issuer. Long-term options have an
initial period of one year or more, but generally have terms between three and
five years. Unlike U.S. options, long-term European options do not settle
through a clearing corporation that guarantees the performance of the
counterparty. Instead, they are traded on an exchange and subject to the
exchange's trading regulations.
Forward Commitments and When-Issued and Delayed Delivery Securities
-------------------------------------------------------------------
Forward commitments for the purchase or sale of securities may include
purchases on a "when-issued" basis or purchases or sales on a "delayed delivery"
basis. In some cases, a forward commitment may be conditioned upon the
occurrence of a subsequent event, such as approval and consummation of a merger,
corporate reorganization or debt restructuring (i.e., a "when, as and if issued"
trade). When forward commitment transactions are negotiated, the price is fixed
at the time the commitment is made, the Fund does not pay for the securities
until they are received, and the Fund is required to create a segregated account
with its custodian and to maintain in that account liquid assets in an amount
equal to or greater than, on a daily basis, the amount of the Fund's forward
commitments and "when-issued" or "delayed delivery" commitments.
The use of forward commitments enables the Fund to protect against
anticipated changes in exchange rates, interest rates and/or prices. For
instance, the Fund may enter into a forward contract when it enters into a
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. dollar price of the security
("transaction hedge"). In addition, when the Fund believes that a foreign
currency may suffer a substantial decline against the U.S. dollar, it may enter
into a forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of that Fund's securities denominated in
such foreign currency, or when the Fund believes that the U.S. dollar may suffer
a substantial decline against a foreign currency, it may enter into a forward
purchase contract to buy that foreign currency for a fixed dollar amount
("position hedge"). If the Adviser were to forecast incorrectly the direction of
exchange rate movements, the Fund might be required to complete such when-issued
or forward transactions at prices inferior to the then current market values.
When-issued securities and forward commitments may be sold prior to the
settlement date, but the Fund enters into when-issued and forward commitments
only with the intention of actually receiving securities or delivering them, as
the case may be. If the Fund chooses to dispose of the right to acquire a
when-issued security prior to its acquisition or dispose of its right to deliver
or receive against a forward commitment, it may incur a gain or loss. Any
significant commitment of Fund assets to the purchase of securities on a "when,
as and if issued" basis may increase the volatility of the Fund's net asset
value.
At the time the Fund intends to enter into a forward commitment, it
will record the transaction and thereafter reflect the value of the security
purchased or, if a sale, the proceeds to be received, in determining its net
asset value. Any unrealized appreciation or depreciation reflected in such
valuation of a "when, as and if issued" security would be canceled in the event
that the required conditions did not occur and the trade was canceled.
The Fund will enter into forward commitments and make commitments to
purchase securities on a "when-issued" or "delayed delivery" basis only with the
intention of actually acquiring the securities. However, the Fund may sell these
securities before the settlement date if, in the opinion of the Adviser, it is
deemed advisable as a matter of investment strategy.
Although the Fund does not intend to enter into forward commitments
for speculative purposes and the Fund intends to adhere to the provisions of
Commission policies, purchases of securities on such bases may involve more risk
than other types of purchases. For example, by committing to purchase securities
in the future, the Fund subjects itself to a risk of loss on such commitments as
well as on its portfolio securities. Also, the Fund may have to sell assets
which have been set aside in order to meet redemptions. In addition, if the Fund
determines it is advisable as a matter of investment strategy to sell the
forward commitment or "when-issued" or "delayed delivery" securities before
delivery, that Fund may incur a gain or loss because of market fluctuations
since the time the commitment to purchase such securities was made. Any such
gain or loss would be treated as a capital gain or loss for tax purposes. When
the time comes to pay for the securities to be purchased under a forward
commitment or on a "when-issued" or "delayed delivery" basis, the Fund will meet
its obligations from the then available cash flow or the sale of securities, or,
although it would not normally expect to do so, from the sale of the forward
commitment or "when-issued" or "delayed delivery" securities themselves (which
may have a value greater or less than the Fund's payment obligation). In
addition, no interest or dividends accrue to the purchaser prior to the
settlement date for securities purchased or sold under a forward commitment.
Illiquid Securities and Non-Publicly Traded Securities
------------------------------------------------------
The Fund will not invest in illiquid securities if immediately after
such investment more than 15% or such other amount permitted by guidance
regarding the 1940 Act of the Fund's net assets would be invested in such
securities. For this purpose, illiquid securities include, among others, (a)
direct placements or other securities which are subject to legal or contractual
restrictions on resale or for which there is no readily available market (e.g.,
trading in the security is suspended or, in the case of unlisted securities,
market makers do not exist or will not entertain bids or offers), (b) options
purchased by the Fund over-the-counter and the cover for options written by the
Fund over-the-counter, and (c) repurchase agreements not terminable within seven
days. Securities that have legal or contractual restrictions on resale but have
a readily available market are not deemed illiquid for purposes of this
limitation.
Mutual funds do not typically hold a significant amount of restricted
securities (securities that are subject to restrictions on resale to the general
public) or other illiquid securities because of the potential for delays on
resale and uncertainty in valuation. Limitations on resale may have an adverse
effect on the marketability of portfolio securities and a mutual fund might be
unable to dispose of restricted or other illiquid securities promptly or at
reasonable prices and might thereby experience difficulty satisfying redemptions
within seven days. A mutual fund might also have to take certain steps or wait a
certain amount of time in order to remove the transfer restrictions for such
restricted securities in order to dispose of them, resulting in additional
expense and delay.
Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act") allows a broader institutional trading market for securities
otherwise subject to restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of the Securities
Act for resales of certain securities to qualified institutional buyers. An
insufficient number of qualified institutional buyers interested in purchasing
certain restricted securities held by the Fund, however, could affect adversely
the marketability of such portfolio securities and the Fund might be unable to
dispose of such securities promptly or at reasonable prices.
The Adviser, acting under the supervision of the Board of Directors,
will monitor the liquidity of restricted securities in the Fund that are
eligible for resale pursuant to Rule 144A. In reaching liquidity decisions, the
Adviser will consider, among others, the following factors: (1) the frequency of
trades and quotes for the security; (2) the number of dealers issuing quotations
to purchase or sell the security; (3) the number of other potential purchasers
of the security; (4) the number of dealers undertaking to make a market in the
security; (5) the nature of the security (including its unregistered nature) and
the nature of the marketplace for the security (e.g., the time needed to dispose
of the security, the method of soliciting offers and the mechanics of the
transfer); and (6) any applicable Commission interpretation or position with
respect to such type of securities.
Investment in Other Investment Companies
----------------------------------------
The Fund may invest in the securities of other investment companies,
including exchange-traded funds, to the extent permitted under the 1940 Act or
the rules and regulations thereunder (as such statute, rules or regulations may
be amended from time to time) or by guidance regarding, interpretations of, or
exemptive orders under, the 1940 Act or the rules or regulations thereunder
published by appropriate regulatory authorities.
Lending of Portfolio Securities
-------------------------------
The Fund may seek to increase income by lending portfolio securities.
A principal risk in lending portfolio securities, as with other extensions of
credit, consists of the possible loss of rights in the collateral should the
borrower fail financially. In addition, the Fund may be exposed to the risk that
the sale of any collateral realized upon the borrower's default will not yield
proceeds sufficient to replace the loaned securities. In determining whether to
lend securities to a particular borrower, the Adviser will consider all relevant
facts and circumstances, including the creditworthiness of the borrower. The
loans would be made only to firms deemed by the Adviser to be of good standing,
and when, in the judgment of the Adviser, the consideration that can be earned
currently from securities loans of this type justifies the attendant risk. The
Fund may lend portfolio securities to the extent permitted under the 1940 Act or
the rules and regulations thereunder (as such statute, rules or regulations may
be amended from time to time) or by guidance regarding, interpretations of, or
exemptive orders under, the 1940 Act.
Under present regulatory policies, including those of the Board of
Governors of the Federal Reserve System and the Commission, such loans may be
made only to member firms of the New York Stock Exchange (the "Exchange") and
will be required to be secured continuously by collateral in cash, cash
equivalents, or U.S. Treasury Bills maintained on a current basis at an amount
at least equal to the market value of the securities loaned. The Fund will have
the right to call a loan and obtain the securities loaned at any time on five
days' notice. While securities are on loan, the borrower will pay the Fund any
income from the securities. The Fund may invest any cash collateral in portfolio
securities and earn additional income or receive an agreed-upon amount of income
from a borrower who has delivered equivalent collateral. Any such investment of
cash collateral will be subject to the Fund's investment risks.
The Fund will not, however, have the right to vote any securities
having voting rights during the existence of the loan. The Fund will have the
right to regain record ownership of loaned securities or equivalent securities
in order to exercise ownership rights such as voting rights, subscription rights
and rights to dividends, interest, or distributions.
The Fund may pay reasonable finders', administrative, and custodial
fees in connection with a loan.
Real Estate Investment Trusts
-----------------------------
Real Estate Investment Trusts ("REITs") are pooled investment vehicles
which invest primarily in income producing real estate or real estate related
loans or interests. REITs are generally classified as equity REITs, mortgage
REITs or a combination of equity and mortgage REITs. Equity REITs invest the
majority of their assets directly in real property and derive income primarily
from the collection of rents. Equity REITs can also realize capital gains by
selling properties that have appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and derive income from the
collection of interest payments. Similar to investment companies such as the
Fund, REITs are not taxed on income distributed to shareholders provided they
comply with several requirements of the United States Internal Revenue Code of
1986, as amended (the "Code"). The Fund will indirectly bear its proportionate
share of expenses incurred by REITs in which the Fund invests in addition to the
expenses incurred directly by the Fund.
Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to heavy cash flow dependency, default by borrowers and
self-liquidation.
Investing in REITs involves risks similar to those associated with
investing in small capitalization companies. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger company securities.
Historically, small capitalization stocks, such as REITs, have had more price
volatility than larger capitalization stocks.
REITs are subject to the possibilities of failing to qualify for
tax-free pass-through of income under the Code and failing to maintain their
exemptions from registration under the 1940 Act. REITs (especially mortgage
REITs) also are subject to interest rate risks. When interest rates decline, the
value of a REIT's investment in fixed-rate obligations can be expected to rise.
Conversely, when interest rates rise, the value of a REIT's investment in
fixed-rate obligations can be expected to decline. In contrast, as interest
rates on adjustable rate mortgage loans are reset periodically, yields on a
REIT's investments in such loans will gradually align themselves to reflect
changes in market interest rates, causing the value of such investments to
fluctuate less dramatically in response to interest rate fluctuations than would
investments in fixed rate obligations.
Repurchase Agreements
---------------------
A repurchase agreement is an agreement by which the Fund purchases a
security and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date, normally one day or a few days later.
The resale price is greater than the purchase price, reflecting an agreed-upon
"interest rate" that is effective for the period of time the buyer's money is
invested in the security, and which is related to the current market rate of the
purchased security rather than its coupon rate. During the term of the
repurchase agreement, the Fund monitors on a daily basis the market value of the
securities subject to the agreement and, if the market value of the securities
falls below the resale amount provided under the repurchase agreement, the
seller under the repurchase agreement is required to provide additional
securities equal to the amount by which the market value of the securities falls
below the resale amount. Because a repurchase agreement permits the Fund to
invest temporarily available cash on a fully-collateralized basis, repurchase
agreements permit the Fund to earn a return on temporarily available cash while
retaining "overnight" flexibility in pursuit of investments of a longer-term
nature. Repurchase agreements may exhibit the characteristics of loans by the
Fund.
The obligation of the seller under the repurchase agreement is not
guaranteed, and there is a risk that the seller may fail to repurchase the
underlying security, whether because of the seller's bankruptcy or otherwise. In
such event, the Fund would attempt to exercise its rights with respect to the
underlying security, including possible sale of the securities. The Fund may
incur various expenses in connection with the exercise of its rights and may be
subject to various delays and risks of loss, including (a) possible declines in
the value of the underlying securities, (b) possible reduction in levels of
income and (c) lack of access to the securities (if they are held through a
third-party custodian) and possible inability to enforce the Fund's rights. The
Fund's Board of Directors has established procedures, which are periodically
reviewed by the Board, pursuant to which the Adviser monitors the
creditworthiness of the dealers with which the Fund enters into repurchase
agreement transactions.
The Fund may enter into repurchase agreements pertaining to U.S.
Government Securities with member banks of the Federal Reserve System or
"primary dealers" (as designated by the Federal Reserve Bank of New York) in
such securities. There is no percentage restriction on the Fund's ability to
enter into repurchase agreements. Currently, the Fund intends to enter into
repurchase agreements only with its custodian and such primary dealers.
Rights and Warrants
-------------------
The Fund may invest in rights or warrants which entitle the holder to
buy equity securities at a specific price for a specific period of time, but
will do so only if the equity securities themselves are deemed appropriate by
the Adviser for inclusion in the Fund's portfolio. Rights and warrants may be
considered more speculative than certain other types of investments in that they
do not entitle a holder to dividends or voting rights with respect to the
securities which may be purchased nor do they represent any rights in the assets
of the issuing company. Also, the value of a right or warrant does not
necessarily change with the value of the underlying securities and a right or
warrant ceases to have value if it is not exercised prior to the expiration
date.
Short Sales
-----------
A short sale is effected by selling a security that the Fund does not
own, or if the Fund does own such security, it is not to be delivered upon
consummation of the sale. A short sale is against the box to the extent that the
Fund contemporaneously owns or has the right to obtain securities identical to
those sold short without payment. Short sales may be used in some cases by the
Fund to defer the realization of gain or loss for federal income tax purposes on
securities then owned by the Fund. However, if the Fund has unrealized gain with
respect to a security and enters into a short sale with respect to such
security, the Fund generally will be deemed to have sold the appreciated
security and thus will recognize gain for tax purposes. See "Dividends,
Distributions and Taxes - United States Federal Income Taxation of the Fund -
Tax Straddles," below.
Standby Commitment Agreements
-----------------------------
The Fund may from time to time enter into standby commitment
agreements. Such agreements commit the Fund, for a stated period of time, to
purchase a stated amount of a security which may be issued and sold to the Fund
at the option of the issuer. The price and coupon of the security are fixed at
the time of the commitment. At the time of entering into the agreement the Fund
is paid a commitment fee, regardless of whether or not the security ultimately
is issued, which is typically approximately 0.5% of the aggregate purchase price
of the security which the Fund has committed to purchase. The Fund will enter
into such agreements only for the purpose of investing in the security
underlying the commitment at a yield and price which are considered advantageous
to the Fund and which are unavailable on a firm commitment basis. The Fund will
at all times maintain a segregated account with its custodian of liquid assets
in an aggregate amount equal to the purchase price of the securities underlying
the commitment.
There can be no assurance that the securities subject to a standby
commitment will be issued and the value of the security, if issued, on the
delivery date may be more or less than its purchase price. Since the issuance of
the security underlying the commitment is at the option of the issuer, the Fund
will bear the risk of capital loss in the event the value of the security
declines and may not benefit from an appreciation in the value of the security
during the commitment period if the issuer decides not to issue and sell the
security to the Fund.
The purchase of a security subject to a standby commitment agreement
and the related commitment fee will be recorded on the date on which the
security can reasonably be expected to be issued and the value of the security
will thereafter be reflected in the calculation of the Fund's NAV. The cost
basis of the security will be adjusted by the amount of the commitment fee. In
the event the security is not issued, the commitment fee will be recorded as
income on the expiration date of the standby commitment.
Zero-Coupon and Payment-in-Kind Bonds
-------------------------------------
The Fund may at times invest in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from their principal amount in lieu of paying interest periodically.
Payment-in-kind bonds allow the issuer, at its option, to make current interest
payments on the bonds either in cash or in additional bonds. Because zero-coupon
bonds do not pay current interest, their value is generally subject to greater
fluctuation in response to changes in market interest rates than bonds which pay
interest currently. Both zero-coupon and payment-in-kind bonds allow an issuer
to avoid the need to generate cash to meet current interest payments.
Accordingly, such bonds may involve greater credit risks than bonds paying
interest currently. Even though such bonds do not pay current interest in cash,
the Fund is nonetheless required to accrue interest income on such investments
and to distribute such amounts at least annually to shareholders. Thus, the Fund
could be required to liquidate other investments in order to satisfy its
dividend requirements at times when the Adviser would not otherwise deem it
advisable to do so.
Certain Risk Considerations
---------------------------
Investment in the Fund involves the special risk considerations
described below.
Risk of Investments in Foreign Securities. Investing in securities
issued by foreign corporations involves considerations and possible risks not
typically associated with investing in obligations issued by U.S. corporations.
The values of foreign investments are affected by changes in currency rates or
exchange control regulations, application of foreign tax laws, including
withholding taxes, changes in governmental administration or economic or
monetary policy (in this country or abroad) or changed circumstances in dealings
between nations. Costs are incurred in connection with conversions between
various currencies. In addition, foreign brokerage commissions are generally
higher than in the United States, and foreign securities markets may be less
liquid, more volatile and less subject to governmental supervision than in the
United States. Investments in foreign countries could be affected by other
factors not present in the United States, including expropriation, confiscatory
taxation, lack of uniform accounting and auditing standards and potential
difficulties in enforcing contractual obligations and could be subject to
extended settlement periods.
Currency Considerations. Because substantially all of the Fund's
assets will be invested in securities denominated in foreign currencies and a
corresponding portion of the Fund's revenues will be received in such
currencies, the dollar equivalent of the Fund's net assets and distributions
will be adversely affected by reductions in the value of certain foreign
currencies relative to the U.S. dollar. Such changes will also affect the Fund's
income. The Fund will, however, have the ability to attempt to protect itself
against adverse changes in the values of foreign currencies by engaging in
certain of the investment practices listed above. While the Fund has this
ability, there is no certainty as to whether and to what extent the Fund will
engage in these practices. If the value of the foreign currencies in which the
Fund receives its income falls relative to the U.S. dollar between receipt of
the income and the making of Fund distributions, the Fund may be required to
liquidate securities in order to make distributions if the Fund has insufficient
cash in U.S. dollars to meet distribution requirements. Similarly, if an
exchange rate declines between the time the Fund incurs expenses in U.S. dollars
and the time cash expenses are paid, the amount of the currency required to be
converted into U.S. dollars in order to pay expenses in U.S. dollars could be
greater than the equivalent amount of such expenses in the currency at the time
they were incurred.
Fundamental Investment Policies
-------------------------------
The following investment restrictions may not be changed without
approval by the vote of a majority of the Fund's outstanding voting securities,
which means the affirmative vote of the holders of (i) 67% or more of the shares
represented at a meeting at which more than 50% of the outstanding shares are
present in person or by proxy, or (ii) more than 50% of the outstanding shares,
whichever is less.
As a matter of fundamental policy, the Fund may not:
(a) concentrate investments in an industry, as concentration may
be defined under the 1940 Act or the rules and regulations thereunder (as such
statute, rules or regulations may be amended from time to time) or by guidance
regarding, interpretations of, or exemptive orders under, the 1940 Act or the
rules or regulations thereunder published by appropriate regulatory authorities;
(b) issue any senior security (as that term is defined in the
1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the
rules and regulations thereunder (as such statute, rules or regulations may be
amended from time to time) or by guidance regarding, or interpretations of, or
exemptive orders under, the 1940 Act or the rules or regulations thereunder
published by appropriate regulatory authorities. For purposes of this
restriction, margin and collateral arrangements, including, for example, with
respect to permitted borrowings, options, futures contracts, options on futures
contracts and other derivatives such as swaps are not deemed to involve the
issuance of a senior security;
(c) make loans except through (i) the purchase of debt
obligations in accordance with its investment objective and policies; (ii) the
lending of portfolio securities; (iii) the use of repurchase agreements; or
(iv) the making of loans to affiliated funds as permitted under the 1940 Act,
the rules and regulations thereunder (as such statutes, rules or regulations
may be amended from time to time), or by guidance regarding, and
interpretations of, or exemptive orders under, the 1940 Act;
(d) purchase or sell real estate except that it may dispose of
real estate acquired as a result of the ownership of securities or other
instruments. This restriction does not prohibit the Fund from investing in
securities or other instruments backed by real estate or in securities of
companies engaged in the real estate business;
(e) purchase or sell commodities regulated by the Commodity
Futures Trading Commission under the Commodity Exchange Act or commodities
contracts except for futures contracts and options on futures contracts; or
(f) act as an underwriter of securities, except that the Fund may
acquire restricted securities under circumstances in which, if such securities
were sold, the Fund might be deemed to be an underwriter for purposes of the
Securities Act.
As a fundamental policy, the Fund is diversified (as that term is
defined in the 1940 Act). This means that at least 75% of the Fund's assets
consist of:
o Cash or cash items;
o Government securities;
o Securities of other investment companies; and
o Securities of any one issuer that represent not more than
10% of the outstanding voting securities of the issuer of
the securities and not more than 5% of the total assets
of the Fund.
Non-Fundamental Investment Policy
---------------------------------
The following is a description of an operating policy that the Fund
has adopted but that is not fundamental and is subject to change without
shareholder approval.
The Fund may not purchase securities on margin, except (i) as
otherwise provided under rules adopted by the Commission under the 1940 Act or
by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that
the Fund may obtain such short-term credits as are necessary for the clearance
of portfolio transactions, and the Fund may make margin payments in connection
with futures contracts, options, forward contracts, swaps, caps, floors, collars
and other financial instruments.
-------------------------------------------------------------------------------
MANAGEMENT OF THE FUND
-------------------------------------------------------------------------------
Adviser
-------
The Adviser, a Delaware limited partnership with principal offices at
1345 Avenue of the Americas, New York, New York 10105, has been retained under
an investment advisory agreement (the "Advisory Agreement") to provide
investment advice and, in general, to conduct the management and investment
program of the Fund under the supervision of the Fund's Board of Directors (see
"Management of the Fund" in the Prospectuses).
The Adviser is a leading global investment management firm supervising
client accounts with assets as of June 30, 2006 totaling approximately $625
billion. The Adviser provides management services for many of the largest U.S.
public and private employee benefit plans, endowments, foundations, public
employee retirement funds, banks, insurance companies and high net worth
individuals worldwide. The Adviser is also one of the largest mutual fund
sponsors, with a diverse family of globally distributed mutual fund portfolios.
As one of the world's leading global investment management organizations, the
Adviser is able to compete for virtually any portfolio assignment in any
developed capital market in the world.
The Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. As of June 30, 2006, AllianceBernstein
Holding, L.P. ("Holding"), a Delaware limited partnership, owned approximately
32.7% of the issued and outstanding units of limited partnership interest in the
Adviser ("AllianceBernstein Units"). Units representing assignments of
beneficial ownership of limited partnership interests in Holding ("Holding
Units") trade publicly on the Exchange under the ticker symbol "AB".
AllianceBernstein Units do not trade publicly and are subject to significant
restrictions on transfer. AllianceBernstein Corporation ("AB Corp.") is the
general partner of both the Adviser and Holding. AB Corp. owns 100,000 general
partnership units in Holding and a 1% general partnership interest in the
Adviser. AB Corp. is an indirect wholly-owned subsidiary of AXA Financial, Inc.
("AXA Financial"), a Delaware corporation.
As of June 30, 2006, AXA, AXA Financial, AXA Equitable Life Insurance
Company ("AXA Equitable") and certain subsidiaries of AXA Equitable beneficially
owned approximately 59.6% of the issued and outstanding AllianceBernstein Units
and approximately 1.7% of the issued and outstanding Holding Units that,
including the general partnership interests in the Adviser and Holding,
represent an economic interest of approximately 60.6% in the Adviser. As of June
30, 2006, SCB Partners, Inc., a wholly-owned subsidiary of SCB, Inc.,
beneficially owned approximately 6.3% of the issued and outstanding
AllianceBernstein Units.
AXA, a French company, is the holding company for an international
group of companies and a worldwide leader in financial protection and wealth
management. AXA operates primarily in Western Europe, North America and the
Asia/Pacific region and, to a lesser extent, in other regions including the
Middle East, Africa and South America. AXA has five operating business segments:
life and savings, property and casualty insurance, international insurance
(including reinsurance), asset management and other financial services. AXA
Financial is a wholly-owned subsidiary of AXA. AXA Equitable is an indirect
wholly-owned subsidiary of AXA Financial.
Under the Advisory Agreement, the Adviser furnishes advice and
recommendations with respect to the Fund's portfolio of securities and
investments and provides persons satisfactory to the Board of Directors to act
as officers and employees of the Fund. Such officers and employees, as well as
certain Directors of the Fund may be employees of the Adviser or its affiliates.
The Adviser is, under the Advisory Agreement, responsible for certain
expenses incurred by the Fund, including, for example, office facilities and
certain administrative services, and any expenses incurred in promoting the sale
of Fund shares (other than the portion of the promotional expenses borne by the
Fund in accordance with an effective plan pursuant to Rule 12b-1 under the 1940
Act, and the costs of printing Fund prospectuses and other reports to
shareholders and fees related to registration with the Commission and with state
regulatory authorities).
The Fund has, under the Advisory Agreement, assumed the obligation for
payment of all of its other expenses. As to the obtaining of services other than
those specifically provided to the Fund by the Adviser, the Fund may employ its
own personnel. For such services, it also may utilize personnel employed by the
Adviser or its affiliates and, in such event, the services will be provided to
the Fund at cost and the payments therefore must be specifically approved by the
Fund's Board of Directors. The Fund paid to the Adviser, after any waivers
and/or reimbursements, a total of $[_____________] in respect of such services
during the fiscal year of the Fund ended June 30, 2006.
Prior to September 7, 2004, for the services rendered by the Adviser
under the Advisory Agreement, the Fund paid the Adviser at the annual rate of
1.00% of the Fund's average daily net assets up to $5 billion; 0.95% of the
Fund's average daily net assets exceeding $5 billion up to $7.5 billion; 0.90%
of the Fund's average daily net assets exceeding $7.5 billion up to $10 billion;
and 0.85% of the Fund's average daily net assets exceeding $10 billion.
Effective as of January 1, 2004, the Adviser waived a portion of its advisory
fee. The advisory fee waiver reduced the advisory fee to .75% of the first $2.5
billion, .65% of the excess over $2.5 billion up to $5 billion and .60% of the
excess over $5 billion as a percentage of the Fund's average daily net assets.
Effective September 7, 2004, the Board of Directors approved an amendment to the
Advisory Agreement to reduce the contractual advisory fee to these amounts. The
fee is accrued daily and paid monthly. The Adviser has contractually agreed for
the current fiscal year to waive its fee and bear certain expenses so that total
expenses do not exceed on an annual basis 1.50%, 2.20%, 2.20%, 1.70%, 1.45%,
1.20% and 1.20% of average daily net assets, respectively, for Class A, Class B,
Class C, Class R, Class K, Class I and Advisor Class shares. This contractual
agreement automatically extends each year unless the Adviser provides written
notice 60 days prior to the Fund's fiscal year end. For the fiscal years ended
June 30, 2006, 2005 and 2004, the Adviser received from the Fund, advisory fees
in the amount of $[_______________](net of $[_______________], which was waived
by the Adviser due to the expense limitation agreement), $0 (net of $389,710,
which was waived by the Adviser due to the expense limitation agreement and
$20,170 which was waived by the Adviser under the agreement with the New York
Attorney General) and $0 (net of $48,140, which was waived by the Adviser due to
the expense limitation agreement and $11,884, which was waived by the Adviser
under the agreement with the New York Attorney General), respectively.
The Advisory Agreement became effective on July 10, 2002. The Advisory
Agreement was approved by the unanimous vote, cast in person, of the Fund's
Directors including the Directors who are not parties to the Advisory Agreement
or "interested persons," as defined in the 1940 Act, of any such party at a
meeting called for the purpose and held on July 9, 2002.
The Advisory Agreement continues in effect provided that such
continuance is specifically approved at least annually by the Fund's Directors
or by a majority vote of the holders of the outstanding voting securities of the
Fund and, in either case, by a majority of the Directors who are not parties to
the Advisory Agreement, or interested persons, as defined in the 1940 Act, of
any such party, at a meeting in person called for the purpose of voting on such
matter. Most recently continuance of the Advisory Agreement for an additional
annual term was approved by vote, cast in person, by the Board of Directors,
including a majority of the Directors who are not "interested persons" as
defined in the 1940 Act, at their meeting held on [_______________].
The Advisory Agreement is terminable without penalty by a vote of a
majority of the Fund's outstanding voting securities or by a vote of a majority
of the Directors on 60 days' written notice or by the Adviser on 60 days'
written notice, and will automatically terminate in the event of assignment. The
Advisory Agreement provides that in the absence of willful misfeasance, bad
faith or gross negligence on the part of the Adviser, or of reckless disregard
of its obligations thereunder, the Adviser shall not be liable for any action or
failure to act in accordance with its duties thereunder.
The Adviser may act as an investment adviser to other persons, firms
or corporations, including investment companies, and is investment adviser to
the following registered investment companies: AllianceBernstein Balanced
Shares, Inc., AllianceBernstein Blended Style Series, Inc., AllianceBernstein
Bond Fund, Inc., AllianceBernstein Cap Fund, Inc., AllianceBernstein Corporate
Shares, AllianceBernstein Capital Reserves, AllianceBernstein Emerging Market
Debt Fund, Inc., AllianceBernstein Exchange Reserves, AllianceBernstein
Fixed-Income Shares, Inc. AllianceBernstein Focused Growth & Income Fund, Inc.,
AllianceBernstein Global Government Income Trust, Inc., AllianceBernstein Global
Health Care Fund, Inc., AllianceBernstein Global Strategic Income Trust, Inc.,
AllianceBernstein Global Technology Fund, Inc., AllianceBernstein Government
Reserves, AllianceBernstein Greater China '97 Fund, Inc., AllianceBernstein
Growth and Income Fund, Inc., AllianceBernstein High Yield Fund, Inc.,
AllianceBernstein Institutional Funds, Inc., AllianceBernstein Institutional
Reserves, Inc., AllianceBernstein International Growth Fund, Inc.,
AllianceBernstein International Research Growth Fund, Inc., AllianceBernstein
Large Cap Growth Fund, Inc., AllianceBernstein Mid-Cap Growth Fund, Inc.,
AllianceBernstein Municipal Income Fund, Inc., AllianceBernstein Municipal
Income Fund II, AllianceBernstein Real Estate Investment Fund, Inc.,
AllianceBernstein Trust, AllianceBernstein Utility Income Fund, Inc.,
AllianceBernstein Variable Products Series Fund, Inc., Sanford C. Bernstein
Fund, Inc., Sanford C. Bernstein Fund II, Inc., The AllianceBernstein Pooling
Portfolios and The AllianceBernstein Portfolios, all registered open-end
investment companies; and to ACM Government Opportunity Fund, Inc., ACM Income
Fund, Inc., ACM Managed Dollar Income Fund, Inc., ACM Managed Income Fund, Inc.,
ACM Municipal Securities Income Fund, Inc., Alliance All-Market Advantage Fund,
Inc., Alliance California Municipal Income Fund, Inc., Alliance National
Municipal Income Fund, Inc., Alliance New York Municipal Income Fund, Inc.,
Alliance World Dollar Government Fund, Inc., Alliance World Dollar Government
Fund II, Inc. and The Spain Fund, Inc., all registered closed-end investment
companies.
