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AllianceBernstein.com Global Capital Markets Outlook

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Important Information

This document has been prepared by AllianceBernstein Australia Limited (“ABAL”)—ABN 53 095 022 718,

AFSL 230 698. Information in this document is only intended for persons that qualify as “wholesale clients,” as

defined by the Corporations Act 2001, and is not to be construed as advice. This document is provided solely for

informational purposes and is not an offer to buy or sell securities. The information, forecasts and opinions set

forth in this document have not been prepared for any recipient’s specific investment objectives, financial

situation or particular needs. Neither this document nor the information contained in it are intended to take the

place of professional advice. You should not take action on specific issues based on the information contained in

this document without first obtaining professional advice.

Past performance does not guarantee future results. Projections, although based on current information, may not

be realized. Information, forecasts and opinions can change without notice and ABAL does not guarantee the

accuracy of the information at any particular time. Although care has been exercised in compiling the information

contained in this document, ABAL does not warrant that this document is free from errors, inaccuracies or

omissions. ABAL disclaims any liability for damage or loss arising from reliance upon any matter contained in

this document except for statutory liability which cannot be excluded.

No reproduction of the materials in this document may be made without the express written permission of ABAL.

This information is provided for persons in Australia only and is not being provided for the use of any person who

is in any other country.

1


The Big Picture

Current analysis does not guarantee future results.

As of September 30, 2014

Source: AllianceBernstein

Global growth expected at 2.7% in 2014, rising to 3.2% in 2015

Monetary policy in major developed economies is generally accommodative, but diverging

Interest rates remain low, but US official rates expected to begin rising in 1H:2015

Bond investors should position for a gradual increase in rates

Balance credit and interest-rate risk

Go global to capitalize on diverging policies

Be selective and avoid stretching for yield

Diversify across sectors to benefit from relative value opportunities

Equity-market returns should be attractive, but muted going forward

Global valuations are extended, but investment opportunities remain

Corporate fundamentals remain solid, and earnings growth should drive returns

The environment increasingly favors active management and high active share to generate alpha

2


2.9%

5.7%

1.0%

3.6%

1.3%

1.0%

1.2%

-0.3%

-1.2%

4.1%

-0.6%

5.4%

0.3%

9.1%

5.5%

-20.00% 0.00% 20.00%

4.9%

YTD:2014 Returns

Returns in Australian dollars

Investor Concerns Undermine Risk Assets…

3Q:2014 Returns

Japan

Global High Yield

US

Euro Area

Emerging-Market Debt

Global Corporates

Europe

World

Japan Equities

Credit

Government

Bonds

Commodities

Alternatives

US

Australia

9.0%

6.0%

-3.5%

5.6%

12.1%

4.3%

5.0%

7.7%

8.4%

6.0%

4.7%

2.3%

1.7%

0.3%

10.8%

6.2%

-10.00% 10.00% 30.00%

Global REITs**

TIPS*

Past performance does not guarantee future results.


Global High Yield, Emerging-Market Debt, Global Corporates, US, Japan and Euro Area government bonds in hedged AUD. All other returns are in unhedged AUD.

An investor cannot invest directly in an index and its performance does not reflect the performance of any AllianceBernstein portfolio. The unmanaged index does not reflect

fees and expenses associated with the active management of a portfolio.

*Treasury Inflation-Protected Securities **Global Real Estate Investment Trusts

Source: Barclays, Bloomberg, FTSE, MSCI, S&P Dow Jones, TOPIX and AllianceBernstein. Please refer to Index Definitions in Appendix

Emerging Markets

Australia

3


US High

Yield

…in Part Due to Questions About Valuations

Historical analysis does not guarantee future results.


Right display VIX CBOE Market: Volatility Index; US High Yield represented by Barclays US Corporate High-Yield Index. An investor cannot invest directly in an index and its

performance does not reflect the performance of any AllianceBernstein portfolio. The unmanaged index does not reflect fees and expenses associated with the active

management of a portfolio.

Source: Barclays, Bloomberg, Investment Week, The New York Times and AllianceBernstein

…and Markets Remain Largely Complacent

0%

5%

10%

15%

0

20

40

60

96 99 02 05 08 11 14

On

e-Y

ea

r Vo

latility

Ind

ex

VIX (left

scale)

The Choice: Expensive Assets or

Negative Returns? August 4, 2014

Welcome to the Everything Boom, or

Maybe the Everything Bubble July 7, 2014

S&P 500 Rises to Record as

Treasuries Gain, Dollar Slips September 5, 2014

Investors Seem Worried About Current Valuations…

4


Continued Moderate—but Uneven—Global Growth

AllianceBernstein World Economic Growth Forecast Calendar Year Percentage Change