Additional Information About the Fund's Portfolio Managers
----------------------------------------------------------
The management of and investment decisions for the Fund's portfolio
are made by the Adviser's Global Research Growth research sector heads with
oversight by the Adviser's Global Research Growth Oversight Group. Norman M.
Fidel, Jane E. Schneirov, Scott E. McElroy, Janet A. Walsh, Thomas A. Schmitt,
and Francis X. Suozzo are the research sector heads with the most significant
responsibility for the day-to-day management of the Fund's portfolio. For
additional information about the portfolio management of the Fund, see
"Management of the Fund - Portfolio Managers" in the Fund's prospectus.
The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of June 30, 2006 are set forth
below:
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND(1)
Norman M. Fidel [__________]
Jane E. Schneirov [__________]
Scott E. McElroy [__________]
Janet A. Walsh [__________]
Thomas A. Schmitt [__________]
Francis X. Suozzo [__________]
(1) The ranges presented above include any vested shares awarded
under the the Adviser's Partners Compensation Plan and/or the
Profit Sharing/401(k) Plan (the "Plans").
As of June 30, 2006, employees of the Adviser had approximately
$[____________________] invested in shares of the Fund and approximately
$[____________________] in shares of all AllianceBernstein Mutual Funds
(excluding AllianceBernstein money market funds) through their interests in the
Profit Sharing/401(k) Plan and/or the Partners Compensation Plan, including both
vested and unvested amounts.
The following tables provide information regarding registered
investment companies other than the Fund, other pooled investment vehicles and
other accounts over which the Fund's portfolio managers also have day-to-day
management responsibilities. The tables provide the numbers of such accounts,
the total assets in such accounts and the number of accounts and total assets
whose fees are based on performance. The information is provided as of June 30,
2006.
-------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES
(excluding the Fund)
-------------------------------------------------------------------------------
Number of Total Assets
Registered of Registered
Total Number Total Assets Investment Investment
of Registered of Registered Companies Companies
Investment Investment Managed with Managed with
Companies Companies Performance- Performance-
Portfolio Manager Managed Managed based Fees based Fees
-------------------------------------------------------------------------------
Norman M. Fidel [_____] $[_________] [____] $[_________]
Jane E. Schneirov [_____] $[_________] [____] $[_________]
Scott E. McElroy [_____] $[_________] [____] $[_________]
Janet A. Walsh [_____] $[_________] [____] $[_________]
Thomas A. Schmitt [_____] $[_________] [____] $[_________]
Francis X. Suozzo [_____] $[_________] [____] $[_________]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
OTHER POOLED INVESTMENT VEHICLES
-------------------------------------------------------------------------------
Number of Total Assets
Total Total Pooled of Pooled
Number of Assets of Investment Investment
Pooled Pooled Vehicles Vehicles
Investment Investment Managed with Managed with
Vehicles Vehicles Performance- Performance-
Portfolio Manager Managed Managed based Fees based Fees
-------------------------------------------------------------------------------
Norman M. Fidel [_____] $[_________] [____] $[_________]
Jane E. Schneirov [_____] $[_________] [____] $[_________]
Scott E. McElroy [_____] $[_________] [____] $[_________]
Janet A. Walsh [_____] $[_________] [____] $[_________]
Thomas A. Schmitt [_____] $[_________] [____] $[_________]
Francis X. Suozzo [_____] $[_________] [____] $[_________]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
OTHER ACCOUNTS
-------------------------------------------------------------------------------
Total Number Total Assets
Number Total Assets of Other of Other
of Other of Other Managed with Accounts with
Accounts Accounts Performance- Performance-
Portfolio Manager Managed Managed based Fees based Fees
-------------------------------------------------------------------------------
Norman M. Fidel [_____] $[_________] [____] $[_________]
Jane E. Schneirov [_____] $[_________] [____] $[_________]
Scott E. McElroy [_____] $[_________] [____] $[_________]
Janet A. Walsh [_____] $[_________] [____] $[_________]
Thomas A. Schmitt [_____] $[_________] [____] $[_________]
Francis X. Suozzo [_____] $[_________] [____] $[_________]
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Investment Professional Conflict of Interest Disclosure
-------------------------------------------------------
As an investment adviser and fiduciary, the Adviser owes its clients
and shareholders an undivided duty of loyalty. We recognize that conflicts of
interest are inherent in our business and accordingly have developed policies
and procedures (including oversight monitoring) reasonably designed to detect,
manage and mitigate the effects of actual or potential conflicts of interest in
the area of employee personal trading, managing multiple accounts for multiple
clients, including AllianceBernstein Mutual Funds, and allocating investment
opportunities. Investment professionals, including portfolio managers and
research analysts, are subject to the above-mentioned policies and oversight
monitoring to ensure that all clients are treated equitably. We place the
interests of our clients first and expect all of our employees to meet their
fiduciary duties.
Employee Personal Trading. The Adviser has adopted a Code of Business
Conduct and Ethics that is designed to detect and prevent conflicts of interest
when investment professionals and other personnel of the Adviser own, buy or
sell securities which may be owned by, or bought or sold for, clients. Personal
securities transactions by an employee may raise a potential conflict of
interest when an employee owns or trades in a security that is owned or
considered for purchase or sale by a client, or recommended for purchase or sale
by an employee to a client. Subject to the reporting requirements and other
limitations of its Code of Business Conduct and Ethics, the Adviser permits its
employees to engage in personal securities transactions, and also allows them to
acquire investments in the AllianceBernstein Mutual Funds through direct
purchase, 401K/profit sharing plan investment and/or notionally in connection
with deferred incentive compensation awards. The Adviser's Code of Ethics and
Business Conduct requires disclosure of all personal accounts and maintenance of
brokerage accounts with designated broker-dealers approved by the Adviser. The
Code also requires preclearance of all securities transactions (except
transactions in open-end mutual funds) and imposes a one-year holding period for
securities purchased by employees to discourage short-term trading.
Managing Multiple Accounts for Multiple Clients. The Adviser has
compliance policies and oversight monitoring in place to address conflicts of
interest relating to the management of multiple accounts for multiple clients.
Conflicts of interest may arise when an investment professional has
responsibilities for the investments of more than one account because the
investment professional may be unable to devote equal time and attention to each
account. The investment professional or investment professional teams for each
client may have responsibilities for managing all or a portion of the
investments of multiple accounts with a common investment strategy, including
other registered investment companies, unregistered investment vehicles, such as
hedge funds, pension plans, separate accounts, collective trusts and charitable
foundations. Among other things, the Adviser's policies and procedures provide
for the prompt dissemination to investment professionals of initial or changed
investment recommendations by analysts so that investment professionals are
better able to develop investment strategies for all accounts they manage. In
addition, investment decisions by investment professionals are reviewed for the
purpose of maintaining uniformity among similar accounts and ensuring that
accounts are treated equitably. No investment professional that manages client
accounts carrying performance fees is compensated directly or specifically for
the performance of those accounts. Investment professional compensation reflects
a broad contribution in multiple dimensions to long-term investment success for
our clients and is not tied specifically to the performance of any particular
client's account, nor is it directly tied to the level or change in level of
assets under management.
Allocating Investment Opportunities. The Adviser has policies and
procedures intended to address conflicts of interest relating to the allocation
of investment opportunities. These policies and procedures are designed to
ensure that information relevant to investment decisions is disseminated
promptly within its portfolio management teams and investment opportunities are
allocated equitably among different clients. The investment professionals at the
Adviser routinely are required to select and allocate investment opportunities
among accounts. Portfolio holdings, position sizes, and industry and sector
exposures tend to be similar across similar accounts, which minimizes the
potential for conflicts of interest relating to the allocation of investment
opportunities. Nevertheless, investment opportunities may be allocated
differently among accounts due to the particular characteristics of an account,
such as size of the account, cash position, tax status, risk tolerance and
investment restrictions or for other reasons.
The Adviser's procedures are also designed to prevent potential
conflicts of interest that may arise when the Adviser has a particular financial
incentive, such as a performance-based management fee, relating to an account.
An investment professional may perceive that he or she has an incentive to
devote more time to developing and analyzing investment strategies and
opportunities or allocating securities preferentially to accounts for which the
Adviser could share in investment gains.
To address these conflicts of interest, the Adviser's policies and
procedures require, among other things, the prompt dissemination to investment
professionals of any initial or changed investment recommendations by analysts;
the aggregation of orders to facilitate best execution for all accounts; price
averaging for all aggregated orders; objective allocation for limited investment
opportunities (e.g., on a rotational basis) to ensure fair and equitable
allocation among accounts; and limitations on short sales of securities. These
procedures also require documentation and review of justifications for any
decisions to make investments only for select accounts or in a manner
disproportionate to the size of the account.
Portfolio Manager Compensation
------------------------------
The Adviser's compensation program for investment professionals is
designed to be competitive and effective in order to attract and retain the
highest caliber employees. The compensation program for investment professionals
is designed to reflect their ability to generate long-term investment success
for our clients, including shareholders of the AllianceBernstein Mutual Funds.
Investment professionals do not receive any direct compensation based upon the
investment returns of any individual client account, nor is compensation tied
directly to the level or change in level of assets under management. Investment
professionals' annual compensation is comprised of the following:
(i) Fixed base salary: This is generally the smallest portion of
compensation. The base salary is a relatively low, fixed salary within a similar
range for all investment professionals. The base salary is determined at the
outset of employment based on level of experience, does not change significantly
from year-to-year and hence, is not particularly sensitive to performance.
(ii) Discretionary incentive compensation in the form of an
annual cash bonus: The Adviser's overall profitability determines the total
amount of incentive compensation available to investment professionals. This
portion of compensation is determined subjectively based on qualitative and
quantitative factors. In evaluating this component of an investment
professional's compensation, the Adviser considers the contribution to his/her
team or discipline as it relates to that team's overall contribution to the
long-term investment success, business results and strategy of the Adviser.
Quantitative factors considered include, among other things, relative investment
performance (e.g., by comparison to competitor or peer group funds or similar
styles of investments, and appropriate, broad-based or specific market indices),
and consistency of performance. There are no specific formulas used to determine
this part of an investment professional's compensation and the compensation is
not tied to any pre-determined or specified level of performance. The Adviser
also considers qualitative factors such as the complexity and risk of investment
strategies involved in the style or type of assets managed by the investment
professional; success of marketing/business development efforts and client
servicing; seniority/length of service with the firm; management and supervisory
responsibilities; and fulfillment of the Adviser's leadership criteria.
(iii) Discretionary incentive compensation in the form of awards
under the Adviser's Partners Compensation Plan ("deferred awards"): The
Adviser's overall profitability determines the total amount of deferred awards
available to investment professionals. The deferred awards are allocated among
investment professionals based on criteria similar to those used to determine
the annual cash bonus. There is no fixed formula for determining these amounts.
Deferred awards, for which there are various investment options, vest over a
four-year period and are generally forfeited if the employee resigns or the
Adviser terminates his/her employment. Investment options under the deferred
awards plan include many of the same AllianceBernstein Mutual Funds offered to
mutual fund investors, thereby creating a close alignment between the financial
interests ofthe investment professionals and those of the Adviser's clients and
mutual fund shareholders with respect to the performance of those mutual funds.
The Adviser also permits deferred award recipients to allocate up to 50% of
their award to investments in the Adviser's publicly traded equity
securities.(2)
(2) Prior to 2002, investment professional compensation also included
discretionary long-term incentive in the form of restricted
grants of the Adviser's Master Limited Partnership Units.
(iv) Contributions under the Adviser's Profit Sharing/401(k)
Plan: The contributions are based on the Adviser's overall profitability. The
amount and allocation of the contributions are determined at the sole discretion
of the Adviser.
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.
[Enlarge/Download Table]
PORTFOLIOS
NAME, PRINCIPAL IN FUND OTHER
ADDRESS, DATE OCCUPATION(S) COMPLEX DIRECTORSHIPS
OF BIRTH AND DURING PAST OVERSEEN HELD
(YEAR ELECTED*) 5 YEARS BY DIRECTOR BY DIRECTOR
--------------- ------- ----------- -----------
INTERESTED DIRECTOR
Marc O. Mayer, ** Executive Vice President of 111 SCB Partners Inc.;
1345 Avenue of the Americas the Adviser since 2001, and SCB, Inc.
New York, NY 10105 Executive Managing Director
10/2/1957 of AllianceBernstein
(2003) Investments, Inc. ("ABI")
since 2003; prior thereto,
he was head of
AllianceBernstein
Institutional Investments, a
unit of the Adviser, from
2001-2003. Prior thereto,
Chief Executive Officer of
Sanford C. Bernstein & Co.,
LLC (institutional research
and brokerage arm of
Bernstein & Co. LLC) ("SCB &
Co.") and its predecessor
since prior to 2001.
DISINTERESTED DIRECTORS
Chairman of the Board Investment Adviser and an 113 None
William H. Foulk, Jr., #+ Independent Consultant. He
P.O. Box 5060 was formerly Senior Manager
Greenwich, CT 06831-0505 of Barrett Associates, Inc.,
9/7/1932 a registered investment
(2002) adviser, with which he had
been associated since prior
to 2001. He was formerly
Deputy Comptroller and Chief
Investment Officer of the
State of New York and, prior
thereto, Chief Investment
Officer of the New York Bank
for Savings.
Ruth Block, ***# Formerly, Executive Vice 100 None
500 S.E. Mizner Blvd. President and Chief
Boca Raton, FL 33432 Insurance Officer of The
11/7/1930 Equitable Life Assurance
(2002) Society of the United
States; Chairman and Chief
Executive Officer of Evlico
(insurance); Director of
Avon, BP (oil and gas),
Ecolab Incorporated (specialty
chemicals), Tandem Financial
Group and Donaldson, Lufkin &
Jenrette Securities Corporation;
Governor at Large, National
Association of Securities
Dealers, Inc.
David H. Dievler, # Independent consultant. 112 None
P.O. Box 167 Until December 1994, he was
Spring Lake, NJ 07762 Senior Vice President of AB
10/23/1929 Corp. responsible for mutual
(2002) fund administration. Prior
to joining AB Corp. in 1984,
he was Chief Financial
Officer of Eberstadt Asset
Management since 1968.
Prior to that, he was a
Senior Manager at Price
Waterhouse & Co. Member of
American Institute of
Certified Public Accountants
since 1953.
John H. Dobkin, # Consultant. Formerly 111 None
P.O. Box 12 President of Save Venice,
Annandale, NY 12504 Inc. (preservation
2/19/1942 organization) from
(2002) 2001-2002, Senior Advisor
from June 1999 - June 2000
and President of Historic
Hudson Valley (historic
preservation) from December 1989
to May 1999. Previously,
Director of the National Academy
of Design and during 1988-1992,
Director and Chairman of the
Audit Committee of AB Corp.
Michael J. Downey, # Consultant since January 2004. 111 Asia Pacific Fund,
c/o AllianceBernstein L.P. Formerly managing partner Inc. and The
Attn: Philip L. Kirstein of Lexington Capital, LLC Merger Fund
1345 Avenue of the Americas (investment advisory firm)
New York, NY 10105 from December 1997 until
1/26/1944 December 2003. Prior thereto,
(2005) Chairman and CEO of Prudential
Mutual Fund Management from 1987
to 1993.
D. James Guzy, # Chairman of the Board of PLX 111 Intel Corporation
P.O. Box 128 Technology (semi-conductors) (semi-conductors);
Glenbrook, NV 89413 and of SRC Computers Inc., Cirrus Logic
3/7/1936 with which he has been Corporation
(2005) associated since prior to 2001. (semi-conductors);
He is also President of the Novellus Corporation
Arbor Company (private family (semi-conductor equipment);
investments). Micro Component Technology
(semi-conductor equipment);
the Davis Selected
Advisers Group of Mutual
Funds; and LogicVision
Nancy P. Jacklin, # Formerly, U.S. Executive 111 None
4046 Chancery Court, NW Director of the International
Washington, DC 20007 Monetary Fund (December 2002-
5/22/1948 May 2006); partner, Clifford
(2006) Chance (1992-2002); Senior
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;
member of the Council on
Foreign Relations.
Marshall C. Turner, Jr., # Principal of Turner Venture 111 The George Lucas
220 Montgomery Street Associates (venture capital Educational
Penthouse 10 and consulting) since prior Foundation; and
San Francisco, CA 94104-3402 to 2001. From 2003 until National
10/10/1941 May 31, 2006, he was CEO of Datacast, Inc.
(2005) Toppan Photomasks, Inc.
(semi-conductor
manufacturing services),
Austin, Texas.
----------------
* There is no stated term of office for the Fund's Directors.
** Mr. Mayer is an "interested person", as defined in the 1940 Act,
due to his position as Executive Vice President of the Adviser.
*** Ms. Block was an "interested person", as defined in the 1940
Act, until October 21, 2004 by reason of her ownership of equity
securities of a controlling person of the Adviser. Such
securities were sold for approximately $2,400 on October 21,
2004. Ms. Block received shares of The Equitable Companies
Incorporated ("Equitable") as part of the demutualization of The
Equitable Life Assurance Society of the United States. Her
Equitable shares were subsequently converted through a corporate
action into 116 American Depositary Shares of AXA.
+ Member of the Fair Value Pricing Committee.
# Member of the Audit Committee, the Governance and Nominating
Committee and the Independent Directors Committee.
The Fund's Board of Directors has four standing committees of the
Board -- an Audit Committee, a Governance and Nominating Committee, a Fair Value
Pricing Committee and an Independent Directors Committee. The members of the
Audit, Governance and Nominating, Fair Value Pricing and Independent Directors
Committees are identified above.
The function of the Audit Committee is to assist the Board of
Directors in its oversight of the Fund's financial reporting process. The Audit
Committee met seven times during the Fund's most recently completed fiscal year.
The function of the Governance and Nominating Committee includes the
nomination of persons to fill any vacancies or newly created positions on the
Board of Directors. The Governance and Nominating Committee met seven times
during the Fund's most recently completed fiscal year.
The Governance and Nominating Committee has a charter and, pursuant to
the charter, the Governance and Nominating Committee will consider candidates
for nomination as a director submitted by a shareholder or group of shareholders
who have beneficially owned at least 5% of the Fund's common stock or shares of
beneficial interest for at least two years at the time of submission and who
timely provide specified information about the candidates and the nominating
shareholder or group. To be timely for consideration by the Governance and
Nominating Committee, the submission, including all required information, must
be submitted in writing to the attention of the Secretary at the principal
executive offices of the Fund not less than 120 days before the date of the
proxy statement for the previous year's annual meeting of shareholders. If the
Fund did not hold an annual meeting of shareholders in the previous year, the
submission must be delivered or mailed and received within a reasonable amount
of time before the Fund begins to print and mail its proxy materials. Public
notice of such upcoming annual meeting of shareholders may be given in a
shareholder report or other mailing to shareholders or by other means deemed by
the Governance and Nominating Committee or the Board to be reasonably calculated
to inform shareholders.
Shareholders submitting a candidate for consideration by the
Governance and Nominating Committee must provide the following information to
the Governance and Nominating Committee: (i) a statement in writing setting
forth (A) the name, date of birth, business address and residence address of the
candidate; (B) any position or business relationship of the candidate, currently
or within the preceding five years, with the shareholder or an associated person
of the shareholder as defined below; (C) the class or series and number of all
shares of the Fund owned of record or beneficially by the candidate; (D) any
other information regarding the candidate that is required to be disclosed about
a nominee in a proxy statement or other filing required to be made in connection
with the solicitation of proxies for election of Directors pursuant to Section
20 of the 1940 Act and the rules and regulations promulgated thereunder; (E)
whether the shareholder believes that the candidate is or will be an "interested
person" of the Fund (as defined in the 1940 Act) and, if believed not to be an
"interested person," information regarding the candidate that will be sufficient
for the Fund to make such determination; and (F) information as to the
candidate's knowledge of the investment company industry, experience as a
director or senior officer of public companies, directorships on the boards of
other registered investment companies and educational background; (ii) the
written and signed consent of the candidate to be named as a nominee and to
serve as a Director if elected; (iii) the written and signed agreement of the
candidate to complete a directors' and officers' questionnaire if elected; (iv)
the shareholder's consent to be named as such by the Fund; (v) the class or
series and number of all shares of the Fund owned beneficially and of record by
the shareholder and any associated person of the shareholder and the dates on
which such shares were acquired, specifying the number of shares owned
beneficially but not of record by each, and stating the names of each as they
appear on the Fund's record books and the names of any nominee holders for each;
and (vi) a description of all arrangements or understandings between the
shareholder, the candidate and/or any other person or persons (including their
names) pursuant to which the recommendation is being made by the shareholder.
"Associated Person of the shareholder" means any person who is required to be
identified under clause (vi) of this paragraph and any other person controlling,
controlled by or under common control with, directly or indirectly, (a) the
shareholder or (b) the associated person of the shareholder.
The Governance and Nominating Committee may require the shareholder to
furnish such other information as it may reasonably require or deem necessary to
verify any information furnished pursuant to the nominating procedures described
above or to determine the qualifications and eligibility of the candidate
proposed by the shareholder to serve on the Board. If the shareholder fails to
provide such other information in writing within seven days of receipt of
written request from the Governance and Nominating Committee, the recommendation
of such candidate as a nominee will be deemed not properly submitted for
consideration, and will not be considered, by the Committee.
The Governance and Nominating Committee will consider only one
candidate submitted by such a shareholder or group for nomination for election
at an annual meeting of shareholders. The Governance and Nominating Committee
will not consider self-nominated candidates. The Governance and Nominating
Committee will consider and evaluate candidates submitted by shareholders on the
basis of the same criteria as those used to consider and evaluate candidates
submitted from other sources. These criteria include the candidate's relevant
knowledge, experience, and expertise, the candidate's ability to carry out his
or her duties in the best interests of the Fund, the candidate's ability to
qualify as a disinterested Director and such other criteria as the Governance
and Nominating Committee determines to be relevant in light of the existing
composition of the Board and any anticipated vacancies or other factors.
The function of the Fair Value Pricing Committee is to consider, in
advance if possible, any fair valuation decision of the Adviser's Valuation
Committee relating to a security held by the Fund made under unique or highly
unusual circumstances not previously addressed by the Valuation Committee that
would result in a change in the Fund's NAV by more than $0.01 per share. The
Fair Value Pricing Committee did not meet during the Fund's most recently
completed fiscal year.
The function of the Independent Directors Committee is to consider and
take action on matters that the Board or Committee believes should be addressed
in executive session of the disinterested Directors, such as review and approval
of the Advisory and Distribution Services Agreements. The Independent Directors
Committee met eleven times during the Fund's most recently completed fiscal
year.
The dollar range of the Fund's securities owned by each Director and
the aggregate dollar range of securities of all of the registered investment
companies to which the Adviser provides investment advisory services
(collectively, the "AllianceBernstein Fund Complex") owned by each Director are
set forth below.
AGGREGATE DOLLAR
DOLLAR RANGE OF RANGE OF EQUITY
OF EQUITY SECURITIES IN THE
SECURITIES IN ALLIANCEBERNSTEIN
THE FUND AS OF FUND COMPLEX AS OF
DECEMBER 31, 2005 DECEMBER 31, 2005
----------------- -----------------
Marc O. Mayer None Over $100,000
Ruth Block None Over $100,000
David H. Dievler None Over $100,000
John H. Dobkin None Over $100,000
Michael J. Downey None Over $100,000
William H. Foulk, Jr. None Over $100,000
D. James Guzy None $50,001-$100,000
Nancy P. Jacklin* None None
Marshall C. Turner, Jr. None Over $100,000
-------------------
* Ms. Jacklin was elected as a Director of the Fund on June 14, 2006.
Officer Information
Certain information concerning the Fund's officers is set forth below.
NAME, ADDRESS* POSITION(S) HELD PRINCIPAL OCCUPATION
AND DATE OF BIRTH WITH FUND DURING PAST 5 YEARS
------------------ ------------------- ---------------------
Marc O. Mayer, President and Chief See biography above.
10/2/1957 Executive Officer
Michael R. Baldwin, Senior Vice President Senior Vice President of the
2/26/1958 Adviser,** with which he has
been associated since prior
to 2001.
Norman M. Fidel, Senior Vice President Senior Vice President of the
9/17/1945 Adviser,** with which he has
been associated since prior
to 2001.
Philip L. Kirstein, Senior Vice President Senior Vice President and
5/29/1945 and Independent Independent Compliance
Compliance Officer Officer of the
AllianceBernstein Funds,
with which he has been
associated since October
2004. Prior thereto, he was
Of Counsel to Kirkpatrick &
Lockhart, LLP from October
2003 to October 2004, and
General Counsel of Merrill
Lynch Investment Managers,
L.P. since prior to 2001
until March 2003.
Paul C. Rissman, Senior Vice President Executive Vice President of
11/10/1956 the Adviser,** with which he
has been associated since
prior to 2001.
Thomas J. Bardong, Vice President Senior Vice President of the
4/28/1945 Adviser,** with which he has
been associated since prior
to 2001.
Russell Brody, Vice President Vice President of the
11/14/1966 Adviser,** with which he has
been associated since prior
to 2001.
Scott E. McElroy Vice President Senior Vice President of the
3/17/1965 Adviser, ** with which he
has been associated since
prior to 2001.
Siobhan F. McManus Vice President Senior Vice President of the
4/20/1962 Adviser, ** with which she
has been associated since
prior to 2001.
Daniel Nordby Vice President Senior Vice President of the
4/27/1944 Adviser,** with which he has
been associated since prior
to 2001.
Thomas A. Schmitt, Vice President Senior Vice President of the
7/13/1957 Adviser,** with which he has
been associated since prior
to 2001.
Jane E. Schneirov, Vice President Senior Vice President of the
3/26/1970 Adviser,** with which she
has been associated since
2001.
Francis X. Suozzo, Vice President Senior Vice President of the
5/31/1957 Adviser,** with which he has
been associated since prior
to 2001.
Janet A. Walsh, Vice President Senior Vice President of the
2/2/1962 Adviser,** with which she
has been associated since
prior to 2001.
Christopher M. Toub, Vice President Executive Vice President of
6/15/1959 the Adviser, ** with which
he has been associated since
prior to 2001.
Joseph J. Mantineo, Treasurer and Chief Senior Vice President of
3/28/1959 Financial Officer ABIS,** with which he has
been associated since prior
to 2001.
Vincent S. Noto, Controller Vice President of ABIS,**
12/14/1964 with which he has been
associated since prior to
2001.
Emilie D. Wrapp, Secretary Senior Vice President,
11/13/1955 Assistant General Counsel
and Assistant Secretary of
ABI,** with which she has
been associated since prior
to 2001.
-------------------
* The address for each of the Fund's officers is 1345 Avenue of the
Americas, New York, NY 10105.
** The Adviser, ABI, ABIS and SCB & Co. are affiliates of the Fund.
The Fund does not pay any fees to, or reimburse expenses of, its
Directors who are considered "interested persons" of the Fund. The aggregate
compensation paid by the Fund to each of the Directors during its fiscal year
ended June 30, 2006, the aggregate compensation paid to each of the Directors
during calendar year 2005 by the AllianceBernstein Fund Complex and the total
number of registered investment companies (and separate investment portfolios
within those companies) in the AllianceBernstein Fund Complex with respect to
which each of the Directors serves as a director or trustee, are set forth
below. Neither the Fund nor any other registered investment company in the
AllianceBernstein Fund Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees. Each of the Directors
is a director or trustee of one or more other registered investment companies in
the AllianceBernstein Fund Complex.
Total
Total Number of
Number Investment
of Funds Portfolios
in the Within the
Alliance- Alliance-
Bernstein Bernstein
Total Fund Fund
Compensation Complex, Complex,
From the Including Including
Alliance- the Fund, the Fund,
Bernstein as to as to
Aggregate Fund which the which the
Compensation Complex Director is Director is
From the Including a Director a Director
Name of Director Fund the Fund or Trustee or Trustee
---------------- ---- -------- ---------- ----------
Marc O. Mayer $ 0 $ 0 41 111
Ruth Block $[______] $241,625 30 100
David H. Dievler $[______] $269,125 42 112
John H. Dobkin $[______] $263,125 41 111
Michael J. Downey $[______] $240,625 41 111
William H. Foulk, Jr. $[______] $487,625 43 113
D. James Guzy $[______] $ 32,000 41 111
Nancy P. Jacklin $ 0 $ 0 41 111
Marshall C. Turner, Jr. $[______] $ 28,500 41 111
As of October [___], 2006, the Directors and officers of the Fund as a
group owned less than 1% of the shares of the Fund.
-------------------------------------------------------------------------------
EXPENSES OF THE FUND
-------------------------------------------------------------------------------
Distribution Services Agreement
-------------------------------
The Fund has entered into a Distribution Services Agreement (the
"Agreement") with ABI, the Fund's principal underwriter , to permit ABI to
distribute the Fund's shares and to permit the Fund to pay distribution services
fees to defray expenses associated with the distribution of its Class A, Class
B, Class C, Class R and Class K shares in accordance with a plan of distribution
that is included in the Agreement and has been duly adopted and approved in
accordance with Rule 12b-1 under the 1940 Act (the "Rule 12b-1 Plan").
During the Fund's fiscal year ended June 30, 2006, the Fund paid
distribution services fees for expenditures under the Agreement, with respect to
Class A shares, in amounts aggregating $[________________] which constituted
..30%, annualized, of the Fund's aggregate average daily net assets attributable
to Class A shares during the period, and the Adviser made payments from its own
resources as described above aggregating $[________________]. Of the
$[________________] paid by the Fund and the Adviser under the Rule 12b-1 Plan
with respect to the Class A shares, $[________________] was spent on
advertising, $[________________] on the printing and mailing of prospectuses for
persons other than current shareholders, $[________________] for compensation to
broker-dealers and other financial intermediaries (including $[________________]
to ABI), $[________________] for compensation to sales personnel,
$[________________] was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses.
During the Fund's fiscal year ended June 30, 20056 the Fund paid
distribution services fees for expenditures under the Agreement, with respect to
Class B shares, in amounts aggregating $[________________] which constituted
1.00%, annualized, of the Fund's aggregate average daily net assets attributable
to Class B shares during the period, and the Adviser made payments from its own
resources as described above aggregating $[________________]. Of the
$[________________] paid by the Fund and the Adviser under Rule 12b-1 Plan with
respect to the Class B shares, $[________________] was spent on advertising,
$[________________] on the printing and mailing of prospectuses for persons
other than current shareholders, $[________________] for compensation to
broker-dealers and other financial intermediaries (including $[________________]
to ABI), $[________________] for compensation to sales personnel,
$[________________] was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses and
$[________________] was spent on interest on Class B shares financing.
During the Fund's fiscal year ended June 30, 2006, the Fund paid
distribution services fees for expenditures under the Agreement, with respect to
Class C shares, in amounts aggregating $[________________] which constituted
1.00%, annualized, of the Fund's aggregate average daily net assets attributable
to Class C shares during the period, and the Adviser made payments from its own
resources as described above aggregating $[________________]. Of the
$[________________] paid by the Fund and the Adviser under Rule 12b-1 Plan with
respect to the Class C shares, $[________________] was spent on advertising,
$[________________] on the printing and mailing of prospectuses for persons
other than current shareholders, $[________________] for compensation to
broker-dealers and other financial intermediaries (including $[________________]
to ABI), $[________________] for compensation to sales personnel,
$[________________] was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses, $[________________]
was spent on interest on Class C shares financing.
During the Fund's fiscal year ended June 30, 2006, the Fund paid
distribution services fees for expenditures under the Agreement, with respect to
Class R shares, in amounts aggregating $[________________] which constituted
..50%, annualized, of the Fund's aggregate average daily net assets attributable
to Class R shares during the period, and the Adviser made payments from its own
resources as described above aggregating $[________________]. Of the
$[________________] paid by the Fund and the Adviser under Rule 12b-1 Plan with
respect to the Class R shares, $[________________] was spent on advertising,
$[________________] on the printing and mailing of prospectuses for persons
other than current shareholders, $[________________] for compensation to
broker-dealers and other financial intermediaries (including $[________________]
to ABI), $[________________] for compensation to sales personnel,
$[________________] was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses, $[________________]
was spent on interest on Class R shares financing.
During the Fund's fiscal year ended June 30, 2006, the Fund paid
distribution services fees for expenditures under the Agreement, with respect to
Class K shares, in amounts aggregating $[________________] which constituted
..25%, annualized, of the Fund's aggregate average daily net assets attributable
to Class K shares during the period, and the Adviser made payments from its own
resources as described above aggregating $[________________]. Of the
$[________________] paid by the Fund and the Adviser under Rule 12b-1 Plan with
respect to the Class K shares, $[________________] was spent on advertising,
$[________________] on the printing and mailing of prospectuses for persons
other than current shareholders, $[________________] for compensation to
broker-dealers and other financial intermediaries (including $[________________]
to ABI), $[________________] for compensation to sales personnel,
$[________________] was spent on printing of sales literature, travel,
entertainment, due diligence and other promotional expenses, $[________________]
was spent on interest on Class K shares financing.
Distribution services fees are accrued daily and paid monthly and are
charged as expenses of the Fund as accrued. The distribution services fees
attributable to the Class B shares, Class C shares, Class R shares and Class K
shares are designed to permit an investor to purchase such shares through
broker-dealers without the assessment of an initial sales charge, and at the
same time to permit ABI to compensate broker-dealers in connection with the sale
of such shares. In this regard the purpose and function of the combined
contingent deferred sales charge ("CDSC") and distribution services fees on the
Class B shares and Class C shares and the distribution services fees on the
Class R shares and Class K shares are the same as those of the initial sales
charge and/or distribution services fee with respect to the Class A shares in
that in each case the sales charge and/or distribution services fee provide for
the financing of the distribution of the relevant class of the Fund's shares.
With respect to Class A shares of the Fund, distribution expenses
accrued by ABI in one fiscal year may not be paid from distribution services
fees received from the Fund in subsequent fiscal years. ABI's compensation with
respect to Class B, Class C, Class R and Class K shares under the Rule 12b-1
Plan is directly tied to the expenses incurred by ABI. Actual distribution
expenses for Class B, Class C, Class R and Class K shares for any given year,
however, will probably exceed the distribution services fee payable under the
Rule 12b-1 Plan with respect to the class involved and, in the case of Class B
and Class C shares payments received from CDSCs. The excess will be carried
forward by ABI and reimbursed from distribution services fees payable under the
Rule 12b-1 Plan with respect to the class involved and, in the case of Class B
and Class C shares, payments subsequently received through CDSCs, so long as the
Rule 12b-1 Plan is in effect.
Unreimbursed distribution expenses incurred as of the end of the
Fund's most recently completed fiscal year, and carried over for reimbursement
in future years in respect of the Class B, Class C, Class R, and Class K shares
of the Fund were, respectively, $[___________] ([_______]% of the net assets of
Class B), $[___________] ([_______]% of the net assets of Class C),
$[___________] ([_______]% of the net assets of Class R), and $[___________]
([_______]% of the net assets of Class K).
The Rule 12b-1 Plan is in compliance with rules of the National
Association of Securities Dealers, Inc. (the "NASD"), which effectively limit
the annual asset-based sales charges and service fees that a mutual fund may pay
on a class of shares to .75% and .25%, respectively, of the average annual net
assets attributable to that class. The rules also limit the aggregate of all
front-end, deferred and asset-based sales charges imposed with respect to a
class of shares by a mutual fund that also charges a service fee to 6.25% of
cumulative gross sales of shares of that class, plus interest at the prime rate
plus 1% per annum.
In approving the Rule 12b-1 Plan, the Directors of the Fund determined
that there was a reasonable likelihood that the Rule 12b-1 Plan would benefit
the Fund and its shareholders. The distribution services fee of a particular
class will not be used to subsidize the provision of distribution services with
respect to any other class.
The Adviser may from time to time and from its own funds or such other
resources as may be permitted by rules of the Commission make payments for
distribution services to ABI; the latter may in turn pay part or all of such
compensation to brokers or other persons for their distribution assistance.
The Agreement was initially approved by the Directors of the Fund at a
meeting held on July 9, 2002. The Agreement will continue in effect provided
that such continuance is specifically approved at least annually by the
Directors of the Fund or by vote of the holders of a majority of the outstanding
voting securities (as defined in the 1940 Act) of that class, and, in either
case, by a majority of the Directors of the Fund who are not parties to the
Agreement or interested persons, as defined in the 1940 Act, of any such party
(other than as directors of the Fund) and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 Plan or any agreement
related thereto. Most recently, continuance of the Agreement was approved for an
additional annual term by a vote, cast in person, of the Directors, including a
majority of the Directors who are not "interested persons" as defined in the
1940 Act, at their meeting held on [___________________].
In the event that the Rule 12b-1 Plan is terminated by either party or
not continued with respect to the Class A shares, Class B shares, Class C
shares, Class R shares or Class K shares, (i) no distribution services fees
(other than current amounts accrued but not yet paid) would be owed by the Fund
to ABI with respect to that class, and (ii) the Fund would not be obligated to
pay ABI for any amounts expended under the Agreement not previously recovered by
ABI from distribution services fees in respect of shares of such class or
through deferred sales charges.
Transfer Agency Agreement
-------------------------
ABIS, an indirect wholly-owned subsidiary of the Adviser located
principally at 500 Plaza Drive, Secaucus, NJ 07094 and with operations at 8000
IH 10 W, 4th Floor, San Antonio, Texas 78230, receives a transfer agency fee per
account holder of each of the Class A shares, Class B shares, Class C shares,
Class R shares, Class K shares, Class I shares and Advisor Class shares of the
Fund, plus reimbursement for out-of-pocket expenses. The transfer agency fee
with respect to the Class B and Class C shares is higher than the transfer
agency fee with respect to the Class A, Class R, Class K, Class I and Advisor
Class shares, reflecting the additional costs associated with the Class B and
Class C CDSCs. For the fiscal year ended June 30, 2006, the Fund paid ABIS
$[_____________________] pursuant to the Transfer Agency Agreement.
ABIS acts as the transfer agent for the Fund. ABIS registers the
transfer, issuance and redemption of Fund shares and disburses dividends and
other distributions to Fund shareholders.
Many Fund shares are owned by selected dealers or selected agents, as
defined below, financial intermediaries or other financial representatives
("financial intermediaries") for the benefit of their customers. In those cases,
the Fund often does not maintain an account for you. Thus, some or all of the
transfer agency functions for these accounts are performed by the financial
intermediaries. The Fund, ABI and/or the Adviser pay to these financial
intermediaries, including those that sell shares of the AllianceBernstein Mutual
Funds, fees for sub-transfer agency and related recordkeeping services in
amounts ranging up to $19 per customer fund account per annum. Retirement plans
may also hold Fund shares in the name of the plan, rather than the participant.
Plan recordkeepers, who may have affiliated financial intermediaries who sell
shares of the Fund, may be paid for each plan participant fund account in
amounts up to $19 per account per annum and/or up to 0.25% per annum of the
average daily assets held in the plan. To the extent any of these payments for
recordkeeping services, transfer agency services or retirement plan accounts are
made by the Fund, they are included in your Prospectus in the Fund expense
tables under "Fees and Expenses of the Funds." In addition, financial
intermediaries may be affiliates of entities that receive compensation from the
Adviser or ABI for maintaining retirement plan "platforms" that facilitate
trading by affiliated and non-affiliated financial intermediaries and
recordkeeping for retirement plans.
Because financial intermediaries and plan recordkeepers may be paid
varying amounts per class for sub-transfer agency and related recordkeeping
services, the service requirements of which may also vary by class, this may
create an additional incentive for financial intermediaries and their financial
advisors to favor one fund complex over another or one class of shares over
another.
Code of Ethics and Proxy Voting Policies and Procedures
-------------------------------------------------------
The Fund, the Adviser and ABI have each adopted codes of ethics
pursuant to Rule 17j-1 of the 1940 Act. These codes of ethics permit personnel
subject to the codes to invest in securities, including securities that may be
purchased or held by the Fund.
The Fund has adopted the Adviser's proxy voting policies and
procedures. The Adviser's proxy voting policies and procedures are attached as
Appendix A.
Information regarding how the Fund voted proxies related to portfolio
securities during the most recent 12-month period ended June 30 is available (1)
without charge, upon request, by calling (800) 227-4618; or on or through the
Fund's website at www.AllianceBernstein.com; or both; and (2) on the
Commission's website at www.sec.gov.
-------------------------------------------------------------------------------
PURCHASE OF SHARES
-------------------------------------------------------------------------------
The following information supplements that set forth in your
Prospectus under the heading "Investing in the Funds."
General
-------
Shares of the Fund are offered on a continuous basis at a price equal
to their NAV plus an initial sales charge at the time of purchase ("Class A
shares"), with a CDSC ("Class B shares"), without any initial sales charge and,
as long as the shares are held for one year or more, without any CDSC ("Class C
shares"), to group retirement plans, as defined below, eligible to purchase
Class R shares, without any initial sales charge or CDSC ("Class R shares"), to
group retirement plans eligible to purchase Class K shares without any initial
sales charge or CDSC ("Class K shares"), to group retirement plans and certain
investment advisory clients of, and certain other persons associated with, the
Adviser and its affiliates eligible to purchase Class I shares, without any
initial sales charge or CDSC ("Class I shares"), or, to investors eligible to
purchase Advisor Class shares, without any initial sales charge or CDSC
("Advisor Class shares"), in each case as described below. "Group retirement
plans" are defined as 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase pension plans, defined benefit plans, and
non-qualified deferred compensation plans where plan level or omnibus account
are held on the books of the Fund. All of the classes of shares of the Fund,
except Class I and Advisor Class shares, are subject to Rule 12b-1 asset-based
sales charges. Shares of the Fund that are offered subject to a sales charge are
offered through (i) investment dealers that are members of the NASD and have
entered into selected dealer agreements with ABI ("selected dealers"), (ii)
depository institutions and other financial intermediaries, or their affiliates,
that have entered into selected agent agreements with ABI ("selected agents")
and (iii) ABI.
Investors may purchase shares of the Fund either through financial
intermediaries or directly through ABI. A transaction, service, administrative
or other similar fee may be charged by your financial intermediary with respect
to the purchase, sale or exchange of shares made through the financial
intermediary. Such financial intermediary may also impose requirements with
respect to the purchase, sale or exchange of shares that are different from, or
in addition to, those imposed by the Fund, including requirements as to classes
of shares available through that financial intermediary and the minimum initial
and subsequent investment amounts. The Fund is not responsible for, and has no
control over, the decision of any financial intermediary, to impose such
differing requirements. Sales personnel of financial intermediaries distributing
the Fund's shares may receive differing compensation for selling different
classes of shares.
In order to open your account, the Fund or your financial intermediary
is required to obtain certain information from you for identification purposes.
This information may include name, date of birth, permanent residential address
and social security/taxpayer identification number. It will not be possible to
establish your account without this information. If the Fund or your financial
intermediary is unable to verify the information provided, your account may be
closed and other appropriate action may be taken as permitted by law.
The Fund's Board of Directors has adopted policies and procedures
designed to detect and deter frequent purchases and redemptions of Fund shares
or excessive or short-term trading that may disadvantage long-term Fund
shareholders. These policies are described below. The Fund reserves the right to
restrict, reject or cancel, without any prior notice, any purchase or exchange
order for any reason, including any purchase or exchange order accepted by any
shareholder's financial intermediary.
Risks Associated With Excessive Or Short-term Trading Generally. While
the Fund will try to prevent market timing by utilizing the procedures described
below, these procedures may not be successful in identifying or stopping
excessive or short-term trading in all circumstances. By realizing profits
through short-term trading, shareholders that engage in rapid purchases and
sales or exchanges of the Fund's shares dilute the value of shares held by
long-term shareholders. Volatility resulting from excessive purchases and sales
or exchanges of Fund shares, especially involving large dollar amounts, may
disrupt efficient portfolio management. In particular, the Fund may have
difficulty implementing its long-term investment strategies if it is forced to
maintain a higher level of its assets in cash to accommodate significant
short-term trading activity. Excessive purchases and sales or exchanges of the
Fund's shares may force the Fund to sell portfolio securities at inopportune
times to raise cash to accommodate short-term trading activity. In addition, the
Fund may incur increased expenses if one or more shareholders engage in
excessive or short-term trading. For example, the Fund may be forced to
liquidate investments as a result of short-term trading and incur increased
brokerage costs and realization of taxable capital gains without attaining any
investment advantage. Similarly, the Fund may bear increased administrative
costs due to asset level and investment volatility that accompanies patterns of
short-term trading activity. All of these factors may adversely affect Fund
performance.
Significant investments in foreign securities may be particularly
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time the Fund
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a shareholder engaging in a short-term trading strategy
to exploit differences in Fund share prices that are based on closing prices of
foreign securities established some time before the Fund calculates its own
share price (referred to as "time zone arbitrage"). The Fund has procedures,
referred to as fair value pricing, designed to adjust closing market prices of
foreign securities to reflect what is believed to be the fair value of those
securities at the time the Fund calculates its NAV. While there is no assurance,
the Fund expects that the use of fair value pricing, in addition to the
short-term trading policies discussed below, will significantly reduce a
shareholder's ability to engage in time zone arbitrage to the detriment of other
Fund shareholders.
Investments in other types of securities may also be susceptible to
short-term trading strategies. These investments include securities that are,
among other things, thinly traded, traded infrequently, or relatively illiquid,
which have the risk that the current market price for the securities may not
accurately reflect current market values. A shareholder may seek to engage in
short-term trading to take advantage of these pricing differences (referred to
as "price arbitrage"). Investments in small cap securities, technology and other
specific industry sector securities, and in certain fixed-income securities,
such as high yield bonds, asset-backed securities, or municipal bonds may be
adversely affected by price arbitrage trading strategies.
Policy Regarding Short-term Trading. Purchases and exchanges of shares
of the Fund should be made for investment purposes only. The Fund seeks to
prevent patterns of excessive purchases and sales or exchanges of Fund shares.
The Fund will seek to prevent such practices to the extent they are detected by
the procedures described below. The Fund reserves the right to modify this
policy, including any surveillance or account blocking procedures established
from time to time to effectuate this policy, at any time without notice.
o Transaction Surveillance Procedures. The Fund, through its agents, ABI
and ABIS, maintains surveillance procedures to detect excessive or
short-term trading in Fund shares. This surveillance process involves
several factors, which include scrutinizing transactions in Fund
shares that exceed certain monetary thresholds or numerical limits
within a specified period of time. Generally, more than two exchanges
of Fund shares during any 90-day period or purchases of shares
followed by a sale within 90 days will be identified by these
surveillance procedures. For purposes of these transaction
surveillance procedures, the Fund may consider trading activity in
multiple accounts under common ownership, control, or influence.
Trading activity identified by either, or a combination, of these
factors, or as a result of any other information available at the
time, will be evaluated to determine whether such activity might
constitute excessive or short-term trading. These surveillance
procedures may be modified from time to time, as necessary or
appropriate to improve the detection of excessive or short-term
trading or to address specific circumstances, such as for certain
retirement plans, to conform to plan exchange limits or U.S.
Department of Labor regulations, or for certain automated or
pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.
o Account Blocking Procedures. If the Fund determines, in its sole
discretion, that a particular transaction or pattern of transactions
identified by the transaction surveillance procedures described above
is excessive or short-term trading in nature, the relevant Fund
account(s) will be immediately "blocked" and no future purchase or
exchange activity will be permitted. However, sales of Fund shares
back to the Fund or redemptions will continue to be permitted in
accordance with the terms of the Fund's current Prospectuses. In the
event an account is blocked, certain account-related privileges, such
as the ability to place purchase, sale and exchange orders over the
internet or by phone, may also be suspended. A blocked account will
generally remain blocked unless and until the account holder or the
associated financial intermediary provides evidence or assurance
acceptable to the Fund that the account holder did not or will not in
the future engage in excessive or short-term trading.
o Applications of Surveillance Procedures and Restrictions to Omnibus
Accounts. Omnibus account arrangements are common forms of holding
shares of the Fund, particularly among certain financial
intermediaries, including sponsors of retirement plans and variable
insurance products. The Fund seeks to apply its surveillance
procedures to these omnibus account arrangements. If a financial
intermediary does not have the capabilities, or declines, to provide
individual account level detail to the Fund, the Fund will monitor
turnover of assets to purchases and redemptions of the omnibus
account. If excessive turnover, defined as annualized purchases and
redemptions exceeding 50% of assets is detected, the Fund will notify
the financial intermediary and request that the financial intermediary
review individual account transactions for excessive or short-term
trading activity and confirm to the Fund that appropriate action has
been taken to curtail the activity, which may include applying blocks
to accounts to prohibit future purchases and exchanges of Fund shares.
For certain retirement plan accounts, the Fund may request that the
retirement plan or other intermediary revoke the relevant
participant's privilege to effect transactions in Fund shares via the
internet or telephone, in which case the relevant participant must
submit future transaction orders via the U.S. Postal Service (i.e.,
regular mail). The Fund will continue to monitor the turnover
attributable to a financial intermediary's omnibus account arrangement
and may consider whether to terminate the relationship if the
intermediary does not demonstrate that appropriate action has been
taken.
Risks to Shareholders Resulting From Imposition of Account Blocks in
Response to Excessive Short-term Trading Activity. A shareholder identified as
having engaged in excessive or short-term trading activity whose account is
"blocked" and who may not otherwise wish to redeem his or her shares effectively
may be "locked" into an investment in the Fund that the shareholder did not
intend to hold on a long-term basis or that may not be appropriate for the
shareholder's risk profile. To rectify this situation, a shareholder with a
"blocked" account may be forced to redeem Fund shares, which could be costly if,
for example, these shares have declined in value, the shareholder recently paid
a front-end sales charge or the shares are subject to a CDSC, or the sale
results in adverse tax consequences to the shareholder. To avoid this risk, a
shareholder should carefully monitor the purchases, sales, and exchanges of Fund
shares and avoid frequent trading in Fund shares.
Limitations on Ability to Detect and Curtail Excessive Trading
Practices. Shareholders seeking to engage in excessive short-term trading
activities may deploy a variety of strategies to avoid detection and, despite
the efforts of the Fund and its agents to detect excessive or short duration
trading in Fund shares, there is no guarantee that the Fund will be able to
identify these shareholders or curtail their trading practices. In particular,
the Fund may not be able to detect excessive or short-term trading in Fund
shares attributable to a particular investor who effects purchase and/or
exchange activity in Fund shares through omnibus accounts. Also, multiple tiers
of these entities may exist, each utilizing an omnibus account arrangement,
which may further compound the difficulty of detecting excessive or short
duration trading activity in Fund shares.
The Fund reserves the right to suspend the sale of its shares to the
public in response to conditions in the securities markets or for other reasons.
If the Fund suspends the sale of its shares, shareholders will not be able to
acquire its shares, including through an exchange.
The public offering price of shares of the Fund is their NAV, plus, in
the case of Class A shares, a sales charge. On each Fund business day on which a
purchase or redemption order is received by the Fund and trading in the types of
securities in which the Fund invests might materially affect the value of Fund
shares, the NAV is computed as of the next close of regular trading on the
Exchange (currently 4:00 p.m. Eastern time) by dividing the value of the Fund's
total assets, less its liabilities, by the total number of its shares then
outstanding. A Fund business day is any day on which the Exchange is open for
trading.
The respective NAVs of the various classes of shares of the Fund are
expected to be substantially the same. However, the NAVs of the Class B, Class C
and Class R shares will generally be slightly lower than the NAVs of the Class
A, Class K, Class I and Advisor Class shares as a result of the differential
daily expense accruals of the higher distribution and, in some cases, transfer
agency fees applicable with respect to those classes of shares.
The Fund will accept unconditional orders for its shares to be
executed at the public offering price equal to their NAV next determined (plus
applicable Class A sales charges), as described below. Orders received by ABI
prior to the close of regular trading on the Exchange on each day the Exchange
is open for trading are priced at the NAV computed as of the close of regular
trading on the Exchange on that day (plus applicable Class A sales charges). In
the case of orders for purchase of shares placed through financial
intermediaries, the applicable public offering price will be the NAV as so
determined, but only if the financial intermediary receives the order prior to
the close of regular trading on the Exchange. The financial intermediary is
responsible for transmitting such orders by a prescribed time to the Fund or its
transfer agent. If the financial intermediary fails to do so, the investor will
not receive that day's NAV. If the financial intermediary receives the order
after the close of regular trading on the Exchange, the price received by the
investor will be based on the NAV determined as of the close of regular trading
on the Exchange on the next day it is open for trading.
Following the initial purchase of Fund shares, a shareholder may place
orders to purchase additional shares by telephone if the shareholder has
completed the appropriate portion of the Subscription Application or an
"Autobuy" application obtained by calling the "For Literature" telephone number
shown on the cover of this SAI. Except with respect to certain omnibus accounts,
telephone purchase orders with payment by electronic funds transfer may not
exceed $500,000. Payment for shares purchased by telephone can be made only by
electronic funds transfer from a bank account maintained by the shareholder at a
bank that is a member of the National Automated Clearing House Association
("NACHA"). Telephone purchase requests must be received before 4:00 p.m. Eastern
time on a Fund business day to receive that day's public offering price.
Telephone purchase requests received after 4:00 p.m. Eastern time are
automatically placed the following Fund business day, and the applicable public
offering price will be the public offering price determined as of the close of
business on such following business day.
Full and fractional shares are credited to a shareholder's account in
the amount of his or her subscription. As a convenience, and to avoid
unnecessary expense to the Fund, the Fund will not issue stock certificates
representing shares of the Fund. Ownership of the Fund's shares will be shown on
the books of the Fund's transfer agent. Lost certificates will not be replaced
with another certificate, but will be shown on the books of the Fund's transfer
agent. This facilitates later redemption and relieves the shareholder of the
responsibility for and inconvenience of lost or stolen certificates.
Each class of shares of the Fund represents an interest in the same
portfolio of investments of the Fund, has the same rights and is identical in
all respects, except that (i) Class A shares bear the expense of the initial
sales charge (or CDSC, when applicable) and Class B shares and Class C shares
bear the expense of the CDSC, (ii) Class B shares, Class C shares and Class R
shares each bear the expense of a higher distribution services fee than that
borne by Class A shares and Class K shares, and Class I shares and Advisor Class
shares do not bear such a fee, (iii) Class B shares and Class C shares bear
higher transfer agency costs than those borne by Class A, Class R, Class K,
Class I and Advisor Class shares, (iv) Class B and Advisor Class shares are
subject to a conversion feature, and will convert to Class A shares under
certain circumstances, and (v) each of Class A, Class B, Class C, Class R and
Class K shares has exclusive voting rights with respect to provisions of the
Rule 12b-1 Plan pursuant to which its distribution services fee is paid and
other matters for which separate class voting is appropriate under applicable
law, provided that, if the Fund submits to a vote of the Class A shareholders,
an amendment to the Rule 12b-1 Plan that would materially increase the amount to
be paid thereunder with respect to the Class A shares, then such amendment will
also be submitted to the Class B and Advisor Class shareholders, because the
Class B and Advisor Class shares convert to class A shares under certain
circumstances, and the Class A, Class B and Advisor Class shareholders will vote
separately by class. Each class has different exchange privileges and certain
different shareholder service options available.
The Directors of the Fund have determined that currently no conflict
of interest exists between or among the classes of shares of the Fund. On an
ongoing basis, the Directors of the Fund, pursuant to their fiduciary duties
under the 1940 Act and state law, will seek to ensure that no such conflict
arises.
Alternative Purchase Arrangements
---------------------------------
Classes A, B and C Shares. Class A, Class B and Class C shares have
the following alternative purchase arrangements: Class A shares are generally
offered with an initial sales charge, Class B shares are generally offered with
a CDSC and Class C shares are sold to investors choosing the asset-based sales
charge alternative. Special purchase arrangements are available for group
retirement plans. See "Alternative Purchase Arrangements -- Group Retirement
Plans," below. These alternative purchase arrangements permit an investor to
choose the method of purchasing shares that is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares and
other circumstances. Investors should consider whether, during the anticipated
life of their investment in the Fund, the accumulated distribution services fee
and CDSC on Class B shares prior to conversion, or the accumulated distribution
services fee and CDSC on Class C shares, would be less than the initial sales
charge and accumulated distribution services fee on Class A shares purchased at
the same time, and to what extent such differential would be offset by the
higher return of Class A shares. Class A shares will normally be more beneficial
than Class B shares to the investor who qualifies for reduced initial sales
charges on Class A shares, as described below. In this regard, ABI will reject
any order (except orders from certain group retirement plans) for more than
$100,000 for Class B shares (see "Alternative Purchase Arrangements - Group
Retirement Plans"). Class C shares will normally not be suitable for the
investor who qualifies to purchase Class A shares at NAV. For this reason, ABI
will reject any order for more than $1,000,000 for Class C shares.
Class A shares are subject to a lower distribution services fee and,
accordingly, pay correspondingly higher dividends per share than Class B shares
or Class C shares. However, because initial sales charges are deducted at the
time of purchase, most investors purchasing Class A shares would not have all
their funds invested initially and, therefore, would initially own fewer shares.
Investors not qualifying for reduced initial sales charges who expect to
maintain their investment for an extended period of time might consider
purchasing Class A shares because the accumulated continuing distribution
charges on Class B shares or Class C shares may exceed the initial sales charge
on Class A shares during the life of the investment. Again, however, such
investors must weigh this consideration against the fact that, because of such
initial sales charges, not all their funds will be invested initially.
Other investors might determine, however, that it would be more
advantageous to purchase Class B shares or Class C shares in order to have all
their funds invested initially, although remaining subject to higher continuing
distribution charges and being subject to a CDSC for a four-year and one-year
period, respectively. For example, based on current fees and expenses, an
investor subject to the 4.25% initial sales charge on Class A shares would have
to hold his or her investment approximately seven years for the Class C
distribution services fee to exceed the initial sales charge plus the
accumulated distribution services fee of Class A shares. In this example, an
investor intending to maintain his or her investment for a longer period might
consider purchasing Class A shares. This example does not take into account the
time value of money, which further reduces the impact of the Class C
distribution services fees on the investment, fluctuations in NAV or the effect
of different performance assumptions.
Those investors who prefer to have all of their funds invested
initially but may not wish to retain Fund shares for the four-year period during
which Class B shares are subject to a CDSC may find it more advantageous to
purchase Class C shares.
During the Fund's fiscal years ended June 30, 2006, 2005 and 2004, the
aggregate amount of underwriting commission payable with respect to the shares
of the Fund was $[_____________], $21,808 and $27,620, respectively. Of that
amount, ABI received the amount of $[_____________], $1,984 and $1,462,
respectively, representing that portion of the sales charges paid on shares of
the Fund sold during the year which was not reallowed to selected dealers (and
was accordingly, retained by ABI). During the Fund's fiscal years ended June 30,
2006, 2005 and 2004, ABI received CDSCs of $[____________], $0 and $0,
respectively, on Class A shares, $[____________], $282 and $0, respectively, on
Class B shares and $[____________], $9 and $0, respectively, on Class C shares.
Class A Shares. The public offering price of Class A shares is the NAV
plus a sales charge, as set forth below.
Sales Charge
Discount or
As % Commission
As % of the to Dealers or
of Net Public Agents of up to
Amount Offering % of Offering
Amount of Purchase Invested Price Price
------------------ -------- ----- -----
Up to $100,000.............. 4.44% 4.25% 4.00%
$100,000 up to $250,000...... 3.36 3.25 3.00
$250,000 up to $500,000...... 2.30 2.25 2.00
$500,000 up to $1,000,000*... 1.78 1.75 1.50
----------
* There is no initial sales charge on transactions of $1,000,000 or more.
All or a portion of the initial sales charge may be paid to your
financial representative. With respect to purchases of $1,000,000 or more, Class
A shares redeemed within one year of purchase may be subject to a CDSC of up to
1%. The CDSC on Class A shares will be waived on certain redemptions, as
described below under "--Contingent Deferred Sales Charge."
No initial sales charge is imposed on Class A shares issued (i)
pursuant to the automatic reinvestment of income dividends or capital gains
distributions, (ii) in exchange for Class A shares of other "AllianceBernstein
Mutual Funds" (as that term is defined under "Combined Purchase Privilege"
below), except that an initial sales charge will be imposed on Class A shares
issued in exchange for Class A shares of AllianceBernstein Exchange Reserves
that were purchased for cash without the payment of an initial sales charge and
without being subject to a CDSC, or (iii) upon the automatic conversion of Class
B shares or Advisor Class shares as described below under "Class B Shares --
Conversion Feature" and "--Conversion of Advisor Class Shares to Class A
Shares." The Fund receives the entire NAV of its Class A shares sold to
investors. ABI's commission is the sales charge shown above less any applicable
discount or commission "reallowed" to selected dealers and agents. ABI will
reallow discounts to selected dealers and agents in the amounts indicated in the
table above. In this regard, ABI may elect to reallow the entire sales charge to
selected dealers and agents for all sales with respect to which orders are
placed with ABI. A selected dealer who receives reallowance in excess of 90% of
such a sales charge may be deemed to be an "underwriter" under the Securities
Act.
In addition to the circumstances described above, certain types of
investors may be entitled to pay no initial sales charge in certain
circumstances described below.
Class A Shares - Sales at NAV. The Fund may sell its Class A
shares at NAV (i.e., without any initial sales charge) to certain categories of
investors including:
(i) investment management clients of the Adviser or its affiliates,
including clients and prospective clients of the Adviser's
AllianceBernstein Institutional Investment Management division;
(ii) officers and present or former Directors of the Fund or other
investment companies managed by the Adviser, officers,
directors and present or retired full-time employees and former
employees (for subsequent investment in accounts established
during the course of their employment) of the Adviser, ABI,
ABIS and their affiliates; officers, directors and present and
full-time employees of selected dealers or agents; or the
spouse, sibling, direct ancestor or direct descendant
(collectively, "relatives") of any such person; or any trust,
individual retirement account or retirement plan account for
the benefit of any such person;
(iii) the Adviser, ABI, ABIS and their affiliates; certain employee
benefit plans for employees of the Adviser, ABI, ABIS and their
affiliates;
(iv) persons participating in a fee-based program, sponsored and
maintained by a registered broker-dealer or other financial
intermediary and approved by ABI, under which such persons pay
an asset-based fee for service in the nature of investment
advisory or administrative services; and
(v) certain retirement plan accounts as described under
"Alternative Purchase Arrangements-Group Retirement Plans."
Class B Shares. Investors may purchase Class B shares at the public
offering price equal to the NAV per share of the Class B shares on the date of
purchase without the imposition of a sales charge at the time of purchase. The
Class B shares are sold without an initial sales charge so that the Fund will
receive the full amount of the investor's purchase payment.
Conversion Feature. Eight years after the end of the calendar month in
which the shareholder's purchase order was accepted, Class B shares will
automatically convert to Class A shares and will no longer be subject to a
higher distribution services fee. Such conversion will occur on the basis of the
relative NAVs of the two classes, without the imposition of any sales load, fee
or other charge. The purpose of the conversion feature is to reduce the
distribution services fee paid by holders of Class B shares that have been
outstanding long enough for ABI to have been compensated for distribution
expenses incurred in the sale of the shares.
For purposes of conversion to Class A, Class B shares purchased
through the reinvestment of dividends and distributions paid in respect of Class
B shares in a shareholder's account will be considered to be held in a separate
sub-account. Each time any Class B shares in the shareholder's account (other
than those in the sub-account) convert to Class A shares, an equal pro-rata
portion of the Class B shares in the sub-account will also convert to Class A
shares.
The conversion of Class B shares to Class A shares is subject to the
continuing availability of an opinion of counsel to the effect that the
conversion of Class B shares to Class A shares does not constitute a taxable
event under federal income tax law. The conversion of Class B shares to Class A
shares may be suspended if such an opinion is no longer available at the time
such conversion is to occur. In that event, no further conversions of Class B
shares would occur, and shares might continue to be subject to the higher
distribution services fee for an indefinite period which may extend beyond the
period ending eight years after the end of the calendar month in which the
shareholder's purchase order was accepted.
Class C Shares. Investors may purchase Class C shares at the public
offering price equal to the NAV per share of the Class C shares on the date of
purchase without the imposition of a sales charge either at the time of purchase
or, as long as the shares are held for one year or more, upon redemption. Class
C shares are sold without an initial sales charge so that the Fund will receive
the full amount of the investor's purchase payment and, as long as the shares
are held for one year or more, without a CDSC so that the investor will receive
as proceeds upon redemption the entire NAV of his or her Class C shares. The
Class C distribution services fee enables the Fund to sell Class C shares
without either an initial sales charge or CDSC, as long as the shares are held
for one year or more. Class C shares do not convert to any other class of shares
of the Fund and incur higher distribution services fees than Class A shares, and
will thus have a higher expense ratio and pay correspondingly lower dividends
than Class A shares.
Contingent Deferred Sales Charge. Class B shares that are redeemed
within four years of purchase will be subject to a CDSC at the rates set forth
below charged as a percentage of the dollar amount subject thereto. Class A
share purchases of $1,000,000 or more and Class C shares that are redeemed
within one year of purchase will be subject to a CDSC of 1%. The charge will be
assessed on an amount equal to the lesser of the cost of the shares being
redeemed or their NAV at the time of redemption. Accordingly, no sales charge
will be imposed on increases in NAV above the initial purchase price. In
addition, no charge will be assessed on shares derived from reinvestment of
dividends or capital gains distributions.
To illustrate, assume that an investor purchased 10,000 Class B shares
at $10 per share (at a cost of $100,000) and in the second year after purchase,
the NAV per share is $12 and, during such time, the investor has acquired 1,000
additional Class B shares upon dividend reinvestment. If at such time the
investor makes his or her first redemption of 5,000 Class B shares (proceeds of
$60,000), 1,000 Class B shares will not be subject to the charge because of
dividend reinvestment. With respect to the remaining 4,000 Class B shares, the
charge is applied only to the original cost of $10 per share and not to the
increase in NAV of $2 per share. Therefore, $40,000 of the $60,000 redemption
proceeds will be charged at a rate of 3.0% (the applicable rate in the second
year after purchase as set forth below).
For Class B shares, the amount of the CDSC, if any, will vary
depending on the number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares.
Contingent Deferred
Sales Charge for the
Fund as a % of Dollar
Year Since Purchase Amount Subject to Charge
------------------- ------------------------
First 4.00%
Second 3.00%
Third 2.00%
Fourth 1.00%
Fifth and Thereafter None
In determining the CDSC applicable to a redemption of Class B and
Class C shares, it will be assumed that the redemption is, first, of any shares
that are not subject to a CDSC (for example, because the shares were acquired
upon the reinvestment of dividends or distributions) and, second, of shares held
longest during the time they are subject to the sales charge. When shares
acquired in an exchange are redeemed, the applicable CDSC and conversion
schedules will be the schedules that applied at the time of the purchase of
shares of the corresponding class of the AllianceBernstein Mutual Fund
originally purchased by the shareholder.
Proceeds from the CDSC are paid to ABI and are used by ABI to defray
the expenses of ABI related to providing distribution-related services to the
Fund in connection with the sale of Fund shares, such as the payment of
compensation to selected dealers and agents for selling Fund shares. The
combination of the CDSC and the distribution services fee enables the Fund to
sell shares without a sales charge being deducted at the time of purchase.
The CDSC is waived on redemptions of shares (i) following the death or
disability, as defined in the Code, of a shareholder, (ii) to the extent that
the redemption represents a minimum required distribution from an individual
retirement account or other retirement plan to a shareholder that has attained
the age of 70 1/2, (iii) that had been purchased by present or former Directors
of the Fund, by the relative of any such person, by any trust, individual
retirement account or retirement plan account for the benefit of any such person
or relative, or by the estate of any such person or relative, (iv) pursuant to,
and in accordance with, a systematic withdrawal plan (see "Sales Charge
Reduction Programs - Systematic Withdrawal Plan" below), (v) to the extent that
the redemption is necessary to meet a plan participant's or beneficiary's
request for a distribution or loan from a group retirement plan or to
accommodate a plan participant's or beneficiary's direction to reallocate his or
her plan account among other investment alternatives available under a group
retirement plan, (vi) for Class C shares, sold through programs offered by
financial intermediaries and approved by ABI, where such programs offer only
shares that are not subject to a CDSC, where the financial intermediary
establishes a single omnibus account for the Fund, and where no advance
commission is paid to any financial intermediary in connection with the purchase
of such shares or (vii) for permitted exchanges of shares.
Class R Shares. Class R shares are offered only to group retirement
plans that have plan assets of up to $10 million. Class R shares are not
available to retail non-retirement accounts, traditional or Roth IRAs, Coverdell
Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b) plans
and to AllianceBernstein sponsored retirement products. Class R shares incur a
..50% distribution services fee and thus have a higher expense ratio than Class A
shares, Class K shares and Class I shares and pay correspondingly lower
dividends than Class A shares, Class K shares and Class I shares.
Class K Shares. Class K shares are available at NAV to group
retirement plans that have plan assets of at least $1 million. Class K shares
generally are not available to retail non-retirement accounts, traditional and
ROTH IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs,
individual 403(b) plans and AllianceBernstein sponsored retirement products.
Class K shares do not have an initial sales charge or CDSC but incur a .25%
distribution services fee and thus (i) have a lower expense ratio than Class R
shares and pay correspondingly higher dividends than Class R shares and (ii)
have a higher expense ratio than Class I shares and pay correspondingly lower
dividends than Class I shares.
Class I Shares. Class I shares are available at NAV to all group
retirement plans that have plan assets in excess of $10 million and to certain
investment advisory clients of, and certain other persons associated with, the
Adviser and its affiliates. Class I shares generally are not available to retail
non-retirement accounts, traditional and ROTH IRAs, Coverdell Education Savings
Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b) plans and
AllianceBernstein sponsored retirement products. Class I shares do not incur any
distribution services fees and will thus have a lower expense ratio and pay
correspondingly higher dividends than Class R and Class K shares.
Advisor Class Shares. Advisor Class shares of the Fund may be
purchased and held solely (i) through accounts established under fee-based
programs, sponsored and maintained by registered broker-dealers or other
financial intermediaries and approved by ABI, (ii) through defined contribution
employee benefit plans (e.g., 401(k) plans) that have at least $10 million in
assets and are purchased directly by the plan without the involvement of a
financial intermediary, or (iii) by the categories of investors described in
clauses (i) through (iv) under "Class A Shares - Sales at NAV" (other than
officers, directors and present and full-time employees of selected dealers or
agents, or relatives of such person, or any trust, individual retirement account
or retirement plan account for the benefit of such relative, none of whom is
eligible on the basis solely of such status to purchase and hold Advisor Class
shares). Generally, a fee-based program must charge an asset-based or other
similar fee and must invest at least $250,000 in Advisor Class shares of the
Fund in order to be approved by ABI for investment in Advisor Class shares. A
transaction fee may be charged by your financial intermediary with respect to
the purchase, sale or exchange of Advisor Class shares made through such
financial intermediary. Advisor Class shares do not incur any distribution
services fees, and will thus have a lower expense ratio and pay correspondingly
higher dividends than Class A, Class B, Class C, Class R or Class K shares.
Conversion of Advisor Class Shares to Class A Shares. Advisor Class
shares may be held solely through the fee-based program accounts, employee
benefit plans, qualified state tuition programs and registered investment
advisory or other financial intermediary relationships described above under
"Purchase of Shares--Advisor Class Shares," and by investment advisory clients
of, and certain other persons associated with the Adviser and its affiliates or
the Fund. If (i) a holder of Advisor Class shares ceases to participate in the
fee-based program or plan that satisfies the requirements to purchase shares set
forth under "Purchase of Shares--Advisor Class Shares" or (ii) the holder is
otherwise no longer eligible to purchase Advisor Class shares as described in
the Prospectuses and this SAI (each, a "Conversion Event"), then all Advisor
Class shares held by the shareholder will convert automatically to Class A
shares of the Fund during the calendar month following the month in which the
Fund is informed of the occurrence of the Conversion Event. The Fund will
provide the shareholder with at least 30 days' notice of the conversion. The
failure of a shareholder or a fee-based program to satisfy the minimum
investment requirements to purchase Advisor Class shares will not constitute a
Conversion Event. The conversion would occur on the basis of the relative NAVs
of the two classes and without the imposition of any sales load, fee or other
charge. Class A shares currently bear a .30% distribution services fee. Advisor
Class shares do not have any distribution services fee. As a result, Class A
shares have a higher expense ratio and may pay correspondingly lower dividends
and have a lower NAV than Advisor Class shares.
The conversion of Advisor Class shares to Class A shares is subject to
the continuing availability of an opinion of counsel to the effect that the
conversion of Advisor Class shares to Class A shares does not constitute a
taxable event under federal income tax law. The conversion of Advisor Class
shares to Class A shares may be suspended if such an opinion is no longer
available at the time such conversion is to occur. In that event, the Advisor
Class shareholder would be required to redeem his Advisor Class shares, which
would constitute a taxable event under federal income tax law.
Alternative Purchase Arrangements - Group Retirement Plans
----------------------------------------------------------
The Fund offers special distribution arrangements for group retirement
plans. However, plan sponsors, plan fiduciaries and other financial
intermediaries may establish requirements as to the purchase, sale or exchange
of shares of the Fund, including maximum and minimum initial investment
requirements, that are different from those described in this SAI. Group
retirement plans also may not offer all classes of shares of the Fund. In order
to enable participants investing through group retirement plans to purchase
shares of the Fund, the maximum and minimum investment amounts may be different
for shares purchased through group retirement plans from those described herein.
In addition, the Class A and Class B CDSC may be waived for investments made
through certain group retirement plans. Therefore, plan sponsors or fiduciaries
may not adhere to these share class eligibility standards as set forth in the
Prospectus and this SAI. The Fund is not responsible for, and has no control
over, the decision of any plan sponsor or fiduciary to impose such differing
requirements.
Class A Shares. Class A shares are available at NAV to all
AllianceBernstein sponsored group retirement plans, regardless of size, and to
the AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan assets or 100
or more employees. ABI measures the asset levels and number of employees in
these plans once monthly. Therefore, if a plan that is not initially eligible
for Class A shares meets the asset level or number of employees required for
Class A eligibility, ABI may not initially fill orders with Class A shares if an
order is received prior to its monthly measurement of assets and employees. If
the plan terminates the Fund as an investment option within one year, then all
plan purchases of Class A shares will be subject to a 1%, 1-year CDSC on
redemption. Class A shares are also available at NAV to group retirement plans
with plan assets in excess of $10 million. The 1%, 1-year CDSC also generally
applies. However, the 1%, 1-year CDSC may be waived if the financial
intermediary agrees to waive all commissions or other compensation paid in
connection with the sale of such shares (typically up to a 1% advance payment
for sales of Class A shares at NAV) other than the service fee paid pursuant to
the Fund's Rule 12b-1 Plan.
Class B Shares. Class B shares are generally not available for
purchase by group retirement plans. However, Class B shares may continue to be
purchased by group retirement plans that have already selected Class B shares as
an investment alternative under their plan prior to September 2, 2003.
Class C Shares. Class C shares are available to AllianceBernstein
Link, AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans
with less than $250,000 in plan assets and less than 100 employees. If an
AllianceBernstein Link, AllianceBernstein Individual 401(k) or AllianceBernstein
SIMPLE IRA plan holding Class C shares becomes eligible to purchase Class A
shares at NAV, the plan sponsor or other appropriate fiduciary of such plan may
request ABI in writing to liquidate the Class C shares and purchase Class A
shares with the liquidation proceeds. Any such liquidation and repurchase may
not occur before the expiration of the 1-year period that begins on the date of
the plan's last purchase of Class C shares.
Class R Shares. Class R shares are available to certain group
retirement plans with plan assets of up to $10 million. Class R shares are not
subject to front-end sales charge or CDSC, but are subject to a .50%
distribution fee.
Class K Shares. Class K shares are available to certain group
retirement plans with plan assets of at least $1 million. Class K shares are not
subject to a front-end sales charge or CDSC, but are subject to a .25%
distribution fee.
Class I Shares. Class I shares are available to certain group
retirement plans with plan assets of at least $10 million and certain
institutional clients of the Adviser who invest at least $2 million in a Fund.
Class I shares are not subject to a front-end sales charge, CDSC or a
distribution fee.
Choosing a Class of Shares for Group Retirement Plans. Plan sponsors,
plan fiduciaries and other financial intermediaries may establish requirements
as to the purchase, sale or exchange of shares of the Fund, including maximum
and minimum initial investment requirements, that are different from those
described in this SAI. Plan fiduciaries should consider how these requirements
differ from the Fund's share class eligibility criteria before determining
whether to invest.
It is expected that the Fund will eventually offer only Class R, Class
K and Class I shares to group retirement plans. Currently, the Fund also makes
its Class A shares available at NAV to group retirement plans with plan assets
in excess of $10 million. Unless waived under the circumstances described above,
a 1%, 1-year CDSC applies to the sale of Class A shares by a plan. Because Class
K shares have no CDSC and lower 12b-1 distribution fees and Class I shares have
no CDSC and Rule 12b-1 distribution fees, plans should consider purchasing Class
K or Class I shares, if eligible, rather than Class A shares.
In selecting among the Class A, Class K and Class R shares, plans
purchasing shares through a financial intermediary that is not willing to waive
advance commission payments (and therefore are not eligible for the waiver of
the 1%, 1-year CDSC applicable to Class A shares) should weigh the following:
o the lower Rule 12b-1 distribution fees (0.30%) and the 1%, 1-year
CDSC with respect to Class A shares;
o the higher Rule 12b-1 distribution fees (0.50%) and the absence
of a CDSC with respect to Class R shares; and
o the lower Rule 12b-1 distribution fees (0.25%) and the absence of
a CDSC with respect to Class K shares.
Because Class A and Class K shares have lower Rule 12b-1 distribution
fees than Class R shares, plans should consider purchasing Class A or Class K
shares, if eligible, rather than Class R shares.
As described above, while Class B shares are generally not available
to group retirement plans, Class B shares are available for continuing
contributions from plans that have already selected Class B shares as an
investment option under their plans prior to September 2, 2003. Plans should
weigh the fact that Class B shares will convert to Class A shares after a period
of time against the fact that Class A, Class R, Class K and Class I shares have
lower expenses, and therefore higher returns, than Class B shares, before
determining which class to make available to its plan participants.
Sales Charge Reduction Programs
-------------------------------
The AllianceBernstein Mutual Funds offer shareholders various programs
through which shareholders may obtain reduced sales charges or reductions in
CDSC through participation in such programs. In order for shareholders to take
advantage of the reductions available through the combined purchase privilege,
rights of accumulation and letters of intent, the Fund must be notified by the
shareholder or his or her financial intermediary that they qualify for such a
reduction. If the Fund is not notified that a shareholder is eligible for these
reductions, the Fund will be unable to ensure that the reduction is applied to
the shareholder's account.
Combined Purchase Privilege. Shareholders may qualify for the sales
charge reductions by combining purchases of shares of the Fund into a single
"purchase." By combining such purchases, shareholders may be able to take
advantage of the quantity discounts described under "Alternative Purchase
Arrangements - Class A Shares." A "purchase" means a single purchase or
concurrent purchases of shares of the Fund or any other AllianceBernstein Mutual
Fund, including AllianceBernstein Institutional Funds, by (i) an individual, his
or her spouse, or the individual's children under the age of 21 years purchasing
shares of the Fund for his, her or their own account(s), including certain
CollegeBoundfund accounts; (ii) a single purchase by a trustee or other
fiduciary purchasing shares for a single trust, estate or single fiduciary
account with one or more beneficiaries involved; or (iii) a single purchase for
the employee benefit plans of a single employer. The term "purchase" also
includes purchases by any "company," as the term is defined in the 1940 Act, but
does not include purchases by any such company that has not been in existence
for at least six months or that has no purpose other than the purchase of shares
of the Fund or shares of other registered investment companies at a discount.
The term "purchase" does not include purchases by any group of individuals whose
sole organizational nexus is that the participants therein are credit card
holders of a company, policy holders of an insurance company, customers of
either a bank or broker-dealer or clients of an investment adviser.
Currently, the AllianceBernstein Mutual Funds include:
AllianceBernstein Balanced Shares, Inc.
AllianceBernstein Blended Style Series, Inc.
-AllianceBernstein 2000 Retirement Strategy
-AllianceBernstein 2005 Retirement Strategy
-AllianceBernstein 2010 Retirement Strategy
-AllianceBernstein 2015 Retirement Strategy
-AllianceBernstein 2020 Retirement Strategy
-AllianceBernstein 2025 Retirement Strategy
-AllianceBernstein 2030 Retirement Strategy
-AllianceBernstein 2035 Retirement Strategy
-AllianceBernstein 2040 Retirement Strategy
-AllianceBernstein 2045 Retirement Strategy
-U.S. Large Cap Portfolio
AllianceBernstein Bond Fund, Inc.
-AllianceBernstein Corporate Bond Portfolio
-AllianceBernstein Intermediate Bond Portfolio
-AllianceBernstein U.S. Government Portfolio
AllianceBernstein Cap Fund, Inc.
-AllianceBernstein Small Cap Growth Portfolio
AllianceBernstein Emerging Market Debt Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Focused Growth & Income Fund, Inc.
AllianceBernstein Global Government Income Trust, Inc.
AllianceBernstein Global Health Care Fund, Inc.
AllianceBernstein Global Research Growth Fund, Inc.
AllianceBernstein Global Strategic Income Trust, Inc.
AllianceBernstein Global Technology Fund, Inc.
AllianceBernstein Greater China '97 Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein High Yield Fund, Inc.
AllianceBernstein International Growth Fund, Inc.
AllianceBernstein International Research Growth Fund, Inc.
AllianceBernstein Large Cap Growth Fund, Inc.
AllianceBernstein Mid-Cap Growth Fund, Inc.
AllianceBernstein Municipal Income Fund, Inc.
-California Portfolio
-Insured California Portfolio
-Insured National Portfolio
-National Portfolio
-New York Portfolio
AllianceBernstein Municipal Income Fund II
-Arizona Portfolio
-Florida Portfolio
-Massachusetts Portfolio
-Michigan Portfolio
-Minnesota Portfolio
-New Jersey Portfolio
-Ohio Portfolio
-Pennsylvania Portfolio
-Virginia Portfolio
AllianceBernstein Real Estate Investment Fund, Inc.
AllianceBernstein Trust
-AllianceBernstein Global Value Fund
-AllianceBernstein International Value Fund
-AllianceBernstein Small/Mid Cap Value Fund
-AllianceBernstein Value Fund
AllianceBernstein Utility Income Fund, Inc.
The AllianceBernstein Portfolios
-AllianceBernstein Balanced Wealth Strategy
-AllianceBernstein Growth Fund
-AllianceBernstein Tax-Managed Balanced Wealth Strategy
-AllianceBernstein Tax-Managed Wealth Appreciation Strategy
-AllianceBernstein Tax-Managed Wealth Preservation Strategy
-AllianceBernstein Wealth Appreciation Strategy
-AllianceBernstein Wealth Preservation Strategy
Sanford C. Bernstein Fund, Inc.
-Intermediate California Municipal Portfolio
-Intermediate Diversified Municipal Portfolio
-Intermediate New York Municipal Portfolio
-International Portfolio
-Short Duration Portfolio
-Tax-Managed International Portfolio
Prospectuses for the AllianceBernstein Mutual Funds may be obtained
without charge by contacting ABIS at the address or the "For Literature"
telephone number shown on the front cover of this SAI.
Cumulative Quantity Discount (Right of Accumulation). An investor's
purchase of additional Class A shares of the Fund may be combined with the value
of the shareholder's existing accounts, thereby enabling the shareholder to take
advantage of the quantity discounts described under "Alternative Purchase
Arrangements - Class A Shares." In such cases, the applicable sales charge on
the newly purchased shares will be based on the total of:
(i) the investor's current purchase;
(ii) the NAV (at the close of business on the previous day) of (a) all
shares of the Fund held by the investor and (b) all shares held
by the investor of any other AllianceBernstein Mutual Fund,
including AllianceBernstein Institutional Funds and certain
CollegeBoundfund accounts for which the investor, his or her
spouse, or child under the age of 21 is the participant; and
(iii) the NAV of all shares described in paragraph (ii) owned by
another shareholder eligible to combine his or her purchase with
that of the investor into a single "purchase" (see above).
For example, if an investor owned shares of an AllianceBernstein
Mutual Fund worth $200,000 at their then current NAV and, subsequently,
purchased Class A shares of the Fund worth an additional $100,000, the initial
sales charge for the $100,000 purchase would be at the 2.25% rate applicable to
a single $300,000 purchase of shares of the Fund, rather than the 3.25% rate.
Letter of Intent. Class A investors may also obtain the quantity
discounts described under "Alternative Purchase Arrangements - Class A Shares"
by means of a written Letter of Intent, which expresses the investor's intention
to invest at least $100,000 in Class A shares of the Fund or any
AllianceBernstein Mutual Fund within 13 months . Each purchase of shares under a
Letter of Intent will be made at the public offering price or prices applicable
at the time of such purchase to a single transaction of the dollar amount
indicated in the Letter of Intent. At the investor's option, a Letter of Intent
may include purchases of shares of the Fund or any other AllianceBernstein
Mutual Fund made not more than 90 days prior to the date that the investor signs
the Letter of Intent, in which case the 13-month period during which the Letter
of Intent is in effect will begin on the date of that earliest purchase to be
included. However, sales charges will not be reduced for purchases made prior to
the date the Letter of Intent is signed.
Investors qualifying for the Combined Purchase Privilege described
above may purchase shares of the AllianceBernstein Mutual Funds under a single
Letter of Intent. For example, if at the time an investor signs a Letter of
Intent to invest at least $100,000 in Class A shares of the Fund, the investor
and the investor's spouse each purchase shares of the Fund worth $20,000 (for a
total of $40,000), it will only be necessary to invest a total of $60,000 during
the following 13 months in shares of the Fund or any other AllianceBernstein
Mutual Fund, to qualify for the 3.25% sales charge on the total amount being
invested (the sales charge applicable to an investment of $100,000).
The Letter of Intent is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intent is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow (while remaining registered in the name of
the investor) to secure payment of the higher sales charge applicable to the
shares actually purchased if the full amount indicated is not purchased, and
such escrowed shares will be involuntarily redeemed at their then NAV to pay the
additional sales charge, if necessary. Dividends on escrowed shares, whether
paid in cash or reinvested in additional Fund shares, are not subject to escrow.
When the full amount indicated has been purchased, the escrow will be released.
Investors wishing to enter into a Letter of Intent in conjunction with
their initial investment in Class A shares of the Fund can obtain a form of
Letter of Intent by contacting ABIS at the address or telephone numbers shown on
the cover of this SAI.
Reinstatement Privilege. A shareholder who has redeemed any or all of
his or her Class A or Class B shares of the Fund may reinvest all or any portion
of the proceeds from that redemption in Class A shares of any AllianceBernstein
Mutual Fund at NAV without any sales charge, provided that (i) such reinvestment
is made within 120 calendar days after the redemption or repurchase date, and
(ii) for Class B shares, a CDSC has been paid and ABI has approved, at its
discretion, the reinstatement of such shares. Shares are sold to a reinvesting
shareholder at the NAV next determined as described above. A reinstatement
pursuant to this privilege will not cancel the redemption or repurchase
transaction; therefore, any gain or loss so realized will be recognized for
federal income tax purposes except that no loss will be recognized to the extent
that the proceeds are reinvested in shares of the Fund within 30 calendar days
after the redemption or repurchase transaction. Investors may exercise the
reinstatement privilege by written request sent to the Fund at the address shown
on the cover of this SAI.
Dividend Reinvestment Program. Shareholders may elect to have all
income and capital gains distributions from their account paid to them in the
form of additional shares of the same class of the Fund pursuant to the Fund's
Dividend Reinvestment Program. No initial sales charge or CDSC will be imposed
on shares issued pursuant to the Dividend Reinvestment Program. Shares issued
under this program will have an aggregate NAV as of the close of business on the
declaration date of the dividend or distribution equal to the cash amount of the
distribution. Investors wishing to participate in the Dividend Reinvestment
Program should complete the appropriate section of the Subscription Application.
Current shareholders should contact ABIS to participate in the Dividend
Reinvestment Program.
In certain circumstances where a shareholder has elected to receive
dividends and/or capital gain distributions in cash but the account has been
determined to be lost due to mail being returned to us by the Postal Service as
undeliverable, such shareholder's distributions option will automatically be
placed within the Dividend Reinvestment Program for future distributions. No
interest will accrue on amounts represented by uncashed distribution checks.
Dividend Direction Plan. A shareholder who already maintains accounts
in more than one AllianceBernstein Mutual Fund may direct that income dividends
and/or capital gains paid by one AllianceBernstein Mutual Fund be automatically
reinvested, in any amount, without the payment of any sales or service charges,
in shares of the same class of the other AllianceBernstein Mutual Fund(s).
Further information can be obtained by contacting ABIS at the address or the
"For Literature" telephone number shown on the cover of this SAI. Investors
wishing to establish a dividend direction plan in connection with their initial
investment should complete the appropriate section of the Subscription
Application. Current shareholders should contact ABIS to establish a dividend
direction plan.
Systematic Withdrawal Plan
--------------------------
General. Any shareholder who owns or purchases shares of the Fund
having a current NAV of at least $5,000 may establish a systematic withdrawal
plan under which the shareholder will periodically receive a payment in a stated
amount of not less than $50 on a selected date. The $5,000 account minimum does
not apply to a shareholder owning shares through an individual retirement
account or other retirement plan who has attained the age of 70 1/2 who wishes
to establish a systematic withdrawal plan to help satisfy a required minimum
distribution. Systematic withdrawal plan participants must elect to have their
dividends and distributions from the Fund automatically reinvested in additional
shares of the Fund.
Shares of the Fund owned by a participant in the Fund's systematic
withdrawal plan will be redeemed as necessary to meet withdrawal payments and
such payments will be subject to any taxes applicable to redemptions and, except
as discussed below with respect to Class A, Class B and Class C shares, any
applicable CDSC. Shares acquired with reinvested dividends and distributions
will be liquidated first to provide such withdrawal payments and thereafter
other shares will be liquidated to the extent necessary, and depending upon the
amount withdrawn, the investor's principal may be depleted. A systematic
withdrawal plan may be terminated at any time by the shareholder or the Fund.
Withdrawal payments will not automatically end when a shareholder's
account reaches a certain minimum level. Therefore, redemptions of shares under
the plan may reduce or even liquidate a shareholder's account and may subject
the shareholder to the Fund's involuntary redemption provisions. See "Redemption
and Repurchase of Shares -- General." Purchases of additional shares
concurrently with withdrawals are undesirable because of sales charges
applicable when purchases are made. While an occasional lump-sum investment may
be made by a holder of Class A shares who is maintaining a systematic withdrawal
plan, such investment should normally be an amount equivalent to three times the
annual withdrawal or $5,000, whichever is less.
Payments under a systematic withdrawal plan may be made by check or
electronically via the Automated Clearing House ("ACH") network. Investors
wishing to establish a systematic withdrawal plan in conjunction with their
initial investment in shares of the Fund should complete the appropriate portion
of the Subscription Application, while current Fund shareholders desiring to do
so can obtain an application form by contacting ABIS at the address or the "For
Literature" telephone number shown on the cover of this SAI.
CDSC Waiver for Class A Shares, Class B Shares and Class C Shares.
Under the systematic withdrawal plan, up to 1% monthly, 2% bi-monthly or 3%
quarterly of the value at the time of redemption of the Class A, Class B or
Class C shares in a shareholder's account may be redeemed free of any CDSC.
Class B shares that are not subject to a CDSC (such as shares acquired
with reinvested dividends or distributions) will be redeemed first and will
count toward the foregoing limitations. Remaining Class B shares that are held
the longest will be redeemed next. Redemptions of Class B shares in excess of
the foregoing limitations will be subject to any otherwise applicable CDSC.
With respect to Class A and Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing limitations.
Redemptions in excess of those limitations will be subject to any otherwise
applicable CDSC.
Payments to Financial Advisors and Their Firms
----------------------------------------------
Financial intermediaries market and sell shares of the Fund. These
financial intermediaries employ financial advisors and receive compensation for
selling shares of the Fund. This compensation is paid from various sources,
including any sales charge, CDSC and/or Rule 12b-1 fee that you or the Fund may
pay. Your individual financial advisor may receive some or all of the amounts
paid to the financial intermediary that employs him or her.
In the case of Class A shares, all or a portion of the initial sales
charge that you pay may be paid by ABI to financial intermediaries selling Class
A shares. ABI may also pay these financial intermediaries a fee of up to 1% on
purchases of $1 million or more. Additionally, up to 100% of the Rule 12b-1 fees
applicable to Class A shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class A shares.
In the case of Class B shares, ABI may pay, at the time of your
purchase, a commission to financial intermediaries selling Class B shares in an
amount equal to 4% of your investment. Additionally, up to 30% of the Rule 12b-1
fees applicable to Class B shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class B shares.
In the case of Class C shares, ABI may pay, at the time of your
purchase, a commission to firms selling Class C shares in an amount equal to 1%
of your investment. Additionally, up to 100% of the Rule 12b-1 fee applicable to
Class C shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class C shares.
In the case of Class R shares, up to 100% of the Rule 12b-1 fee
applicable to Class R shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class R shares.
In the case of Class K shares, up to 100% of the Rule 12b-1 fee
applicable to Class K shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class K shares.
In the case of Advisor Class shares, your financial advisor may charge
ongoing fees or transactional fees. ABI may pay a portion of "ticket" or other
transactional charges.
Your financial advisor's firm receives compensation from the Fund, ABI
and/or the Adviser in several ways from various sources, which include some or
all of the following:
o upfront sales commissions
o 12b-1 fees
o additional distribution support
o defrayal of costs for educational seminars and training
o payments related to providing shareholder record-keeping and/or
transfer agency services
Please read your Prospectus carefully for information on this
compensation.
Other Payments for Distribution Services and Educational Support
----------------------------------------------------------------
In addition to the commissions paid to financial intermediaries
at the time of sale and the fees described under "Asset-Based Sales Charges or
Distribution and/or Service (Rule 12b-1) Fees," in your Prospectus, some or all
of which may be paid to financial intermediaries (and, in turn, to your
financial advisor), ABI, at its expense, currently provides additional payments
to firms that sell shares of the AllianceBernstein Mutual Funds. Although the
individual components may be higher and the total amount of payments made to
each qualifying firm in any given year may vary, the total amount paid to a
financial intermediary in connection with the sale of shares of the
AllianceBernstein Mutual Funds will generally not exceed the sum of (a) 0.25% of
the current year's fund sales by that firm and (b) 0.10% of average daily net
assets attributable to that firm over the year. These sums include payments to
reimburse directly or indirectly the costs incurred by these firms and their
employees in connection with educational seminars and training efforts about the
AllianceBernstein Mutual Funds for the firms' employees and/or their clients and
potential clients. The costs and expenses associated with these efforts may
include travel, lodging, entertainment and meals.
For 2006, ABI's additional payments to these firms for distribution
services and educational support related to the AllianceBernstein Mutual Funds
is expected to be approximately 0.04% of the average monthly assets of the
AllianceBernstein Mutual Funds, or approximately $18 million. In 2005, ABI paid
approximately 0.04% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $18 million for distribution services and
educational support related to the AllianceBernstein Mutual Funds.
A number of factors are considered in determining the additional
payments, including each firm's AllianceBernstein Mutual Fund sales, assets and
redemption rates, and the willingness and ability of the firm to give ABI access
to its financial advisors for educational and marketing purposes. In some cases,
firms will include the AllianceBernstein Mutual Funds on a "preferred list."
ABI's goal is to make the financial advisors who interact with current and
prospective investors and shareholders more knowledgeable about the
AllianceBernstein Mutual Funds so that they can provide suitable information and
advice about the funds and related investor services.
The Fund and ABI also make payments for recordkeeping and other
transfer agency services to financial intermediaries that sell AllianceBernstein
Mutual Fund shares. Please see "Expenses of the Fund - Transfer Agency
Agreement" above. These expenses paid by the Fund are included in "Other
Expenses" under "Fees and Expenses of the Funds - Annual Fund Operating
Expenses" in your Prospectus.
If one mutual fund sponsor makes greater distribution assistance
payments than another, your financial advisor and his or her firm may have an
incentive to recommend one fund complex over another. Similarly, if your
financial advisor or his or her firm receives more distribution assistance for
one share class versus another, then they may have an incentive to recommend
that class.
Please speak with your financial advisor to learn more about the total
amounts paid to your financial advisor and his or her firm by the Fund, the
Adviser, ABI and by sponsors of other mutual funds he or she may recommend to
you. You should also consult disclosures made by your financial advisor at the
time of purchase.
ABI anticipates that the firms that will receive additional payments
for distribution services and/or educational support include:
A.G. Edwards
AIG Advisor Group
Ameriprise Financial Services
AXA Advisors
Banc of America
Bank One Securities Corp.
BNY Investment Center
Charles Schwab
Chase Investment Services
Citicorp Investment Services
Citigroup Global Markets
Commonwealth Financial Network
Donegal Securities
Independent Financial Marketing Group
ING Advisors Network
Lincoln Financial Advisors
Linsco/Private Ledger
McDonald Investments
Merrill Lynch
Met Life Securities
Morgan Stanley
Mutual Service Corporation
National Financial
PFS Investments
Piper Jaffray
Raymond James
RBC Dain Rauscher
Robert W. Baird
Securities America
Signator Investors
UBS AG
UBS Financial Services
Uvest Financial Services
Wachovia Securities
Wells Fargo Investments
Although the Fund may use brokers and dealers who sell shares of the
Fund to effect portfolio transactions, the Fund does not consider the sale of
AllianceBernstein Mutual Fund shares as a factor when selecting brokers or
dealers to effect portfolio transactions.
-------------------------------------------------------------------------------
REDEMPTION AND REPURCHASE OF SHARES
-------------------------------------------------------------------------------
The following information supplements that set forth in your
Prospectus under the heading "Investing in the Funds." If you are an Advisor
Class shareholder through an account established under a fee-based program your
fee-based program may impose requirements with respect to the purchase, sale or
exchange of Advisor Class shares of the Fund that are different from those
described herein. A transaction fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial intermediary. The Fund has authorized one or
more brokers to receive on its behalf purchase and redemption orders. Such
brokers are authorized to designate other intermediaries to receive purchase and
redemption orders on the Fund's behalf. In such cases, orders will receive the
NAV next computed after such order is properly received by the authorized broker
or designee and accepted by the Fund.
Redemption
----------
Subject only to the limitations described below, the Fund's Charter
requires that the Fund redeem the shares tendered to it, as described below, at
a redemption price equal to their NAV as next computed following the receipt of
shares tendered for redemption in proper form. Except for any CDSC which may be
applicable to Class A, Class B or Class C shares, there is no redemption charge.
Payment of the redemption price normally will be made within seven days after
the Fund's receipt of such tender for redemption. If a shareholder is in doubt
about what documents are required by his or her fee-based program or employee
benefit plan, the shareholder should contact his or her financial intermediary.
The right of redemption may not be suspended or the date of payment
upon redemption postponed for more than seven days after shares are tendered for
redemption, except for any period during which the Exchange is closed (other
than customary weekend and holiday closings) or during which the Commission
determines that trading thereon is restricted, or for any period during which an
emergency (as determined by the Commission) exists as a result of which disposal
by the Fund of securities owned by it is not reasonably practicable or as a
result of which it is not reasonably practicable for the Fund fairly to
determine the value of its net assets, or for such other periods as the
Commission may by order permit for the protection of security holders of the
Fund.
Payment of the redemption price normally will be made in cash. No
interest will accrue on uncashed redemption checks. The value of a shareholder's
shares on redemption or repurchase may be more or less than the cost of such
shares to the shareholder, depending upon the market value of the Fund's
portfolio securities at the time of such redemption or repurchase. Redemption
proceeds on Class A, Class B and Class C shares will reflect the deduction of
the CDSC, if any. Payment received by a shareholder upon redemption or
repurchase of his shares, assuming the shares constitute capital assets in his
hands, will result in long-term or short-term capital gains (or loss) depending
upon the shareholder's holding period and basis in respect of the shares
redeemed.
To redeem shares of the Fund for which no share certificates have been
issued, the registered owner or owners should forward a letter to the Fund
containing a request for redemption. The Fund may require the signature or
signatures on the letter to be Medallion Signature Guaranteed. Please contact
ABIS to confirm whether a Medallion Signature Guarantee is needed.
To redeem shares of the Fund represented by stock certificates, the
investor should forward the appropriate stock certificate or certificates,
endorsed in blank or with blank stock powers attached, to the Fund with the
request that the shares represented thereby, or a specified portion thereof, be
redeemed. The stock assignment form on the reverse side of each stock
certificate surrendered to the Fund for redemption must be signed by the
registered owner or owners exactly as the registered name appears on the face of
the certificate or, alternatively, a stock power signed in the same manner may
be attached to the stock certificate or certificates or, where tender is made by
mail, separately mailed to the Fund. The signature or signatures on the
assignment form must be guaranteed in the manner described above.
Telephone Redemption By Electronic Funds Transfer. Each Fund
shareholder is entitled to request redemption by electronic funds transfer (of
shares for which no stock certificates have been issued) by telephone at (800)
221-5672 if the shareholder has completed the appropriate portion of the
Subscription Application or, if an existing shareholder has not completed this
portion, by an "Autosell" application obtained from ABIS (except for certain
omnibus accounts). A telephone redemption request by electronic funds transfer
may not exceed $100,000 and must be made by 4:00 p.m. Eastern time on a Fund
business day as defined above. Proceeds of telephone redemptions will be sent by
electronic funds transfer to a shareholder's designated bank account at a bank
selected by the shareholder that is a member of the NACHA.
Telephone Redemption By Check. Each Fund shareholder is eligible to
request redemption by check of Fund shares for which no stock certificates have
been issued by telephone at (800) 221-5672 before 4:00 p.m. Eastern time on a
Fund business day in an amount not exceeding $100,000. Proceeds of such
redemptions are remitted by check to the shareholder's address of record. A
shareholder otherwise eligible for telephone redemption by check may cancel the
privilege by written instruction to ABIS, or by checking the appropriate box on
the Subscription Application.
Telephone Redemptions - General. During periods of drastic economic,
market, or other developments, such as the terrorist attacks on September 11,
2001, it is possible that shareholders would have difficulty in reaching ABIS by
telephone (although no such difficulty was apparent at any time in connection
with the attacks). If a shareholder were to experience such difficulty, the
shareholder should issue written instructions to ABIS at the address shown on
the cover of this SAI. The Fund reserves the right to suspend or terminate its
telephone redemption service at any time without notice. Telephone redemption is
not available with respect to shares (i) for which certificates have been
issued, (ii) held in nominee or "street name" accounts, (iii) held by a
shareholder who has changed his or her address of record within the preceding 30
calendar days or (iv) held in any retirement plan account. Neither the Fund, the
Adviser, ABI nor ABIS will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be genuine. The
Fund will employ reasonable procedures in order to verify that telephone
requests for redemptions are genuine, including, among others, recording such
telephone instructions and causing written confirmations of the resulting
transactions to be sent to shareholders. If the Fund did not employ such
procedures, it could be liable for losses arising from unauthorized or
fraudulent telephone instructions. Financial intermediaries may charge a
commission for handling telephone requests for redemptions.
Repurchase
----------
The Fund may repurchase shares through ABI or financial
intermediaries. The repurchase price will be the NAV next determined after ABI
receives the request (less the CDSC, if any, with respect to the Class A, Class
B and Class C shares), except that requests placed through financial
intermediaries before the close of regular trading on the Exchange on any day
will be executed at the NAV determined as of such close of regular trading on
that day if received by ABI prior to its close of business on that day (normally
5:00 p.m. Eastern time). The financial intermediary is responsible for
transmitting the request to ABI by 5:00 p.m. Eastern time (certain financial
intermediaries may enter into operating agreements permitting them to transmit
purchase information that was received prior to the close of business to ABI
after 5:00 p.m. Eastern time and receive that day's NAV). If the financial
intermediary fails to do so, the shareholder's right to receive that day's
closing price must be settled between the shareholder and that financial
intermediary. A shareholder may offer shares of the Fund to ABI either directly
or through a financial intermediary. Neither the Fund nor ABI charges a fee or
commission in connection with the repurchase of shares (except for the CDSC, if
any, with respect to Class A, Class B and Class C shares). Normally, if shares
of the Fund are offered through a financial intermediary, the repurchase is
settled by the shareholder as an ordinary transaction with or through that
financial intermediary, who may charge the shareholder for this service. The
repurchase of shares of the Fund as described above is a voluntary service of
the Fund and the Fund may suspend or terminate this practice at any time.
General
-------
The Fund reserves the right to close out an account that has remained
below $500 for 90 days. No CDSC will be deducted from the proceeds of this
redemption. In the case of a redemption or repurchase of shares of the Fund
recently purchased by check, redemption proceeds will not be made available
until the Fund is reasonably assured that the check has cleared, normally up to
15 calendar days following the purchase date.
-------------------------------------------------------------------------------
SHAREHOLDER SERVICES
-------------------------------------------------------------------------------
The following information supplements that set forth in your
Prospectus under the heading "Investing in the Funds." The shareholder services
set forth below are applicable to all classes of shares unless otherwise
indicated. If you are an Advisor Class shareholder through an account
established under a fee-based program or a shareholder in a group retirement
plan, your fee-based program or retirement plan may impose requirements with
respect to the purchase, sale or exchange of shares of the Fund that are
different from those described herein.
Automatic Investment Program
----------------------------
Investors may purchase shares of the Fund through an automatic
investment program utilizing electronic funds transfer drawn on the investor's
own bank account. Under such a program, pre-authorized monthly drafts for a
fixed amount are used to purchase shares through the selected dealer or selected
agent designated by the investor at the public offering price next determined
after ABI receives the proceeds from the investor's bank. The monthly drafts
must be in minimum amounts of either $50 or $200, depending on the investor's
initial purchase. If an investor makes an initial purchase of at least $2,500,
the minimum monthly amount for pre-authorized drafts is $50. If an investor
makes an initial purchase of less than $2,500, the minimum monthly amount for
pre-authorized drafts is $200 and the investor must commit to a monthly
investment of at least $200 until the investor's account balance is $2,500 or
more. In electronic form, drafts can be made on or about a date each month
selected by the shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment should complete
the appropriate portion of the Subscription Application. Current shareholders
should contact ABIS at the address or telephone numbers shown on the cover of
this SAI to establish an automatic investment program.
Shareholders committed to monthly investments of $25 or more through
the Automatic Investment Program by October 15, 2004 are able to continue their
program despite the $200 monthly minimum.
Exchange Privilege
------------------
You may exchange your investment in the Fund for shares of the same
class of other AllianceBernstein Mutual Funds (including AllianceBernstein
Exchange Reserves, a money market fund managed by the Adviser) if the other
AllianceBernstein Mutual Fund in which you wish to invest offers shares of the
same class. In addition, (i) present officers and full-time employees of the
Adviser, (ii) present directors or trustees of any AllianceBernstein Mutual Fund
and (iii) certain employee benefit plans for employees of the Adviser, ABI, ABIS
and their affiliates may, on a tax-free basis, exchange Class A shares of the
Fund for Advisor Class shares of the Fund. Exchanges of shares are made at the
NAV next determined and without sales or service charges. Exchanges may be made
by telephone or written request. In order to receive a day's NAV, ABIS must
receive and confirm a telephone exchange request by 4:00 p.m. Eastern time, on
that day.
Shares will continue to age without regard to exchanges for purpose of
determining the CDSC, if any, upon redemption and, in the case of Class B
shares, for the purpose of conversion to Class A shares. After an exchange, your
Class B shares will automatically convert to Class A shares in accordance with
the conversion schedule applicable to the Class B shares of the
AllianceBernstein Mutual Fund you originally purchased for cash ("original
shares"). When redemption occurs, the CDSC applicable to the original shares is
applied.
Please read carefully the prospectus of the AllianceBernstein Mutual
Fund into which you are exchanging before submitting the request. Call ABIS at
(800) 221-5672 to exchange uncertificated shares. Except with respect to
exchanges of Class A shares of the Fund for Advisor Class shares of the Fund,
exchanges of shares as described above in this section are taxable transactions
for federal income tax purposes. The exchange service may be modified,
restricted or terminated on 60 days' written notice.
All exchanges are subject to the minimum investment requirements and
any other applicable terms set forth in the prospectus for the AllianceBernstein
Mutual Fund whose shares are being acquired. An exchange is effected through the
redemption of the shares tendered for exchange and the purchase of shares being
acquired at their respective NAVs as next determined following receipt by the
AllianceBernstein Mutual Fund whose shares are being exchanged of (i) proper
instructions and all necessary supporting documents as described in such fund's
prospectus or (ii) a telephone request for such exchange in accordance with the
procedures set forth in the following paragraph. Exchanges involving the
redemption of shares recently purchased by check will be permitted only after
the AllianceBernstein Mutual Fund whose shares have been tendered for exchange
is reasonably assured that the check has cleared, normally up to 15 calendar
days following the purchase date. Exchanges of shares of AllianceBernstein
Mutual Funds will generally result in the realization of a capital gain or loss
for federal income tax purposes.
Each Fund shareholder and the shareholder's financial intermediary are
authorized to make telephone requests for exchanges unless ABIS receives written
instruction to the contrary from the shareholder, or the shareholder declines
the privilege by checking the appropriate box on the Subscription Application.
Such telephone requests cannot be accepted with respect to shares then
represented by stock certificates. Shares acquired pursuant to a telephone
request for exchange will be held under the same account registration as the
shares redeemed through such exchange.
Eligible shareholders desiring to make an exchange should telephone
ABIS with their account number and other details of the exchange, at (800)
221-5672 before 4:00 p.m., Eastern time, on a Fund business day as defined
above. Telephone requests for exchange received before 4:00 p.m. Eastern time on
a Fund business day will be processed as of the close of business on that day.
During periods of drastic economic, market, or other developments, such as the
terrorist attacks on September 11, 2001, it is possible that shareholders would
have difficulty in reaching ABIS by telephone (although no such difficulty was
apparent at any time in connection with the attacks). If a shareholder were to
experience such difficulty, the shareholder should issue written instructions to
ABIS at the address shown on the cover of this SAI.
A shareholder may elect to initiate a monthly "Auto Exchange" whereby
a specified dollar amount's worth of his or her Fund shares (minimum $25) is
automatically exchanged for shares of another AllianceBernstein Mutual Fund.
Auto Exchange transactions normally occur on the 12th day of each month, or the
Fund business day prior thereto.
None of the AllianceBernstein Mutual Funds, the Adviser, ABI or ABIS
will be responsible for the authenticity of telephone requests for exchanges
that the Fund reasonably believes to be genuine. The Fund will employ reasonable
procedures in order to verify that telephone requests for exchanges are genuine,
including, among others, recording such telephone instructions and causing
written confirmations of the resulting transactions to be sent to shareholders.
If the Fund did not employ such procedures, it could be liable for losses
arising from unauthorized or fraudulent telephone instructions. Financial
intermediaries may charge a commission for handling telephone requests for
exchanges.
The exchange privilege is available only in states where shares of the
AllianceBernstein Mutual Fund being acquired may be legally sold. Each
AllianceBernstein Mutual Fund reserves the right, at any time on 60 days'
written notice to its shareholders, to modify, restrict or terminate the
exchange privilege.
Statements and Reports
----------------------
Each shareholder of the Fund receives semi-annual and annual reports
which include a portfolio of investments, financial statements and, in the case
of the annual report, the report of the Fund's independent registered public
accounting firm, [___________________________], as well as a confirmation of
each purchase and redemption. By contacting his or her financial intermediary or
ABIS, a shareholder can arrange for copies of his or her account statements to
be sent to another person.
-------------------------------------------------------------------------------
NET ASSET VALUE
-------------------------------------------------------------------------------
The NAV is computed at the next close of regular trading on the
Exchange (ordinarily 4:00 p.m. Eastern time) following receipt of a purchase or
redemption order by the Fund on each Fund business day on which such an order is
received and on such other days as the Board of Directors deems appropriate or
necessary in order to comply with Rule 22c-1 under the 1940 Act. The Fund's NAV
is calculated by dividing the value of the Fund's total assets, less its
liabilities, by the total number of its shares then outstanding. A Fund business
day is any weekday on which the Exchange is open for trading.
In accordance with applicable rules under the 1940 Act and the Fund's
pricing policies and procedures adopted by the Board of Directors (the "Pricing
Policies"), portfolio securities are valued at current market value or at fair
value. The Board of Directors has delegated to the Adviser, subject to the
Board's continuing oversight, certain of its duties with respect to the Pricing
Policies.
With respect to securities for which market quotations are readily
available, the market value of a security will be determined as follows:
(a) securities listed on the Exchange or on a foreign securities
exchange are valued at the last sale price reflected on the consolidated tape at
the close of the Exchange or foreign securities exchange on the business day as
of which such value is being determined. If there has been no sale on such day,
the securities are valued at the mean of the closing bid and asked prices on
such day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value by, or in accordance with procedures
established by, the Board of Directors;
(b) securities not listed on the Exchange or on a foreign securities
exchange but listed on other national securities exchanges are valued in
accordance with paragraph (a) above, and securities traded on The Nasdaq Stock
Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official
Closing Price;
(c) securities traded on the Exchange or on a foreign securities
exchange and on one or more other national or foreign securities exchanges, and
securities not traded on the Exchange but traded on one or more other national
or foreign securities exchanges, are valued in accordance with paragraph (a)
above by reference to the principal exchange on which the securities are traded;
(d) listed put or call options purchased by the Fund are valued at the
last sale price. If there has been no sale on that day, such securities will be
valued at the closing bid prices on that day;
(e) open futures contracts and options thereon will be valued using
the closing settlement price or, in the absence of such a price, the most recent
quoted bid price. If there are no quotations available for the day of
valuations, the last available closing settlement price will be used;
(f) securities traded in the over-the-counter market, including
securities listed on a national securities exchange whose primary market is
believed to be over-the-counter (but excluding securities traded on NASDAQ) are
valued at the mean of the current bid and asked prices as reported by the
National Quotation Bureau or other comparable sources;
(g) U.S. Government securities and other debt instruments having 60
days or less remaining until maturity are valued at amortized cost if their
original maturity was 60 days or less, or by amortizing their fair value as of
the 61st day prior to maturity if their original term to maturity exceeded 60
days (unless in either case it is determined, in accordance with procedures
established by the Board of Directors, that this method does not represent fair
value);
(h) fixed-income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities. The prices provided by a pricing service take
into account many factors, including institutional size, trading in similar
groups of securities and any developments related to specific securities. For
securities where the Adviser has determined that an appropriate pricing service
does not exist, such securities may be valued on the basis of a quoted bid price
or spread from a major broker-dealer in such security;
(i) mortgage-backed and asset-backed securities may be valued at
prices obtained from a bond pricing service or at a price obtained from one or
more of the major broker-dealers in such securities when such prices are
believed to reflect the fair market value of such securities. In cases where
broker-dealer quotes are obtained, the Adviser may establish procedures whereby
changes in market yields or spreads are used to adjust, on a daily basis, a
recently obtained quoted bid price on a security;
(j) OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker-dealer in such security; and
(k) all other securities will be valued in accordance with readily
available market quotations as determined in accordance with procedures
established by the Board of Directors.
The Fund values its securities at their current market value
determined on the basis of market quotations or, if market quotations are not
readily available or are unreliable, at "fair value" as determined in accordance
with procedures established by and under the general supervision of the Fund's
Board of Directors. When the Fund uses fair value pricing, it may take into
account any factors it deems appropriate. The Fund may determine fair value
based upon developments related to a specific security, current valuations of
foreign stock indices (as reflected in U.S. futures markets) and/or U.S. sector
or broader stock market indices. The prices of securities used by the Fund to
calculate its NAV may differ from quoted or published prices for the same
securities. Fair value pricing involves subjective judgments and it is possible
that the fair value determined for a security is materially different than the
value that could be realized upon the sale of that security.
The Fund expects to use fair value pricing for securities primarily
traded on U.S. exchanges only under very limited circumstances, such as the
early closing of the exchange on which a security is traded or suspension of
trading in the security. The Fund may use fair value pricing more frequently for
securities primarily traded in non-U.S. markets because, among other things,
most foreign markets close well before the Fund values its securities at 4:00
p.m., Eastern Time. The earlier close of these foreign markets gives rise to the
possibility that significant events, including broad market moves, may have
occurred in the interim. For example, the Fund believes that foreign security
values may be affected by events that occur after the close of foreign
securities markets. To account for this, the Fund may frequently value many of
its foreign equity securities using fair value prices based on third party
vendor modeling tools to the extent available.
Subject to the Board's oversight, the Fund's Board has delegated
responsibility for valuing the Fund's assets to the Adviser. The Adviser has
established a Valuation Committee, which operates under the policies and
procedures approved by the Board, to value the Fund's assets on behalf of the
Fund. The Valuation Committee values Fund assets as described above.
The Fund may suspend the determination of its NAV (and the offering
and sale of shares), subject to the rules of the Commission and other
governmental rules and regulations, at a time when: (1) the Exchange is closed,
other than customary weekend and holiday closings, (2) an emergency exists as a
result of which it is not reasonably practicable for the Fund to dispose of
securities owned by it or to determine fairly the value of its net assets, or
(3) for the protection of shareholders, the Commission by order permits a
suspension of the right of redemption or a postponement of the date of payment
on redemption.
For purposes of determining the Fund's NAV per share, all assets and
liabilities initially expressed in a foreign currency will be converted into
U.S. Dollars at the mean of the current bid and asked prices of such currency
against the U.S. Dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the basis of a pricing
service that takes into account the quotes provided by a number of such major
banks. If such quotations are not available as of the close of the Exchange, the
rate of exchange will be determined in good faith by, or under the direction of,
the Board of Directors.
The assets attributable to the Class A shares, Class B shares, Class C
shares, Class R shares, Class K shares, Class I shares and Advisor Class shares
will be invested together in a single portfolio. The NAV of each class will be
determined separately by subtracting the liabilities allocated to that class
from the assets belonging to that class in conformance with the provisions of a
plan adopted by the Fund in accordance with Rule 18f-3 under the 1940 Act.
-------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
-------------------------------------------------------------------------------
Until the Directors of the Fund otherwise determine, each income
dividend and capital gains distribution, if any, declared by the Fund on its
outstanding shares will, at the election of each shareholder, be paid in cash or
reinvested in additional full or fractional shares of the Fund. Election to
receive dividends and distributions in cash or full or fractional shares is made
at the time the shares are initially purchased and may be changed at any time
prior to the record date for a particular dividend or distribution. Cash
dividends can be paid by check or, if the shareholder so elects, electronically
via the ACH network. There is no sales or other charge in connection with the
reinvestment of dividends and capital gains distributions. Dividends paid by the
Fund, if any, with respect to Class A, Class B, Class C, Class R, Class K, Class
I and Advisor Class shares will be calculated in the same manner at the same
time on the same day and will be in the same amount, except that the higher
distribution services applicable to Class B and C shares, and any incremental
transfer agency costs relating to Class B and Class C shares, will be borne
exclusively by the class to which they relate.
The following summary addresses only the principal United States
federal income tax considerations pertinent to the Fund and to shareholders of
the Fund. This summary does not address the United States federal income tax
consequences of owning shares to all categories of investors, some of which may
be subject to special rules. This summary is based upon the advice of counsel
for the Fund and upon current law and interpretations thereof. No confirmation
has been obtained from the relevant tax authorities. There is no assurance that
the applicable laws and interpretations will not change.
In view of the individual nature of tax consequences, each shareholder
is advised to consult the shareholder's own tax adviser with respect to the
specific tax consequences of being a shareholder of the Fund, including the
effect and applicability of federal, state, local, foreign and other tax laws
and the effects of changes therein.
United States Federal Income Taxation of
Dividends and Distributions
---------------------------
General
-------
The Fund intends for each taxable year to qualify to be taxed as a
"regulated investment company" under the Code. To so qualify, the Fund must,
among other things, (i) derive at least 90% of its gross income in each taxable
year from dividends, interest, payments with respect to securities loans, gains
from the sale or other disposition of stock, securities or foreign currency,
certain other income (including, but not limited to, gains from options, futures
or forward contracts) derived with respect to its business of investing in
stock, securities or currency or net income derived from interests in certain
qualified publicly traded partnerships; and (ii) diversify its holdings so that,
at the end of each quarter of its taxable year, the following two conditions are
met: (a) at least 50% of the value of the Fund's assets is represented by cash,
cash items, U.S. Government Securities, securities of other regulated investment
companies and other securities with respect to which the Fund's investment is
limited, in respect of any one issuer, to an amount not greater than 5% of the
value of the Fund's assets and to not more than 10% of the outstanding voting
securities of such issuer and (b) not more than 25% of the value of the Fund's
assets is invested in securities of any one issuer (other than U.S. Government
Securities or securities of other regulated investment companies), securities
(other than securities of other regulated investment companies) of any two or
more issuers which the Fund controls and which are engaged in the same or
similar trades or businesses or related trades or businesses, or securities of
one or more qualified publicly traded partnerships.
If the Fund qualifies as a regulated investment company for any
taxable year and makes timely distributions to its shareholders of 90% or more
of its investment company taxable income for that year (calculated without
regard to its net capital gain, i.e., the excess of its net long-term capital
gain over its net short-term capital loss) it will not be subject to federal
income tax on the portion of its taxable income for the year (including any net
capital gain) that it distributes to shareholders.
The Fund will also avoid the 4% federal excise tax that would
otherwise apply to certain undistributed income for a given calendar year if it
makes timely distributions to shareholders equal to the sum of (i) 98% of its
ordinary income for such year, (ii) 98% of its capital gain net income and
foreign currency gains for the twelve-month period ending on October 31 of such
year, and (iii) any ordinary income or capital gain net income from the
preceding calendar year that was not distributed during such year. For this
purpose, income or gain retained by the Fund that is subject to corporate income
tax will be considered to have been distributed by the Fund during such year.
For federal income and excise tax purposes, dividends declared and payable to
shareholders of record as of a date in October, November or December but
actually paid during the following January will be treated as if paid by the
Fund on December 31 of such earlier calendar year, and will be taxable to these
shareholders in the year declared, and not in the year in which the shareholders
actually receive the dividend.
The information set forth in the Prospectus and the following
discussion relate solely to the significant United States federal income taxes
on dividends and distributions by the Fund and assumes that the Fund qualifies
to be taxed as a regulated investment company. An investor should consult his or
her own tax advisor with respect to the specific tax consequences of being a
shareholder in the Fund, including the effect and applicability of federal,
state, local and foreign tax laws to his or her own particular situation and the
possible effects of changes therein.
Dividends and Distributions
---------------------------
Dividends of the Fund's net ordinary income and distributions of any
net realized short-term capital gain are taxable to shareholders as ordinary
income. The investment objective of the Fund is such that only a small portion,
if any, of the Fund's distributions is expected to qualify for the
dividends-received deduction for corporate shareholders.
Some or all of the distributions from the Fund may be treated as
"qualified dividend income," taxable to individuals, trusts and estates at a
maximum rate of 15% (5% for individuals, trusts and estates in lower tax
brackets) if paid on or before December 31, 2010. A distribution from the Fund
will be treated as qualified dividend income to the extent that it is comprised
of dividend income received by the Fund from taxable domestic corporations and
certain qualified foreign corporations, and provided that the Fund meets certain
holding period and other requirements with respect to the security paying the
dividend. In addition, the shareholder must meet certain holding period
requirements with respect to the shares of the Fund in order to take advantage
of this preferential tax rate. To the extent distributions from the Fund are
attributable to other sources, such as taxable interest or short-term capital
gains, dividends paid by the Fund will not be eligible for the lower rates. The
Fund will notify shareholders as to how much of the Fund's distributions, if
any, would qualify for the reduced tax rate, assuming that the shareholder also
satisfies the holding period requirements.
Distributions of net capital gain are taxable as long-term capital
gain, regardless of how long a shareholder has held shares in the Fund. Any
dividend or distribution received by a shareholder on shares of the Fund will
have the effect of reducing the NAV of such shares by the amount of such
dividend or distribution. Furthermore, a dividend or distribution made shortly
after the purchase of such shares by a shareholder, although in effect a return
of capital to that particular shareholder, would be taxable to him or her as
described above. Dividends are taxable in the manner discussed regardless of
whether they are paid to the shareholder in cash or are reinvested in additional
shares of the Fund.
After the end of the calendar year, the Fund will notify shareholders
of the federal income tax status of any distributions made by the Fund to
shareholders during such year.
Sales and Redemptions. Any gain or loss arising from a sale or
redemption of Fund shares generally will be capital gain or loss if the Fund
shares are held as a capital asset, and will be long-term capital gain or loss
if the shareholder has held such shares for more than one year at the time of
the sale or redemption; otherwise it will be short-term capital gain or loss. If
a shareholder has held shares in the Fund for six months or less and during that
period has received a distribution of net capital gain, any loss recognized by
the shareholder on the sale of those shares during the six-month period will be
treated as a long-term capital loss to the extent of the distribution. In
determining the holding period of such shares for this purpose, any period
during which a shareholder's risk of loss is offset by means of options, short
sales or similar transactions is not counted.
Any loss realized by a shareholder on a sale or exchange of shares of
the Fund will be disallowed to the extent the shares disposed of are reacquired
within a period of 61 days beginning 30 days before and ending 30 days after the
shares are sold or exchanged. For this purpose, acquisitions pursuant to the
Dividend Reinvestment Plan would constitute a reacquisition if made within the
period. If a loss disallowed, then such loss will be reflected in an upward
adjustment to the basis of the shares acquired.
Qualified Plans. A dividend or capital gains distribution with respect
to shares of the Fund held by a tax-deferred or qualified plan, such as an
individual retirement account, section 403(b)(7) retirement plan or corporate
pension or profit-sharing plan, generally will not be taxable to the plan.
Distributions from such plans will be taxable to individual participants under
applicable tax rules without regard to the character of the income earned by the
qualified plan.
Backup Withholding. Any distributions and redemption proceeds payable
to a shareholder may be subject to "backup withholding" tax (currently at a rate
of 28%) if such shareholder fails to provide the Fund with his or her correct
taxpayer identification number, fails to make certain required certifications,
or is notified by the Internal Revenue Service (the "IRS") that he or she is
subject to backup withholding. Certain categories of shareholders, including all
corporations, are exempt from such backup withholding. Backup withholding is not
an additional tax; rather, a shareholder generally may obtain a refund of any
amounts withheld under backup withholding rules that exceed such shareholder's
income tax liability by filing a refund claim with the IRS, provided that the
required information is furnished to the IRS.
Foreign Income Taxes. Investment income received by the Fund from
sources within foreign countries may be subject to foreign income taxes,
including taxes withheld at the source. The United States has entered into tax
treaties with many foreign countries which entitle the Fund to a reduced rate of
such taxes or exemption from taxes on such income. It is impossible to determine
the effective rate of foreign tax in advance since the amount of the Fund's
assets to be invested within various countries is not known. If more than 50% of
the value of the Fund's total assets at the close of its taxable year consists
of the stock or securities of foreign corporations, the Fund may elect to "pass
through" to the Fund's shareholders the amount of foreign income taxes paid by
the Fund. Pursuant to such election, shareholders would be required: (i) to
include in gross income (in addition to taxable dividends actually received),
their respective pro-rata shares of foreign taxes paid by the Fund; (ii) treat
their pro rata share of such foreign taxes as having been paid by them; and
(iii) either to deduct their pro rata share of foreign taxes in computing their
taxable income, or to use it as a foreign tax credit against federal income
taxes (but not both). No deduction for foreign taxes could be claimed by a
shareholder who does not itemize deductions. In addition, certain shareholders
may be subject to rules which limit their ability to fully deduct, or claim a
credit for, their pro rata share of the foreign taxes paid by the Fund. A
shareholder's foreign tax credit with respect to a dividend received from the
Fund will be disallowed unless the shareholder holds shares in the Fund on the
ex-dividend date and for at least 15 other days during the 30-day period
beginning 15 days prior to the ex-dividend date.
The Fund intends to meet for each fiscal year the requirements of the
Code to "pass through" to its shareholders foreign income taxes paid, but there
can be no assurance that the Fund will be able to do so. Each shareholder will
be notified within 60 days after the close of each taxable year of the Fund
whether the foreign taxes paid by the Fund will "pass through" for that year,
and, if so, the amount of each shareholder's pro-rata share (by country) of (i)
the foreign taxes paid, and (ii) the Fund's gross income from foreign sources.
Shareholders who are not liable for federal income taxes, such as retirement
plans qualified under section 401 of the Code, will not be affected by any such
"pass through" of foreign taxes.
The federal income tax status of each year's distributions by the Fund
will be reported to shareholders and to the IRS. The foregoing is only a general
description of the treatment of foreign taxes under the United States federal
income tax laws. Because the availability of a foreign tax credit or deduction
will depend on the particular circumstances of each shareholder, potential
investors are advised to consult their own tax advisers.
United States Federal Income Taxation of the Fund
-------------------------------------------------
The following discussion relates to certain significant United States
federal income tax consequences to the Fund with respect to the determination of
its "investment company taxable income" each year. This discussion assumes that
the Fund will be taxed as a regulated investment company for each of its taxable
years.
Passive Foreign Investment Companies. If the Fund owns shares in a
foreign corporation that constitutes a "passive foreign investment company" (a
"PFIC") for federal income tax purposes and the Fund does not elect or is unable
to elect to either treat such foreign corporation as a "qualified electing fund"
within the meaning of the Code or "mark-to-market" the stock of such foreign
corporation, the Fund may be subject to United States federal income taxation on
a portion of any "excess distribution" it receives from the PFIC or any gain it
derives from the disposition of such shares, even if such income is distributed
as a taxable dividend by the Fund to its shareholders. The Fund may also be
subject to additional interest charges in respect of deferred taxes arising from
such distributions or gains. Any tax paid by the Fund as a result of its
ownership of shares in a PFIC will not give rise to a deduction or credit to the
Fund or to any shareholder. A foreign corporation will be treated as a PFIC if,
for the taxable year involved, either (i) such foreign corporation derives at
least 75% of its gross income from "passive income" (including, but not limited
to, interest, dividends, royalties, rents and annuities), or (ii) on average, at
least 50% of the value (or adjusted tax basis, if elected) of the assets held by
the corporation produce or are held for the production of "passive income." In
some cases, the Fund may be able to elect to "mark-to-market" stock in a PFIC.
If the Fund makes such an election, the Fund would include in its taxable income
each year an amount equal to the excess, if any, of the fair market value of the
PFIC stock as of the close of the taxable year over the Fund's adjusted basis in
the PFIC stock. The Fund would be allowed a deduction for the excess, if any, of
the adjusted basis of the PFIC stock over the fair market value of the PFIC
stock as of the close of the taxable year, but only to the extent of any net
mark-to-market gains included in the Fund's taxable income for prior taxable
years. The Fund's adjusted basis in the PFIC stock would be adjusted to reflect
the amounts included in, or deducted from, income under this election. Amounts
included in income pursuant to this election, as well as gain realized on the
sale or other disposition of the PFIC stock, would be treated as ordinary
income. The deductible portion of any mark-to-market loss, as well as loss
realized on the sale or other disposition of the PFIC stock to the extent that
such loss does not exceed the net mark-to-market gains previously included by
the Fund, would be treated as ordinary loss. The Fund generally would not be
subject to the deferred tax and interest charge provisions discussed above with
respect to PFIC stock for which a mark-to-market election has been made. If the
Fund purchases shares in a PFIC and the Fund elects to treat the foreign
corporation as a "qualified electing fund" under the Code, the Fund may be
required to include in its income each year a portion of the ordinary income and
net capital gains of such foreign corporation, even if this income is not
distributed to the Fund. Any such income would be subject to the 90% and
calendar year distribution requirements described above.
Options, Futures Contracts, and Forward Currency Exchange Contracts.
Certain listed options, regulated futures contracts, and forward currency
exchange contracts are considered "section 1256 contracts" for federal income
tax purposes. Section 1256 contracts held by the Fund at the end of each taxable
year will be "marked to market" and treated for federal income tax purposes as
though sold for fair market value on the last business day of such taxable year.
Gain or loss realized by the Fund on section 1256 contracts other than forward
currency exchange contracts will be considered 60% long-term and 40% short-term
capital gain or loss. Gain or loss realized by the Fund on forward currency
exchange contracts will be treated as section 988 gain or loss and will
therefore be characterized as ordinary income or loss and will increase or
decrease the amount of the Fund's net investment income available to be
distributed to shareholders as ordinary income, as described above. The Fund can
elect to exempt its section 1256 contracts which are part of a "mixed straddle"
(as described below) from the application of section 1256.
Gain or loss realized by the Fund on the lapse or sale of put and call
options on foreign currencies which are traded over-the-counter or on certain
foreign exchanges will be treated as section 988 gain or loss and will therefore
be characterized as ordinary income or loss and will increase or decrease the
amount of the Fund's net investment income available to be distributed to
shareholders as ordinary income, as described above. The amount of such gain or
loss shall be determined by subtracting the amount paid, if any, for or with
respect to the option (including any amount paid by the Fund upon termination of
an option written by the Fund) from the amount received, if any, for or with
respect to the option (including any amount received by the Fund upon
termination of an option held by the Fund). In general, if the Fund exercises
such an option on a foreign currency, or if such an option that the Fund has
written is exercised, gain or loss on the option will be recognized in the same
manner as if the Fund had sold the option (or paid another person to assume the
Fund's obligation to make delivery under the option) on the date on which the
option is exercised, for the fair market value of the option. The foregoing
rules will also apply to other put and call options which have as their
underlying property foreign currency and which are traded over-the-counter or on
certain foreign exchanges to the extent gain or loss with respect to such
options is attributable to fluctuations in foreign currency exchange rates.
Tax Straddles. Any option, futures contract or other position entered
into or held by the Fund in conjunction with any other position held by the Fund
may constitute a "straddle" for federal income tax purposes. A straddle of which
at least one, but not all, the positions are section 1256 contracts may
constitute a "mixed straddle." In general, straddles are subject to certain
rules that may affect the character and timing of the Fund's gains and losses
with respect to straddle positions by requiring, among other things, that (i)
loss realized on disposition of one position of a straddle not be recognized to
the extent that the Fund has unrealized gains with respect to the other position
in such straddle; (ii) the Fund's holding period in straddle positions be
suspended while the straddle exists (possibly resulting in gain being treated as
short-term capital gain rather than long-term capital gain); (iii) losses
recognized with respect to certain straddle positions which are part of a mixed
straddle and which are non-section 1256 positions be treated as 60% long-term
and 40% short-term capital loss; (iv) losses recognized with respect to certain
straddle positions which would otherwise constitute short-term capital losses be
treated as long-term capital losses; and (v) the deduction of interest and
carrying charges attributable to certain straddle positions may be deferred.
Various elections are available to the Fund which may mitigate the effects of
the straddle rules, particularly with respect to mixed straddles. In general,
the straddle rules described above do not apply to any straddles held by the
Fund all of the offsetting positions of which consist of section 1256 contracts.
Currency Fluctuations -- "Section 988" Gains or Losses. Under the
Code, gains or losses attributable to fluctuations in exchange rates which occur
between the time the Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually collects such receivables or pays such liabilities are treated as
ordinary income or ordinary loss. Similarly, gains or losses from the
disposition of foreign currencies, from the disposition of debt securities
denominated in a foreign currency, or from the disposition of a forward contract
denominated in a foreign currency which are attributable to fluctuations in the
value of the foreign currency between the date of acquisition of the asset and
the date of disposition also are treated as ordinary income or loss. These gains
or losses, referred to under the Code as "section 988" gains or losses, increase
or decrease the amount of the Fund's investment company taxable income available
to be distributed to its shareholders as ordinary income, rather than increasing
or decreasing the amount of the Fund's net capital gain. Because section 988
losses reduce the amount of ordinary dividends the Fund will be allowed to
distribute for a taxable year, such section 988 losses may result in all or a
portion of prior dividend distributions for such year being recharacterized as a
non-taxable return of capital to shareholders, rather than as an ordinary
dividend, reducing each shareholder's basis in his or her Fund shares. To the
extent that such distributions exceed such shareholder's basis, each will be
treated as a gain from the sale of shares.
Other Taxes
-----------
The Fund may be subject to other state and local taxes.
Taxation of Foreign Stockholders
--------------------------------
Taxation of a shareholder who, under the Code, is a nonresident alien
individual, foreign trust or estate, foreign corporation or foreign partnership
("foreign shareholder"), depends on whether the income from the Fund is
"effectively connected" with a U.S. trade or business carried on by the foreign
shareholder.
If the income from the Fund is not effectively connected with the
foreign shareholder's U.S. trade or business, then, except as discussed below,
distributions of the Fund attributable to ordinary income and short-term capital
gain paid to a foreign shareholder by the Fund will be subject to U.S.
withholding tax at the rate of 30% (or lower treaty rate) upon the gross amount
of the distribution. However, distributions of the Fund attributable to
short-term capital gains and U.S. source portfolio interest income paid during
taxable years of the Fund beginning before January 1, 2008 will not be subject
to this withholding tax.
A foreign shareholder generally would be exempt from Federal income
tax on distributions of the Fund attributable to net long-term capital gain and
on gain realized from the sale or redemption of shares of the Fund. Special
rules apply in the case of a shareholder that is a foreign trust or foreign
partnership.
If the income from the Fund is effectively connected with a foreign
shareholder's U.S. trade or business, then ordinary income distributions,
capital gain distributions, and any gain realized upon the sale of shares of the
Fund will be subject to Federal income tax at the rates applicable to U.S.
citizens or U.S. corporations.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein.
The tax rules of other countries with respect to an investment in the
Fund can differ from the Federal income taxation rules described above. These
foreign rules are not discussed herein. Foreign shareholders are urged to
consult their own tax advisors as to the consequences of foreign tax rules with
respect to an investment in the Fund.
-------------------------------------------------------------------------------
PORTFOLIO TRANSACTIONS
-------------------------------------------------------------------------------
Subject to the general oversight of the Board of Directors of the
Fund, the Adviser is responsible for the investment decisions and the placing of
orders for portfolio transactions for the Fund. The Adviser determines the
broker or dealer to be used in each specific transaction with the objective of
negotiating a combination of the most favorable commission (for transactions on
which a commission is payable) and the best price obtainable on each transaction
(generally defined as "best execution"). In connection with seeking best price
and execution, the Fund does not consider sales of shares of the Fund or other
investment companies managed by the Adviser as a factor in the selection of
brokers and dealers to effect portfolio transactions and has adopted a policy
and procedures reasonably designed to preclude such considerations.
When consistent with the objective of obtaining best execution,
brokerage may be directed to persons or firms supplying investment information
to the Adviser. There may be occasions where the transaction cost charged by a
broker may be greater than that which another broker may charge if the Fund
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of the brokerage, research and statistical services
provided by the executing broker.
Neither the Fund nor the Adviser has entered into agreements or
understandings with any brokers regarding the placement of securities
transactions because of research services they provide. To the extent that such
persons or firms supply investment information to the Adviser for use in
rendering investment advice to the Fund, such information may be supplied at no
cost to the Adviser and, therefore, may have the effect of reducing the expenses
of the Adviser in rendering advice to the Fund. While it is impracticable to
place an actual dollar value on such investment information, its receipt by the
Adviser probably does not reduce the overall expenses of the Adviser to any
material extent.
The investment information provided to the Adviser is of the type
described in Section 28(e)(3) of the Securities Exchange Act of 1934 and is
designed to augment the Adviser's own internal research and investment strategy
capabilities. Research services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its client accounts.
The extent to which commissions that will be charged by broker-dealers
selected by the Fund may reflect an element of value for research cannot
presently be determined. To the extent that research services of value are
provided by broker-dealers with or through whom the Fund places portfolio
transactions, the Adviser may be relieved of expenses which it might otherwise
bear. Research services furnished by broker-dealers could be useful and of value
to the Adviser in servicing its other clients as well as the Fund; but, on the
other hand, certain research services obtained by the Adviser as a result of the
placement of portfolio brokerage of other clients could be useful and of value
to it in serving the Fund.
The Fund may deal in some instances in securities that are not listed
on a national stock exchange but are traded in the over-the-counter market. The
Fund may also purchase listed securities through the third market, i.e., from a
dealer that is not a member of the exchange on which a security is listed. Where
transactions are executed in the over-the-counter market or third market, the
Fund will seek to deal with the primary market makers; but when necessary in
order to obtain the best price and execution, it will utilize the services of
others. In all cases, the Fund will attempt to negotiate best execution.
Investment decisions for the Fund are made independently from those
for other investment companies and other advisory accounts managed by the
Adviser. It may happen, on occasion, that the same security is held in the
portfolio of the Fund and one or more of such other companies or accounts.
Simultaneous transactions are likely when several funds or accounts are managed
by the same Adviser, particularly when a security is suitable for the investment
objectives of more than one of such companies or accounts. When two or more
companies or accounts managed by the Adviser are simultaneously engaged in the
purchase or sale of the same security, the transactions are allocated to the
respective companies or accounts both as to amount and price, in accordance with
a method deemed equitable to each company or account. In some cases this system
may adversely affect the price paid or received by the Fund or the size of the
position obtainable for the Fund.
Allocations are made by the officers of the Fund or of the Adviser.
Purchases and sales of portfolio securities are determined by the Adviser and
are placed with broker-dealers by the order department of the Adviser.
The Fund may from time to time place orders for the purchase or sale
of securities (including listed call options) with SCB & Co., an affiliate of
the Adviser. In such instances, the placement of orders with such broker would
be consistent with the Fund's objective of obtaining best execution and would
not be dependent upon the fact that SCB & Co. is an affiliate of the Adviser.
With respect to orders placed with SCB & Co. for execution on a national
securities exchange, commissions received must conform to Section 17(e)(2)(A) of
the 1940 Act and Rule 17e-1 thereunder, which permit an affiliated person of a
registered investment company (such as the Fund), or any affiliated person of
such person, to receive a brokerage commission from such registered investment
company provided that such commission is reasonable and fair compared to the
commissions received by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time.
During the fiscal years ended June 30, 2006, June 30, 2005 and June
30, 2004, the Fund incurred brokerage commissions amounting in the aggregate to
$[________________], $145,256 and $74,669, respectively. During the fiscal years
ended June 30, 2006, June 30, 2005 and June 30, 2004, brokerage commissions
amounting in the aggregate to $[________________], $0 and $0, respectively, were
paid to SCB & Co. During the fiscal year ended June 30, 2006, the brokerage
commissions paid to SCB & Co. constituted [______]% of the Fund's aggregate
brokerage commissions. During the fiscal year ended June 30, 2006, of the Fund's
aggregate dollar amount of brokerage transactions involving the payment of
commissions, [______]% were effected through SCB & Co. During the fiscal year
ended June 30, 2006, transactions in portfolio securities of the Fund aggregated
$[________________]. Brokerage commissions of approximately $[________________]
were allocated to persons or firms supplying research services to the Fund or
the Adviser.
Many of the Fund's portfolio transactions in equity securities will
occur on foreign stock exchanges. Transactions on stock exchanges involve the
payment of brokerage commissions. On many foreign stock exchanges these
commissions are fixed. Securities traded in foreign over-the-counter markets
(including most fixed-income securities) are purchased from and sold to dealers
acting as principal. Over-the-counter transactions generally do not involve the
payment of a stated commission, but the price usually includes an undisclosed
commission or markup. The prices of underwritten offerings, however, generally
include a stated underwriter's discount. The Adviser expects to effect the bulk
of its transactions in securities of companies based in foreign countries
through brokers, dealers or underwriters located in such countries. U.S.
Government or other U.S. securities constituting permissible investments will be
purchased and sold through U.S. brokers, dealers or underwriters.
Disclosure of Portfolio Holdings
--------------------------------
The Fund believes that the ideas of the Adviser's investment staff
should benefit the Fund and its shareholders, and does not want to afford
speculators an opportunity to profit by anticipating Fund trading strategies or
using Fund information for stock picking. However, the Fund also believes that
knowledge of the Fund's portfolio holdings can assist shareholders in monitoring
their investment, making asset allocation decisions, and evaluating portfolio
management techniques.
The Adviser has adopted, on behalf of the Fund, policies and
procedures relating to disclosure of the Fund's portfolio securities. The
policies and procedures relating to disclosure of the Fund's portfolio
securities are designed to allow disclosure of portfolio holdings information
where necessary to the Fund's operation or useful to the Fund's shareholders
without compromising the integrity or performance of the Fund. Except when there
are legitimate business purposes for selective disclosure and other conditions
(designed to protect the Fund and its shareholders) are met, the Fund does not
provide or permit others to provide information about the Fund's portfolio
holdings on a selective basis.
The Fund includes portfolio holdings information as required in
regulatory filings and shareholder reports, discloses portfolio holdings
information as required by federal or state securities laws and may disclose
portfolio holdings information in response to requests by governmental
authorities. In addition, the Adviser posts portfolio holdings information on
the Adviser's website (www.AllianceBernstein.com). The Adviser posts on the
website a complete schedule of the Fund's portfolio securities, as of the last
day of each calendar month, approximately 30 days after the end of that month.
This posted information generally remains accessible on the website for three
months. For each portfolio security, the posted information includes its name,
the number of shares held by the Fund, the market value of the Fund's holdings,
and the percentage of the Fund's assets represented by the Fund's holdings. In
addition to the schedule of portfolio holdings, the Adviser may post information
about the number of securities the Fund holds, a summary of the Fund's top ten
holdings (including name and the percentage of the Fund's assets invested in
each holding), and a percentage breakdown of the Fund's investments by country,
sector and industry, as applicable approximately 20 days after the end of the
month. The day after portfolio holdings information is publicly available on the
website, it may be mailed, e-mailed or otherwise transmitted to any person.
The Adviser may distribute or authorize the distribution of
information about the Fund's portfolio holdings that is not publicly available,
on the website or otherwise, to the Adviser's employees and affiliates that
provide services to the Fund. In addition, the Adviser may distribute or
authorize distribution of information about the Fund's portfolio holdings that
is not publicly available, on the website or otherwise, to the Fund's service
providers who require access to the information in order to fulfill their
contractual duties relating to the Fund, to facilitate the review of the Fund by
rating agencies, for the purpose of due diligence regarding a merger or
acquisition, or for the purpose of effecting in-kind redemption of securities to
facilitate orderly redemption of portfolio assets and minimal impact on
remaining Fund shareholders. The Adviser does not expect to disclose information
about the Fund's portfolio holdings that is not publicly available to the Fund's
individual or institutional investors or to intermediaries that distribute the
Fund's shares. Information may be disclosed with any frequency and any lag, as
appropriate.
Before any non-public disclosure of information about the Fund's
portfolio holdings is permitted, however, Alliance's Mutual Fund Compliance
Director must determine that the Fund has a legitimate business purpose for
providing the portfolio holdings information, that the disclosure is in the best
interests of the Fund's shareholders, and that the recipient agrees or has a
duty to keep the information confidential and agrees not to trade directly or
indirectly based on the information or to use the information to form a specific
recommendation about whether to invest in the Fund or any other security. Under
no circumstances may the Adviser or its affiliates receive any consideration or
compensation for disclosing the information.
The Adviser has established procedures to ensure that the Fund's
portfolio holdings information is only disclosed in accordance with these
policies. Only Alliance's Mutual Fund Compliance Director (or his designee) may
approve the disclosure, and then only if he or she and a designated senior
officer in the Adviser's product management group determines that the disclosure
serves a legitimate business purpose of the Fund and is in the best interest of
the Fund's shareholders. Alliance's Mutual Fund Compliance Director (or his
designee) approves disclosure only after considering the anticipated benefits
and costs to the Fund and its shareholders, the purpose of the disclosure, any
conflicts of interest between the interests of the Fund and its shareholders and
the interests of the Adviser or any of its affiliates, and whether the
disclosure is consistent with the policies and procedures governing disclosure.
Only someone approved by the Adviser's Mutual Fund Compliance Director (or his
designee) may make approved disclosures of portfolio holdings information to
authorized recipients. The Adviser reserves the right to request certifications
from senior officers of authorized recipients that the recipient is using the
portfolio holdings information only in a manner consistent with the Adviser's
policy and any applicable confidentiality agreement. The Adviser's Mutual Fund
Compliance Director or another member of the compliance team reports all
arrangements to disclose portfolio holdings information to the Fund's Board of
Directors on a quarterly basis. If the Board determines that disclosure was
inappropriate, the Adviser will promptly terminate the disclosure arrangement.
In accordance with these procedures, each of the following third
parties have been approved to receive information concerning the Fund's
portfolio holdings: (i) the Fund's independent registered public accounting
firm, for use in providing audit opinions; (ii) RR Donnelley Financial, Data
Communique International and, from time to time, other financial printers, for
the purpose of preparing Fund regulatory filings; (iii) the Fund's custodian in
connection with its custody of the Fund's assets; (iv) Institutional Shareholder
Services, Inc. for proxy voting services; and (v) data aggregators, such as
Vestek. Information may be provided to these parties at any time with no time
lag. Each of these parties is contractually and ethically prohibited from
sharing the Fund's portfolio holdings information unless specifically
authorized.
-------------------------------------------------------------------------------
GENERAL INFORMATION
-------------------------------------------------------------------------------
Capitalization
--------------
The Fund was incorporated under the laws of the State of Maryland on
March 22, 2002 under the name "Alliance Global Growth Trends Fund, Inc." The
name of the Fund was changed to "AllianceBernstein Global Growth Trends Fund,
Inc." on March 31, 2003, and to "AllianceBernstein Global Research Growth Fund,
Inc." on December 11, 2003.
The authorized capital stock of the Fund consists of 6,000,000,000
shares of Class A Common Stock, 6,000,000,000 shares of Class B Common Stock,
6,000,000,000 shares of Class C Common Stock, 6,000,000,000 shares of Class R
Common Stock, 3,000,000,000 shares of Class K Common Stock, 3,000,000,000 shares
of Class I Common Stock and 6,000,000,000 shares of Advisor Class Common Stock,
each having $.001 par value. All shares of the Fund, when issued, are fully paid
and non-assessable. The Directors are authorized to reclassify and issue any
unissued shares to any number of additional series and classes without
shareholder approval. Accordingly, the Directors in the future, for reasons such
as the desire to establish one or more additional portfolios with different
investment objectives, policies or restrictions, may create additional classes
or series of shares. Any issuance of shares of another class or series would be
governed by the 1940 Act and the law of the State of Maryland. If shares of
another series were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be entitled to one vote
for all purposes. Generally, shares of both portfolios would vote as a single
series on matters, such as the election of Directors, that affected both
portfolios in substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement and changes in
investment policy, shares of each portfolio would vote as a separate series.
It is anticipated that annual shareholder meetings will not be held;
shareholder meetings will be held only when required by federal or state law.
A shareholder will be entitled to share pro rata with other holders of
the same class of shares all dividends and distributions arising from the Fund's
assets and, upon redeeming shares, will receive the then current NAV of the Fund
represented by the redeemed shares less any applicable CDSC. The Fund is
empowered to establish, without shareholder approval, additional portfolios,
which may have different investment objectives and policies than those of the
Fund, and additional classes of shares within the Fund. If an additional
portfolio or class were established in the Fund, each share of the portfolio or
class would normally be entitled to one vote for all purposes. Generally, shares
of each portfolio and class would vote together as a single class on matters,
such as the election of Directors, that affect each portfolio and class in
substantially the same manner. Each class of shares of the Fund has the same
rights and is identical in all respects, except that each of Class A, Class B,
Class C, Class R and Class K shares of the Fund bears its own distribution
expenses and Class B shares and Advisor Class shares convert to Class A shares
under certain circumstances. Each class of shares of the Fund votes separately
with respect to the Fund's Rule 12b-1 distribution plan and other matters for
which separate class voting is appropriate under applicable law. Shares are
freely transferable, are entitled to dividends as determined by the Directors
and, in liquidation of the Fund, are entitled to receive the net assets of the
Fund.
At the close of business on October [____], 2006 there were
[________________] Class A shares, [________________] Class B shares,
[________________] Class C shares, [________________] Class R shares,
[________________] Class K shares, [________________] Class I shares, and
[________________] Advisor Class shares of common stock of the Fund outstanding.
To the knowledge of the Fund, the following persons owned of record or
beneficially, 5% or more of a class of the outstanding shares of the Fund as of
October [____], 2006:
No. of Shares
Name and Address of Class % of Class
---------------- -------- ----------
Class A
-------
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052 [___________] [______]%
Class B
-------
MLPF&S for the Sole Benefit
of its Customers
Attn. Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246-6484 [___________] [______]%
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052 [___________] [______]%
NFS LLC FEBO
E.A. Kostelnik
Nicole A. Kostelnik
P.O. Box 99
Comfort, TX 78013-0099 [___________] [______]%
First Clearing LLC
Special Custody Account for the
Exclusive Benefit of Customer
10750 Wheat First Dr.
Glen Allen, VA 23060-9245 [___________] [______]%
UBS Financial Services Inc. FBO
Irrevocable Agreement of Trust
Of Suzanne H. Arnold
M. Thompson
Cozen & O'Connor
1900 Market Street
Philadelphia, PA 19103-3527 [___________] [______]%
Class C
-------
MLPF&S
For the Sole Benefit
of its Customers
Attn. Fund Administration
4800 Deer Lake Dr. East, 2nd Floor
Jacksonville, FL 32246-6484 [___________] [______]%
Pershing LLC
P.O. Box 2052
Jersey City, NJ 07303-2052 [___________] [______]%
Raymond James & Assoc. Inc.
FBO Warmke IRA
880 Carillon Pkwy.
St. Petersburg, FL 33716-1100 [___________] [______]%
Class R
-------
AllianceBernstein LP
Attn: Raymond Cardosi
1 N. Lexington Ave.
White Plains, NY 10601-1712 [___________] [______]%
Class K
-------
AllianceBernstein L.P.
Attn: Raymond Cardosi
1 N. Lexington Ave.
White Plains, NY 10601-1712 [___________] [______]%
Class I
-------
AllianceBernstein L.P.
Attn: Raymond Cardosi
1 N. Lexington Ave.
White Plains, NY 10601-1712 [___________] [______]%
Advisor Class
-------------
AllianceBernstein LP
Attn: Gerry Friscia, Controller
One North Lexington Ave.
White Plains, NY 10601-1712 [___________] [______]%
PIMS/Prudential Retirement
As Nominee for the TTEE/CUST PL 007
AllianceBernstein L.P.
1345 Ave. of the Americas, 20th Floor
New York, NY 10105 [___________] [______]%
Vanguard Fid. Trust Co. FBO
Kaiser Perm. Supp. Re. Pl. (PL B)
P.O. Box 2600
Valley Forge, PA 19482-2600 [___________] [______]%
Vanguard Fid. Trust Co. FBO
Kaiser Perm. Tax Shel. Ann. Pl. (TSA)
P.O. Box 2600
Valley Forge, PA 19482-2600 [___________] [______]%
Vanguard Fiduciary Trust Co FBO
Kaiser Permanente 401k Ret. Pl.
P.O. Box 2600
Valley Forge, PA 19482-2600 [___________] [______]%
Custodian
---------
The Bank of New York, One Wall Street, New York, NY 10286 ("BNY") will
act as the Fund's custodian for the assets of the Fund but plays no part in
deciding the purchase or sale of portfolio securities. Subject to the
supervision of the Fund's Directors, BNY may enter into sub-custodial agreements
for the holding of the Fund's foreign securities.
Principal Underwriter
---------------------
ABI, an indirect wholly-owned subsidiary of the Adviser, located at
1345 Avenue of the Americas, New York, New York 10105, is the principal
underwriter of shares of the Fund. Under the Distribution Services Agreement,
the Fund has agreed to indemnify ABI, in the absence of its willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations thereunder,
against certain civil liabilities, including liabilities under the Securities
Act.
Counsel
-------
Legal matters in connection with the issuance of the shares of Common
Stock offered hereby are passed upon by Seward & Kissel LLP, New York, New York.
Independent Registered Public Accounting Firm
---------------------------------------------
[____________________________________], serves as the independent
registered public accounting firm for the Fund.
Additional Information
----------------------
Any shareholder inquiries may be directed to the shareholder's
financial intermediary or to ABIS at the address or telephone numbers shown on
the front cover of this SAI. This SAI does not contain all the information set
forth in the Registration Statement filed by the Fund with the Commission.
Copies of the Registration Statement may be obtained at a reasonable charge from
the Commission or may be examined, without charge, at the offices of the
Commission in Washington, D.C.
-------------------------------------------------------------------------------
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------------------------------
The financial statements of the Fund for the year ended June 30, 2006 and the
report of[________________________], independent registered public accounting
firm, are incorporated herein by reference to the Fund's annual report. The
annual report was filed on Form N-CSR with the Commission on September [____],
2006. It is available without charge upon request by calling ABIS at (800)
227-4618.
-------------------------------------------------------------------------------
APPENDIX A:
STATEMENT OF POLICIES AND PROCEDURES
FOR VOTING PROXIES
-------------------------------------------------------------------------------
Introduction
------------
As a registered investment adviser, AllianceBernstein L.P. ("AllianceBernstein",
"we" or "us") has a fiduciary duty to act solely in the best interests of our
clients. We recognize that this duty requires us to vote client securities in a
timely manner and make voting decisions that are in the best interests of our
clients. Consistent with these obligations, we will disclose our clients' voting
records only to them and as required by mutual fund vote disclosure regulations.
In addition, the proxy committees may, after careful consideration, choose to
respond to surveys regarding past votes.
This statement is intended to comply with Rule 206(4)-6 of the Investment
Advisers Act of 1940. It sets forth our policies and procedures for voting
proxies for our discretionary investment advisory clients, including investment
companies registered under the Investment Company Act of 1940. This statement
applies to AllianceBernstein's growth and value investment groups investing on
behalf of clients in both US and non-US securities.
Proxy Policies
--------------
This statement is designed to be responsive to the wide range of proxy voting
subjects that can have a significant effect on the investment value of the
securities held in our clients' accounts. These policies are not exhaustive due
to the variety of proxy voting issues that we may be required to consider.
AllianceBernstein reserves the right to depart from these guidelines in order to
avoid voting decisions that we believe may be contrary to our clients' best
interests. In reviewing proxy issues, we will apply the following general
policies:
Corporate Governance: AllianceBernstein's proxy voting policies recognize the
importance of good corporate governance in ensuring that management and the
board of directors fulfill their obligations to the shareholders. We favor
proposals promoting transparency and accountability within a company. We will
vote for proposals providing for equal access to the proxy materials so that
shareholders can express their views on various proxy issues. We also support
the appointment of a majority of independent directors on key committees and
separating the positions of chairman and chief executive officer. Finally,
because we believe that good corporate governance requires shareholders to have
a meaningful voice in the affairs of the company, we will support non-binding
shareholder proposals that request that companies amend their by-laws to provide
that director nominees be elected by an affirmative vote of a majority of the
votes cast.
Elections of Directors: Unless there is a proxy fight for seats on the Board or
we determine that there are other compelling reasons for withholding votes for
directors, we will vote in favor of the management proposed slate of directors.
That said, we believe that directors have a duty to respond to shareholder
actions that have received significant shareholder support. We may withhold
votes for directors that fail to act on key issues such as failure to implement
proposals to declassify boards, failure to implement a majority vote
requirement, failure to submit a rights plan to a shareholder vote or failure to
act on tender offers where a majority of shareholders have tendered their
shares. In addition, we will withhold votes for directors who fail to attend at
least seventy-five percent of board meetings within a given year without a
reasonable excuse. Finally, we may withhold votes for directors of non-U.S.
issuers where there is insufficient information about the nominees disclosed in
the proxy statement.
Appointment of Auditors: AllianceBernstein believes that the company remains in
the best position to choose the auditors and will generally support management's
recommendation. However, we recognize that there may be inherent conflicts when
a company's independent auditor performs substantial non-audit related services
for the company. Although we recognize that there may be special circumstances
that could lead to high levels of non-audit fees in some years, we would
normally consider non-audit fees in excess of 70% of total fees paid to the
auditing firm to be disproportionate. Therefore, absent unique circumstances, we
may vote against the appointment of auditors if the fees for non-audit related
services exceed 70% of the total fees paid by the company to the auditing firm
or there are other reasons to question the independence of the company's
auditors.
Changes in Legal and Capital Structure: Changes in a company's charter, articles
of incorporation or by-laws are often technical and administrative in nature.
Absent a compelling reason to the contrary, AllianceBernstein will cast its
votes in accordance with the company's management on such proposals. However, we
will review and analyze on a case-by-case basis any non-routine proposals that
are likely to affect the structure and operation of the company or have a
material economic effect on the company. For example, we will generally support
proposals to increase authorized common stock when it is necessary to implement
a stock split, aid in a restructuring or acquisition or provide a sufficient
number of shares for an employee savings plan, stock option or executive
compensation plan. However, a satisfactory explanation of a company's intentions
must be disclosed in the proxy statement for proposals requesting an increase of
greater than one hundred percent of the shares outstanding. We will oppose
increases in authorized common stock where there is evidence that the shares
will be used to implement a poison pill or another form of anti-takeover device.
Corporate Restructurings, Mergers and Acquisitions: AllianceBernstein believes
proxy votes dealing with corporate reorganizations are an extension of the
investment decision. Accordingly, we will analyze such proposals on a
case-by-case basis, weighing heavily the views of our research analysts that
cover the company and our investment professionals managing the portfolios in
which the stock is held.
Proposals Affecting Shareholder Rights: AllianceBernstein believes that certain
fundamental rights of shareholders must be protected. We will generally vote in
favor of proposals that give shareholders a greater voice in the affairs of the
company and oppose any measure that seeks to limit those rights. However, when
analyzing such proposals we will weigh the financial impact of the proposal
against the impairment of shareholder rights.
Anti-Takeover Measures: AllianceBernstein believes that measures that impede
corporate transactions such as takeovers or entrench management not only
infringe on the rights of shareholders but may also have a detrimental effect on
the value of the company. We will generally oppose proposals, regardless of
whether they are advanced by management or shareholders, the purpose or effect
of which is to entrench management or excessively or inappropriately dilute
shareholder ownership. Conversely, we support proposals that would restrict or
otherwise eliminate anti-takeover or anti-shareholder measures that have already
been adopted by corporate issuers. For example, we will support shareholder
proposals that seek to require the company to submit a shareholder rights plan
to a shareholder vote. We will evaluate, on a case-by-case basis, proposals to
completely redeem or eliminate such plans. Furthermore, we will generally oppose
proposals put forward by management (including the authorization of blank check
preferred stock, classified boards and supermajority vote requirements) that
appear to be anti-shareholder or intended as management entrenchment mechanisms.
Executive Compensation: AllianceBernstein believes that company management and
the compensation committee of the board of directors should, within reason, be
given latitude to determine the types and mix of compensation and benefit awards
offered to company employees. Whether proposed by a shareholder or management,
we will review proposals relating to executive compensation plans on a
case-by-case basis to ensure that the long-term interests of management and
shareholders are properly aligned. In general, we will analyze the proposed
plans to ensure that shareholder equity will not be excessively diluted. With
regard to stock award or option plans, we consider whether the option exercise
prices are below the market price on the date of grant and whether an acceptable
number of employees are eligible to participate in such programs. We will
generally oppose plans that have below market value exercise prices on the date
of issuance or permit repricing of underwater stock options without shareholder
approval. Other factors such as the company's performance and industry practice
will generally be factored into our analysis. We will support proposals
requiring managements to submit severance packages that exceed 2.99 times the
sum of an executive officer's base salary plus bonus that are triggered by a
change in control to a shareholder vote. Finally, we will support shareholder
proposals requiring companies to expense stock options because we view them as a
large corporate expense that should be appropriately accounted for.
Social and Corporate Responsibility: AllianceBernstein will review and analyze
on a case-by-case basis proposals relating to social, political and
environmental issues to determine whether they will have a financial impact on
shareholder value. We will vote against proposals that are unduly burdensome or
result in unnecessary and excessive costs to the company. We may abstain from
voting on social proposals that do not have a readily determinable financial
impact on shareholder value.
Proxy Voting Procedures
-----------------------
Proxy Voting Committees
-----------------------
Our growth and value investment groups have formed separate proxy voting
committees to establish general proxy policies for AllianceBernstein and
consider specific proxy voting matters as necessary. These committees
periodically review these policies and new types of corporate governance issues,
and decide how we should vote on proposals not covered by these policies. When a
proxy vote cannot be clearly decided by an application of our stated policy, the
proxy committee will evaluate the proposal. In addition, the committees, in
conjunction with the analyst that covers the company, may contact corporate
management and interested shareholder groups and others as necessary to discuss
proxy issues. Members of the committee include senior investment personnel and
representatives of the Legal and Compliance Department. The committees may also
evaluate proxies where we face a potential conflict of interest (as discussed
below). Finally, the committees monitor adherence to these policies.
Conflicts of Interest
---------------------
AllianceBernstein recognizes that there may be a potential conflict of interest
when we vote a proxy solicited by an issuer whose retirement plan we manage, or
we administer, who distributes AllianceBernstein sponsored mutual funds, or with
whom we or an employee has another business or personal relationship that may
affect how we vote on the issuer's proxy. Similarly, AllianceBernstein may have
a potential material conflict of interest when deciding how to vote on a
proposal sponsored or supported by a shareholder group that is a client. We
believe that centralized management of proxy voting, oversight by the proxy
voting committees and adherence to these policies ensures that proxies are voted
with only our clients' best interests in mind. Additionally, we have implemented
procedures to ensure that our votes are not the product of a material conflict
of interests, including: (i) on an annual basis, the proxy committees will take
reasonable steps to evaluate the nature of AllianceBernstein's and our
employees' material business and personal relationships (and those of our
affiliates) with any company whose equity securities are held in client accounts
and any client that has sponsored or has material interest in a proposal upon
which we will be eligible to vote; (ii) requiring anyone involved in the
decision making process to disclose to the chairman of the appropriate proxy
committee any potential conflict that they are aware of (including personal
relationships) and any contact that they have had with any interested party
regarding a proxy vote; (iii) prohibiting employees involved in the decision
making process or vote administration from revealing how we intend to vote on a
proposal in order to reduce any attempted influence from interested parties; and
(iv) where a material conflict of interests exists, reviewing our proposed vote
by applying a series of objective tests and, where necessary, considering the
views of third party research services to ensure that our voting decision is
consistent with our clients' best interests.
Because under certain circumstances AllianceBernstein considers the
recommendation of third party research services, the proxy committees will take
reasonable steps to verify that any third party research service is in fact
independent based on all of the relevant facts and circumstances. This includes
reviewing the third party research service's conflict management procedures and
ascertaining, among other things, whether the third party research service (i)
has the capacity and competency to adequately analyze proxy issues; and (ii) can
make such recommendations in an impartial manner and in the best interests of
our clients.
Proxies of Certain Non-US Issuers
---------------------------------
Proxy voting in certain countries requires "share blocking." Shareholders
wishing to vote their proxies must deposit their shares shortly before the date
of the meeting (usually one-week) with a designated depositary. During this
blocking period, shares that will be voted at the meeting cannot be sold until
the meeting has taken place and the shares are returned to the clients'
custodian banks. Absent compelling reasons to the contrary, AllianceBernstein
believes that the benefit to the client of exercising the vote does not outweigh
the cost of voting (i.e. not being able to sell the shares during this period).
Accordingly, if share blocking is required we generally abstain from voting
those shares.
In addition, voting proxies of issuers in non-US markets may give
rise to a number of administrative issues that may prevent AllianceBernstein
from voting such proxies. For example, AllianceBernstein may receive meeting
notices without enough time to fully consider the proxy or after the cut-off
date for voting. Other markets require AllianceBernstein to provide local agents
with power of attorney prior to implementing AllianceBernstein's voting
instructions. Although it is AllianceBernstein's policy to seek to vote all
proxies for securities held in client accounts for which we have proxy voting
authority, in the case of non-US issuers, we vote proxies on a best efforts
basis.
Loaned Securities
-----------------
Many clients of AllianceBernstein have entered into securities lending
arrangements with agent lenders to generate additional revenue.
AllianceBernstein will not be able to vote securities that are on loan under
these types of arrangements. However, under rare circumstances, for voting
issues that may have a significant impact on the investment, we may request that
clients recall securities that are on loan if we determine that the benefit of
voting outweighs the costs and lost revenue to the client or fund and the
administrative burden of retrieving the securities.
Proxy Voting Records
--------------------
You may obtain information regarding how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30,
without charge. Simply visit AllianceBernstein's web site at
www.alliancebernstein.com, or go to the Securities and Exchange Commission's web
site at www.sec.gov, or call AllianceBernstein at (800) 227-4618.
SK 00520 0264 664990
PART C
OTHER INFORMATION
ITEM 23. Exhibits
(a) Articles of Amendment and Restatement of the Articles of
Incorporation of Registrant dated February 1, 2006 and filed
February 23, 2006 - Filed herewith.
(b) Amended and Restated By-laws of the Registrant - Filed herewith.
(c) Not applicable.
(d) Form of Amended and Restated Advisory Agreement Incorporated by
reference to Exhibit (d)(2) to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form N-1A (File Nos
333-85164 and 811-21064), filed with the Securities and Exchange
Commission on November 1, 2004.
(e) (1) Distribution Services Agreement between the Registrant and
AllianceBernstein Investments, Inc. (formerly known as
Alliance Fund Distributors, Inc.) - Incorporated by
reference to Exhibit (e)(1) to Pre-Effective Amendment No. 1
to Registrant's Registration Statement on Form N-1A (File
Nos. 333-85164 and 811-21064), filed with the Securities and
Exchange Commission on July 12, 2002.
(2) Amendment to the Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc. (formerly
known as Alliance Fund Distributors, Inc.) - Incorporated by
reference to Exhibit (e)(2) to Post-Effective Amendment No.
3 to Registrant's Registration Statement on Form N-1A (File
Nos. 333-85164 and 811-21064), filed with the Securities and
Exchange Commission on November 1, 2004.
(3) Form of Amendment to the Distribution Services Agreement
between the Registrant and AllianceBernstein Investments,
Inc. (formerly known as Alliance Fund Distributors, Inc.) -
Incorporated by reference to Exhibit (e)(3) to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-85164 and
811-21064), filed with the Securities and Exchange
Commission on February 28, 2005.
(4) Form of Selected Dealer Agreement between AllianceBernstein
Investments, Inc. (formerly known as Alliance Fund
Distributors, Inc.) and selected dealers offering shares of
Registrant - Incorporated by reference to Exhibit (e)(3) to
Post-Effective Amendment No. 34 to the Registration
Statement on Form N-1A of AllianceBernstein Municipal Income
Fund, Inc. (File Nos. 33-07812 and 811-04791), filed with
the Securities and Exchange Commission on January 28, 2005.
(5) Form of Selected Agent Agreement between AllianceBernstein
Investments, Inc. (formerly known as Alliance Fund
Distributors, Inc.) and selected agents making available
shares of Registrant - Incorporated by reference to Exhibit
(e)(4) to Post-Effective Amendment No. 34 to the
Registration Statement on Form N-1A of AllianceBernstein
Municipal Income Fund, Inc. (File Nos. 33-07812 and
811-04791), filed with the Securities and Exchange
Commission on January 28, 2005.
(f) Not applicable.
(g) Form of Custodian Agreement between the Registrant and The Bank
of New York - Incorporated by reference to Exhibit (g) to
Pre-Effective Amendment No. 2 to the Registration Statement on
Form N-1A of AllianceBernstein Blended Style Series, Inc. (File
Nos. 333-87002 and 811-21081), filed with the Securities and
Exchange Commission July 9, 2002.
(h) (1) Form of Transfer Agency Agreement between the Registrant and
AllianceBernstein Investor Services, Inc. - Incorporated by
reference to Exhibit (h)(1) to Pre-Effective Amendment No. 2
to the Registration Statement on Form N-1A of
AllianceBernstein Blended Style Series, Inc. (File Nos.
333-87002 and 811-21081), filed with the Securities and
Exchange Commission July 9, 2002.
(2) Expense Limitation Agreement between the Registrant and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(2) to Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File Nos.
333-85164 and 811-21064), filed with the Securities and
Exchange Commission on July 12, 2002.
(3) Expense Limitation Undertaking by AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(3) to
Post-Effective Amendment No. 4 to the Registrant's
Registration Statement on Form N-1A (File Nos. 333-85164 and
811-21064), filed with the Securities and Exchange
Commission on February 28, 2005.
(i) Opinion and Consent of Seward & Kissel LLP - To be filed by
amendment.
(j) Consent of Independent Registered Public Accounting Firm - To be
filed by amendment.
(k) Not applicable.
(l) Not Applicable.
(m) Rule 12b-1 Plan - See Exhibit (e)(1) hereto.
(n) Form of Amended and Restated Rule 18f-3 Plan - Incorporated by
reference to Exhibit (n) to Post-Effective Amendment No. 4 to the
Registrant's Registration Statement on Form N-1A (File Nos.
333-85164 and 811-21064), filed with the Securities and Exchange
Commission on February 28, 2005.
(p) (1) Code of Ethics for the Fund - Incorporated by reference to
Exhibit (p)(1) to Post-Effective Amendment No. 74 of the
Registration Statement on Form N-1A of AllianceBernstein
Bond Fund, Inc. (File Nos. 2-48227 and 811-2383), filed with
the Securities and Exchange Commission on October 6, 2000,
which is substantially identical in all material respects
except as to the party which is the Registrant.
(2) Code of Ethics for the AllianceBernstein L.P. and
AllianceBernstein Investments, Inc. (formerly known as
Alliance Fund Distributors, Inc.) - Incorporated by
reference to Exhibit (p)(2) to Post-Effective Amendment No.
34 of the Registration Statement on Form N-1A of
AllianceBernstein Municipal Income Fund, Inc. (File Nos.
33-07812 and 811-04791), filed with the Securities and
Exchange Commission on January 28, 2005.
Other Exhibits:
Powers of Attorney for Ruth Block, David H. Dievler, John H.
Dobkin, Michael J. Downey, William H. Foulk, Jr., D. James Guzy,
Nancy P. Jacklin, Marc O. Mayer and Marshall C. Turner, Jr. -
Filed herewith.
ITEM 24. Persons Controlled by or Under Common Control with the Fund.
None.
ITEM 25. Indemnification
It is the Registrant's policy to indemnify its directors and officers,
employees and other agents to the maximum extent permitted by Section
2-418 of the General Corporation Law of the State of Maryland and as
set forth in Article EIGHTH of Registrant's Articles of Amendment and
Restatement of Articles of Incorporation, filed as Exhibit (a) in
response to Item 23, Article IX of the Registrant's Amended and
Restated By-Laws filed as Exhibit (b) in response to Item 23 and
Section 10 of the Distribution Services Agreement filed as Exhibit
(e)(1) in response to Item 23, all as set forth below. The liability
of the Registrant's directors and officers is dealt with in Article
EIGHTH of Registrant's Articles of Incorporation, as set forth below.
The Adviser's liability for any loss suffered by the Registrant or its
shareholders is set forth in Section 4 of the Advisory Agreement filed
as Exhibit (d) in response to Item 23 of this Registration Statement,
as set forth below.
Section 2-418 of the Maryland General Corporation Law reads as follows:
"2-418 INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.--
(a) In this section the following words have the meaning indicated.
(1) "Director" means any person who is or was a director of a
corporation and any person who, while a director of a
corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger, consolidation, or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of
director in the corporation; and
(ii) When used with respect to a person other than a
director as contemplated in subsection (j), the
elective or appointive office in the corporation held
by the officer, or the employment or agency
relationship undertaken by the employee or agent in
behalf of the corporation.
(iii) "Official capacity" does not include service for any
other foreign or domestic corporation or any
partnership, joint venture, trust, other enterprise, or
employee benefit plan.
(5) "Party" includes a person who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative, or investigative.
(b) Permitted indemnification of director.--
(1) A corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it
is established that:
(i) The act or omission of the director was material to the
matter giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate
dishonesty; or
(ii) The director actually received an improper personal
benefit in money, property, or services; or
(iii) In the case of any criminal proceeding, the director
had reasonable cause to believe that the act or
omission was unlawful.
(2) (i) Indemnification may be against judgments, penalties,
fines, settlements, and reasonable expenses actually
incurred by the director in connection with the proceeding.
(ii) However, if the proceeding was one by or in the right
of the corporation, indemnification may not be made in
respect of any proceeding in which the director shall have
been adjudged to be liable to the corporation.
(3) (i) The termination of any proceeding by judgment, order or
settlement does not create a presumption that the director
did not meet the requisite standard of conduct set forth in
this subsection.
(ii) The termination of any proceeding by conviction, or a
plea of nolo contendere or its equivalent, or an entry of an
order of probation prior to judgment, creates a rebuttable
presumption that the director did not meet that standard of
conduct.
(4) A corporation may not indemnify a director or advance
expenses under this section for a proceeding brought by that
director against the corporation, except:
(i) For a proceeding brought to enforce indemnification
under this section; or
(ii) If the charter or bylaws of the corporation, a
resolution of the board of directors of the corporation, or
an agreement approved by the board of directors of the
corporation to which the corporation is a party expressly
provide otherwise.
(c) No indemnification of director liable for improper personal
benefit.-- A director may not be indemnified under subsection (b)
of this section in respect of any proceeding charging improper
personal benefit to the director, whether or not involving action
in the director's official capacity, in which the director was
adjudged to be liable on the basis that personal benefit was
improperly received.
(d) Required indemnification against expenses incurred in successful
defense.-- Unless limited by the charter:
(1) A director who has been successful, on the merits or
otherwise, in the defense of any proceeding referred to in
subsection (b) of this section shall be indemnified against
reasonable expenses incurred by the director in connection
with the proceeding.
(2) A court of appropriate jurisdiction, upon application of a
director and such notice as the court shall require, may
order indemnification in the following circumstances:
(i) If it determines a director is entitled to
reimbursement under paragraph (1) of this subsection,
the court shall order indemnification, in which case
the director shall be entitled to recover the expenses
of securing such reimbursement; or
(ii) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all
the relevant circumstances, whether or not the director
has met the standards of conduct set forth in
subsection (b) of this section or has been adjudged
liable under the circumstances described in subsection
(c) of this section, the court may order such
indemnification as the court shall deem proper.
However, indemnification with respect to any proceeding
by or in the right of the corporation or in which
liability shall have been adjudged in the circumstances
described in subsection (c) shall be limited to
expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took
place.
(e) Determination that indemnification is proper.--
(1) Indemnification under subsection (b) of this section may not
be made by the corporation unless authorized for a specific
proceeding after a determination has been made that
indemnification of the director is permissible in the
circumstances because the director has met the standard of
conduct set forth in subsection (b) of this section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the
proceeding, or, if such a quorum cannot be obtained, then by
a majority vote of a committee of the board consisting
solely of two or more directors not, at the time, parties to
such proceeding and who were duly designated to act in the
matter by a majority vote of the full board in which the
designated directors who are parties may participate;
(ii) By special legal counsel selected by the board of
directors or a committee of the board by vote as set forth
in subparagraph (i) of this paragraph, or, if the requisite
quorum of the full board cannot be obtained therefor and the
committee cannot be established, by a majority vote of the
full board in which directors who are parties may
participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner
as the determination that indemnification is permissible.
However, if the determination that indemnification is
permissible is made by special legal counsel, authorization
of indemnification and determination as to reasonableness of
expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for
selection of such counsel.
(4) Shares held by directors who are parties to the proceeding
may not be voted on the subject matter under this
subsection.
(f) Payment of expenses in advance of final disposition of action.--
(1) Reasonable expenses incurred by a director who is a party to
a proceeding may be paid or reimbursed by the corporation in
advance of the final disposition of the proceeding upon
receipt by the corporation of:
(i) A written affirmation by the director of the director's
good faith belief that the standard of conduct necessary for
indemnification by the corporation as authorized in this
section has been met; and
(ii) A written undertaking by or on behalf of the director
to repay the amount if it shall ultimately be determined
that the standard of conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph
(1) of this subsection shall be an unlimited general
obligation of the director but need not be secured and may
be accepted without reference to financial ability to make
the repayment.
(3) Payments under this subsection shall be made as provided by
the charter, bylaws, or contract or as specified in
subsection (e) of this section.
(g) Validity of indemnification provision.-- The indemnification and
advancement of expenses provided or authorized by this section
may not be deemed exclusive of any other rights, by
indemnification or otherwise, to which a director may be entitled
under the charter, the bylaws, a resolution of stockholders or
directors, an agreement or otherwise, both as to action in an
official capacity and as to action in another capacity while
holding such office.
(h) Reimbursement of director's expenses while appearing as
witness.-- This section does not limit the corporation's power to
pay or reimburse expenses incurred by a director in connection
with an appearance as a witness in a proceeding at a time when
the director has not been made a named defendant or respondent in
the proceeding.
(i) Director's service to employee benefit plan.-- For purposes of
this section:
(1) The corporation shall be deemed to have requested a director
to serve an employee benefit plan where the performance of
the director's duties to the corporation also imposes duties
on, or otherwise involves services by, the director to the
plan or participants or beneficiaries of the plan:
(2) Excise taxes assessed on a director with respect to an
employee benefit plan pursuant to applicable law shall be
deemed fines; and
(3) Action taken or omitted by the director with respect to an
employee benefit plan in the performance of the director's
duties for a purpose reasonably believed by the director to
be in the interest of the participants and beneficiaries of
the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the corporation.
(j) Officer, employee or agent.-- Unless limited by the charter:
(1) An officer of the corporation shall be indemnified as and to
the extent provided in subsection (d) of this section for a
director and shall be entitled, to the same extent as a
director, to seek indemnification pursuant to the provisions
of subsection (d);
(2) A corporation may indemnify and advance expenses to an
officer, employee, or agent of the corporation to the same
extent that it may indemnify directors under this section;
and
(3) A corporation, in addition, may indemnify and advance
expenses to an officer, employee, or agent who is not a
director to such further extent, consistent with law, as may
be provided by its charter, bylaws, general or specific
action of its board of directors, or contract.
(k) Insurance or similar protection.--
(1) A corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee,
or agent of the corporation, or who, while a director,
officer, employee, or agent of the corporation, is or was
serving at the request, of the corporation as a director,
officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture,
trust, other enterprise, or employee benefit plan against
any liability asserted against and incurred by such person
in any such capacity or arising out of such person's
position, whether or not the corporation would have the
power to indemnify against liability under the provisions of
this section.
(2) A corporation may provide similar protection, including a
trust fund, letter of credit, or surety bond, not
inconsistent with this section.
(3) The insurance or similar protection may be provided by a
subsidiary or an affiliate of the corporation.
(l) Report of indemnification to stockholders.-- Any indemnification
of, or advance of expenses to, a director in accordance with this
section, if arising out of a proceeding by or in the right of the
corporation, shall be reported in writing to the stockholders
with the notice of the next stockholders' meeting or prior to the
meeting."
Article EIGHTH of the Registrant's Articles of Amendment and Restatement of
Articles of Incorporation reads as follows:
(1) To the maximum extent that Maryland law in effect from time
to time permits limitation of the liability of directors and
officers of a corporation, no present or former director or
officer of the Corporation shall be liable to the
Corporation or its stockholders for money damages.
(2) The Corporation shall have the power, to the maximum extent
permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse
reasonable expenses in advance of final disposition of a
proceeding to, (a) any individual who is a present or former
director or officer of the Corporation or (b) any individual
who, while a director or officer of the Corporation and at
the request of the Corporation, serves or has served as a
director, officer, partner or trustee of another
corporation, real estate investment trust, partnership,
joint venture, trust, employee benefit plan or any other
enterprise from and against any claim or liability to which
such person may become subject or which such person may
incur by reason of his status as a present or former
director or officer of the Corporation. The Corporation
shall have the power, with the approval of the Board of
Directors, to provide such indemnification and advancement
of expenses to a person who served a predecessor of the
Corporation in any of the capacities described in (a) or (b)
above and to any employee or agent of the Corporation or a
predecessor of the Corporation.
(3) The provisions of this Article EIGHTH shall be subject to
the limitations of the Investment Company Act.
(4) Neither the amendment nor repeal of this Article EIGHTH, nor
the adoption or amendment of any other provision of the
Charter or Bylaws inconsistent with this Article EIGHTH,
shall apply to or affect in any respect the applicability of
the preceding sections of this Article EIGHTH with respect
to any act or failure to act which occurred prior to such
amendment, repeal or adoption.
Article IX, Section 7 of the Registrant's Amended and Restated By-Laws reads as
follows:
To the maximum extent permitted by Maryland law in effect from
time to time, the Corporation shall indemnify and, without requiring a
preliminary determination of the ultimate entitlement to
indemnification, shall pay or reimburse reasonable expenses in advance
of final disposition of a proceeding to (a) any individual who is a
present or former director or officer of the Corporation and who is
made or threatened to be made a party to the proceeding by reason of
his or her service in any such capacity or (b) any individual who,
while a director or officer of the Corporation and at the request of
the Corporation, serves or has served as a director, officer, partner
or trustee of another corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made or threatened to be made a party to the
proceeding by reason of his or her service in any such capacity. The
Corporation may, with the approval of its Board of Directors or any
duly authorized committee thereof, provide such indemnification and
advance for expenses to a person who served a predecessor of the
Corporation in any of the capacities described in (a) or (b) above and
to any employee or agent of the Corporation or a predecessor of the
Corporation. The termination of any claim, action, suit or other
proceeding involving any person, by judgment, settlement (whether with
or without court approval) or conviction or upon a plea of guilty or
nolo contendere, or its equivalent, shall not create a presumption
that such person did not meet the standards of conduct required for
indemnification or payment of expenses to be required or permitted
under Maryland law, these Bylaws or the Charter. Any indemnification
or advance of expenses made pursuant to this Article shall be subject
to applicable requirements of the 1940 Act. The indemnification and
payment of expenses provided in these Bylaws shall not be deemed
exclusive of or limit in any way other rights to which any person
seeking indemnification or payment of expenses may be or may become
entitled under any bylaw, regulation, insurance, agreement or
otherwise.
Neither the amendment nor repeal of this Article, nor the
adoption or amendment of any other provision of the Bylaws or Charter
inconsistent with this Article, shall apply to or affect in any
respect the applicability of the preceding paragraph with respect to
any act or failure to act which occurred prior to such amendment,
repeal or adoption.
The Advisory Agreement between the Registrant and AllianceBernstein
L.P. provides that AllianceBernstein L.P. will not be liable under the
agreement for any mistake of judgment or in any event whatsoever,
except for lack of good faith, provided that nothing therein shall be
deemed to protect, or purport to protect, AllianceBernstein L.P.
against any liability to the Registrant or its security holders to
which it would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties
thereunder, or by reason of reckless disregard of its duties and
obligations thereunder.
The Distribution Services Agreement between the Registrant and
AllianceBernstein Investments, Inc.("ABI") (formerly known as Alliance
Fund Distributors, Inc.) provides that the Registrant will indemnify,
defend and hold ABI, and any person who controls it within the meaning
of Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands, or liabilities and
any counsel fees incurred in connection therewith) which ABI or any
controlling person may incur arising out of or based upon any alleged
untrue statement of a material fact contained in the Registrant's
Registration Statement, Prospectus or Statement of Additional
Information or arising out of, or based upon any alleged omission to
state a material fact required to be stated in any one of the
foregoing or necessary to make the statements in any one of the
foregoing not misleading.
The foregoing summaries are qualified by the entire text of
Registrant's Articles of Amendment and Restatement of Articles of
Incorporation, which is filed as Exhibit (a) and incorporated by
reference herein, and the Amended and Restated By-Laws, the Advisory
Agreement between Registrant and AllianceBernstein L.P. and the
Distribution Services Agreement between Registrant and ABI which are
filed in response to Item 23.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
In accordance with Release No. IC-11330 (September 2, 1980), the
Registrant will indemnify its directors, officers, investment manager
and principal underwriters only if (1) a final decision on the merits
was issued by the court or other body before whom the proceeding was
brought that the person to be indemnified (the "indemnitee") was not
liable by reason or willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his
office ("disabling conduct") or (2) a reasonable determination is
made, based upon a review of the facts, that the indemnitee was not
liable by reason of disabling conduct, by (a) the vote of a majority
of a quorum of the directors who are neither "interested persons" of
the Registrant as defined in section 2(a)(19) of the Investment
Company Act of 1940 nor parties to the proceeding ("disinterested,
non-party directors"), or (b) an independent legal counsel in a
written opinion. The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers, investment adviser or
principal underwriters in defending a proceeding, upon the undertaking
by or on behalf of the indemnitee to repay the advance unless it is
ultimately determined that he is entitled to indemnification and, as a
condition to the advance, (1) the indemnitee shall provide a security
for his undertaking, (2) the Registrant shall be insured against
losses arising by reason of any lawful advances, or (3) a majority of
a quorum of disinterested, non-party directors of the Registrant, or
an independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the
indemnitee ultimately will be found entitled to indemnification.
The Registrant participates in a Joint directors and officers
liability insurance policy issued by the ICI Mutual Insurance Company.
Coverage under this policy has been extended to directors, trustees
and officers of the investment companies managed by AllianceBernstein
L.P. Under this policy, outside trustees and directors would be
covered up to the limits specified for any claim against them for acts
committed in their capacities as trustee or director. A pro rata share
of the premium for this coverage is charged to each investment company
and to the Adviser.
ITEM 26. Business and Other Connections of Investment Adviser.
The descriptions of AllianceBernstein L.P. under the captions
"Management of the Fund" in the Prospectus and in the Statement of
Additional Information constituting Parts A and B, respectively, of
this Registration Statement are incorporated by reference herein.
The information as to the directors and executive officers of
AllianceBernstein Corporation, the general partner of
AllianceBernstein L.P., set forth in AllianceBernstein L.P.'s Form ADV
filed with the Securities and Exchange Commission on April 21, 1988
(File No. 801-32361) and amended through the date hereof, is
incorporated by reference.
ITEM 27. Principal Underwriters.
(a) ABI, the Registrant's Principal Underwriter in connection with
the sale of shares of the Registrant. ABI also acts as Principal
Underwriter or Distributor for the following investment
companies:
AllianceBernstein Balanced Shares, Inc.
AllianceBernstein Blended Style Series, Inc.
AllianceBernstein Bond Fund, Inc.
AllianceBernstein Cap Fund, Inc.
AllianceBernstein Emerging Market Debt Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Fixed-Income Shares, Inc.
AllianceBernstein Focused Growth & Income Fund, Inc.
AllianceBernstein Global Government Income Trust, Inc.
AllianceBernstein Global Health Care Fund, Inc.
AllianceBernstein Global Strategic Income Trust, Inc.
AllianceBernstein Global Technology Fund, Inc.
AllianceBernstein Greater China '97 Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein High Yield Fund, Inc.
AllianceBernstein Institutional Funds, Inc.
AllianceBernstein Intermediate California Municipal Portfolio(1)
AllianceBernstein Intermediate Diversified Municipal Portfolio(1)
AllianceBernstein Intermediate New York Municipal Portfolio(1)
AllianceBernstein International Portfolio(1)
AllianceBernstein International Growth Fund, Inc.
AllianceBernstein International Research Growth Fund, Inc.
AllianceBernstein Large-Cap Growth Fund, Inc.
AllianceBernstein Mid-Cap Growth Fund, Inc.
AllianceBernstein Municipal Income Fund, Inc.
AllianceBernstein Municipal Income Fund II
AllianceBernstein Real Estate Investment Fund, Inc.
AllianceBernstein Short Duration Portfolio(1)
AllianceBernstein Tax-Managed International Portfolio(1)
AllianceBernstein Trust
AllianceBernstein Utility Income Fund, Inc.
AllianceBernstein Variable Products Series Fund, Inc.
Sanford C. Bernstein Fund II, Inc.
The AllianceBernstein Pooling Portfolios
The AllianceBernstein Portfolios
----------
(1) This is a retail Portfolio of Sanford C. Bernstein Fund, Inc. which
consists of Classes A, B and C shares.
(b) The following are the Directors and Officers of ABI, the
principal place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT
---- ----------- ----------
Directors
Marc O. Mayer Chairman of the Board President and
and Director Chief Executive
Officer
Mark R. Manley Director
Ranjani Nagaswami Vice Chairman and Director
Officers
Marc O. Mayer Chairman of the Board President and
Chief Executive
Officer
Ranjani Nagaswami Vice Chairman
Frederic L. Bloch Executive Vice President and
President, U. S. Sales
Richard A. Davies Executive Vice President and
Managing Director
Gerald M. Lieberman Executive Vice President
and Chief Operating Officer
Kurt H. Schoknecht Executive Vice President
Frank Speno Executive Vice President
Andrew L. Gangolf Senior Vice President and Assistant Secretary
Assistant General Counsel
Emilie D. Wrapp Senior Vice President, Secretary
Assistant General Counsel and
Assistant Secretary
Daniel A. Notto Senior Vice President,
Counsel and Assistant
Secretary
Christopher S. Alpaugh Senior Vice President
Audie G. Apple Senior Vice President
Colin C. Aymond Senior Vice President
Steven R. Barr Senior Vice President and
Assistant Secretary
Adam J. Beaudry Senior Vice President
Amy I. Belew Senior Vice President
Susan H. Burton Senior Vice President
Peter G. Callahan Senior Vice President
Russell R. Corby Senior Vice President
John W. Cronin Senior Vice President
Robert J. Cruz Senior Vice President
Jennifer M. DeLong Senior Vice President
David B. Edlin Senior Vice President
John C. Endahl Senior Vice President
Adam E. Engelhardt Senior Vice President
John Edward English Senior Vice President
Edward J. Farrell Senior Vice President and
Controller
Eric W. Frasier Senior Vice President
Donald N. Fritts Senior Vice President
Kenneth L. Haman Senior Vice President
Joseph P. Healy Senior Vice President
Mary V. Kralis Hoppe Senior Vice President
Scott Hutton Senior Vice President
Geoffrey L. Hyde Senior Vice President
Robert H. Joseph, Jr. Senior Vice President and
Assistant Treasurer
Victor Kopelakis Senior Vice President
Henry Michael Lesmeister Senior Vice President
David W. Levi Senior Vice President
Eric L. Levinson Senior Vice President
James F. Lyons Senior Vice President and
Regional/Regent
Matthew P. Mintzer Senior Vice President
Thomas F. Monnerat Senior Vice President
Joanna D. Murray Senior Vice President
Jeffrey A. Nye Senior Vice President
John J. O'Connor Senior Vice President
Danielle Pagano Senior Vice President
Catherine N. Peterson Senior Vice President
Mark A. Pletts Senior Vice President
James J. Posch Senior Vice President and
Assistant Secretary
Stephen C. Scanlon Senior Vice President
John P. Schmidt Senior Vice President
Eileen B. Sebold Senior Vice President
Gregory K. Shannahan Senior Vice President
Richard J. Sidell Senior Vice President
Andrew D. Strauss Senior Vice President
Peter J. Szabo Senior Vice President
Joseph T. Tocyloski Senior Vice President
David R. Turnbough Senior Vice President
Craig E. Welch Senior Vice President
Mark D. Gersten Vice President and
Treasurer
Patrick E. Ryan Vice President and
Chief Financial Officer
Jane E. Ackerman Vice President
Albert J. Angelus Vice President
Margaret M. Bagley Vice President
Kenneth F. Barkoff Vice President
Peter J. Barron Vice President
Laura J. Beedy Vice President
Joseph J. Bilello Vice President
Gregory P. Best Vice President
Robert G. Bjorge Vice President
Michael J. Bodnar Vice President
Richard A. Brink Vice President
Shaun D. Bromley Vice President
Brian Buehring Vice President
Thomas E. Callahan Vice President
Michele R. Cameron Vice President
Kevin T. Cannon Vice President
Christopher C. Cavanaugh Vice President
Alice L. Chan Vice President
Candice (Foong-Kuen) Choy Vice President
Flora Chuang Vice President
Kyle E. Clapp Vice President
Michael F. Connell Vice President
Joseph D. Connell, Jr. Vice President
Kenneth J. Connors Vice President
Michael C. Conrath Vice President
Dwight P. Cornell Vice President
Robert A. Craft Vice President
Michael R. Crimmins Vice President
David E. Crowdus Vice President
John D. Curry Vice President
Heather R. Dadey Vice President
Brett E. Dearing Vice President
Raymond A. Decker Vice President
Stephen J. Dedyo Vice President
Aaron E. Deedon Vice President
Darren K. DeSimone Vice President
Janet B. DiBrita Vice President
Ronald G. Dietrich Vice President
Carmela Di Meo Vice President
Joseph T. Dominguez Vice President
Paul D. Eck Vice President
Robert E. Emrich Vice President
Bernard J. Eng Vice President
Daniel Ennis Vice President
Michael J. Eustic Vice President
Antonio Fernandez Gutierrez Vice President
Richard Fraelick Vice President
Kevin T. Gang Vice President
Daniel P. Gangemi Vice President
Sheldon Gao Vice President
Christine E. Gaze Vice President
Mark A. Gessner Vice President
Thomas R. Graffeo Vice President
Matthew M. Green Vice President
John G. Hansen Vice President
Michael S. Hart Vice President
Melanie M. Hoppe Vice President
George R. Hrabovsky Vice President
David A. Hunt Vice President
Dinah J. Huntoon Vice President
Anthony D. Ialeggio Vice President
Eric S. Indovina Vice President
Theresa Iosca Vice President
Oscar J. Isoba Vice President
Kumar Jagdeo II Vice President
Kevin D. Kelly Vice President
Christopher W. Kilroy Vice President
Jung M. Kim Vice President
Joseph B. Kolman Vice President
Ted R. Kosinski Vice President
Jeffrey J. Lamb Vice President
Christopher J. Larkin Vice President
Laurel E. Lindner Vice President
James M. Liptrot Vice President and
Assistant Controller
Armando C. Llanes Vice President
Christine A. Long Vice President
Jason N. Longo Vice President
Montana W. Low Vice President
Todd M. Mann Vice President
Silvia Manz Vice President
Osama Mari Vice President
Shannon M. Massey Vice President
Shaun C. McDonald Vice President
Kevin M. McGarry Vice President
Daniel K. McGouran Vice President
Craig S. McKenna Vice President
Steven M. Miller Vice President
Troy E. Mosconi Vice President
Paul S. Moyer Vice President
Wendy Kam Mui Li Vice President
John F. Multhauf Vice President
Andrew C. Murphy Vice President, Chief
Compliance Officer and
Assistant Secretary
Jamie A. Nieradka Vice President
Suzanne E. Norman Vice President
Timothy J. O'Connell Vice President
Joseph D. Ochoa Vice President
John J. Onofrio Vice President and
Assistant Treasurer
David D. Paich Vice President
Todd P. Patton Vice President
Leo J. Peters IV Vice President
Thomas C. Pfeifer Vice President
John D. Prosperi Vice President
Carol H. Rappa Vice President
Juhi Rathee Vice President
Michelle T. Rawlick Vice President
Heidi A. Richardson Vice President
James A. Rie Vice President
Joseph P. Rodriguez Vice President
Miguel A. Rozensztroch Vice President
Cynthia A. Sachs Vice President
Michael D. Sanders Vice President
Thomas E. Sawyer Vice President
Gordon R. Schonfeld Vice President
Stuart L. Shaw Vice President
Daniel S. Shikes Vice President
Karen Sirett Vice President
Rayandra E. Slonina Vice President
Elizabeth M. Smith Vice President
Ben H. Stairs Vice President
Eileen Stauber Vice President
Jason P. Stevens Vice President
Brian D. Stokes Vice President
Michael B. Thayer Vice President
Elizabeth K. Tramo Vice President
Benjamin H. Travers Vice President
James R. Van Deventer Vice President
Elsia M. Vasquez Vice President
Thomas M. Vitale Vice President
Marie R. Vogel Vice President
Wayne W. Wagner Vice President
Mark E. Westmoreland Vice President
Paul C. Wharf Vice President
Christian G. Wilson Vice President
Kevin M. Winters Vice President
Joanna Wong Vice President
Alissa M. Worley Vice President
Jennifer M. Yi Vice President
Kimberly D. Alfano Assistant Vice
President
Moshe Aronov Assistant Vice
President
Jire J. Baran Assistant Vice
President
Gian D. Bernardi Assistant Vice
President
Susan J. Bieber Assistant Vice
President
Mark S. Burns Assistant Vice
President
Daniel W. Carey Assistant Vice
President
Maria Carreras Assistant Vice
President
Judith A. Chin Assistant Vice
President
Robyn L. (Cohen) Barger Assistant Vice
President
Kimberly A. Collins Assistant Vice
President
John M. D'Agostino Assistant Vice
President
Lauren B. Danziger Assistant Vice
President
Raymond L. DeGrazia Assistant Vice
President
Marc DiFilippo Assistant Vice
President
Ralph A. DiMeglio Assistant Vice
President
Diana Eriksen Assistant Vice
President
Robert A. Fiorentino Assistant Vice
President
Lydia A. Fisher Assistant Vice
President
Jose R. Garcia Assistant Vice
President
Stephanie Y. Giaramita Assistant Vice
President
Michael F. Greco Assistant Vice
President
Kelly P. Guter Assistant Vice
President
Terry L. Harris Assistant Vice
President
Junko Hisamatsu Assistant Vice
President
Melanie M. Hoppe Assistant Vice
President
Arthur F. Hoyt, Jr. Assistant Vice
President
Grace Huaman Assistant Vice
President
Joseph D. Kearney Assistant Vice
President
Elizabeth E. Keefe Assistant Vice
President
Junko Kimura Assistant Vice
President
Stephen J. Laffey Assistant Vice Assistant Secretary
President and Counsel
Gina L. Lemon Assistant Vice
President
Evamarie C. Lombardo Assistant Vice
President
Edward R. Lupo Assistant Vice
President
Matthew J. Malvey Assistant Vice
President
Danielle F. Marx Assistant Vice
President
Christine M. McQuinlan Assistant Vice
President
Assimina Morales Assistant Vice
President
Christina A. Morse Assistant Vice Assistant Secretary
President and Counsel
Jennifer A. Mulhall Assistant Vice
President
Jason S. Muntner Assistant Vice
President
Sharon E. Murphy Assistant Vice
President
Isabella Nunes Assistant Vice
President
Alex E. Pady Assistant Vice
President
Brian W. Paulson Assistant Vice
President
Ling Shan E. Phua Assistant Vice
President
Neal B. Picker Assistant Vice
President
Mark A. Quarno Assistant Vice
President
Peter V. Romeo Assistant Vice
President
Randi E. Rothstein Assistant Vice
President
Jessica M. Rozman Assistant Vice
President
Daniel A. Rudnitsky Assistant Vice
President
Shane M. Sanders Assistant Vice
President
Jennifer E. Scherz Assistant Vice
President
Melissa L. Shemanski Assistant Vice
President
Michelle M. Siddons Assistant Vice
President
Praveen Singh Assistant Vice
President
Orlando Soler Assistant Vice
President
Kurt W. Stam Assistant Vice
President
Nancy D. Testa Assistant Vice
President
Kai T. Tham Assistant Vice
President
Jay D. Tini Assistant Vice
President
William Tohme Assistant Vice
President
Ellen Tobin Assistant Vice
President
Kari-Anna Towle Assistant Vice
President
Kayoko Umino Assistant Vice
President
Laurence Vandecasteele Assistant Vice
President
Eric J. Wright Assistant Vice
President
Thomas M. Zottner Assistant Vice
President
Mark R. Manley Secretary
Colin T. Burke Assistant Secretary
Adam R. Spilka Assistant Secretary
(c) Not applicable.
ITEM 28. Location of Accounts and Records.
The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained as follows: journals, ledgers, securities records and
other original records are maintained principally at the offices of
AllianceBernstein Investor Services, Inc., P.O. Box 786003, San Antonio, Texas
78278-6003 and at the offices of The Bank of New York, the Registrant's
Custodian, One Wall Street, New York, New York, 10286. All other records so
required to be maintained are maintained at the offices of AllianceBernstein
L.P., 1345 Avenue of the Americas, New York, New York, 10105.
ITEM 29. Management Services.
Not applicable.
ITEM 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Amendment to its Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City of New York and State of New York, on
the 30th day of August, 2006.
ALLIANCEBERNSTEIN GLOBAL
RESEARCH GROWTH FUND, INC.
By: Marc O. Mayer*
--------------
Marc O. Mayer
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
1. Principal Executive Officer:
Marc O. Mayer* President and August 30, 2006
Chief Executive
Officer
2. Principal Financial and
Accounting Officer:
/s/ Joseph J. Mantineo Treasurer and August 30, 2006
----------------------- Chief Financial
Joseph J. Mantineo Officer
3. All of the Directors:
Ruth Block*
David H. Dievler*
John H. Dobkin*
Michael J. Downey*
William H. Foulk, Jr.*
D. James Guzy*
Nancy P. Jacklin*
Marc O. Mayer*
Marshall C. Turner, Jr.*
*By: /s/ Andrew L. Gangolf August 30, 2006
---------------------
Andrew L. Gangolf
Attorney-in-Fact
| 485APOS | Last “Page” of 81 | TOC | 1st | Previous | Next | ↓Bottom | Just 81st |
|---|
Index to Exhibits
Exhibit No. Description of Exhibits
(a) Articles of Amendment and Restatement
(b) Amended and Restated By-Laws
Other Exhibits: Powers of Attorney
SK 00250 0157 685683
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘485APOS’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/31/10 | | 76 | | | | | N-CSRS, NSAR-A |
| | 12/31/08 | | 26 | | 61 | | | N-CSRS, NSAR-A |
| | 1/1/08 | | 76 |
| | 11/1/06 | | 2 | | 75 | | | 485BPOS |
| | 9/30/06 | | 6 | | 56 | | | N-Q |
| Filed on: | | 8/30/06 | | 1 | | 80 | | | N-PX |
| | 7/5/06 | | 26 | | 61 |
| | 6/30/06 | | 26 | | 77 | | | 24F-2NT, N-CSR, N-PX, NSAR-B |
| | 6/14/06 | | 76 |
| | 5/31/06 | | 26 | | 76 |
| | 5/4/06 | | 26 | | 61 |
| | 4/21/06 | | 26 | | 61 |
| | 4/12/06 | | 26 | | 61 |
| | 2/23/06 | | 79 | | | | | 497 |
| | 2/1/06 | | 79 |
| | 1/26/06 | | 26 | | 61 |
| | 1/11/06 | | 26 | | 61 |
| | 12/31/05 | | 7 | | 76 | | | N-CSRS, NSAR-A |
| | 10/19/05 | | 26 | | 61 |
| | 8/30/05 | | 26 | | 61 | | | N-PX |
| | 6/30/05 | | 76 | | | | | 24F-2NT, N-CSR, N-PX, NSAR-B |
| | 4/11/05 | | 26 | | 61 |
| | 2/28/05 | | 79 | | | | | 485BPOS, NSAR-A |
| | 2/2/05 | | 26 | | 61 |
| | 1/28/05 | | 79 |
| | 11/1/04 | | 79 | | | | | 485BPOS |
| | 10/21/04 | | 76 |
| | 10/15/04 | | 24 | | 76 |
| | 9/29/04 | | 26 | | 61 |
| | 9/7/04 | | 26 | | 76 |
| | 9/1/04 | | 26 | | 61 | | | 497 |
| | 6/30/04 | | 76 | | | | | 24F-2NT, N-CSR, N-PX, NSAR-B |
| | 6/22/04 | | 26 | | 61 |
| | 2/20/04 | | 26 | | 61 |
| | 2/10/04 | | 26 | | 61 |
| | 1/1/04 | | 26 | | 76 |
| | 12/18/03 | | 26 | | 61 |
| | 12/11/03 | | 76 |
| | 10/2/03 | | 26 | | 61 |
| | 9/2/03 | | 24 | | 76 |
| | 3/31/03 | | 76 |
| | 7/12/02 | | 79 | | | | | N-1A/A |
| | 7/10/02 | | 76 |
| | 7/9/02 | | 76 | | 79 |
| | 4/8/02 | | 26 | | 61 |
| | 3/22/02 | | 76 |
| | 9/11/01 | | 76 |
| | 7/18/01 | | 26 | | 61 |
| | 10/6/00 | | 79 |
| List all Filings |
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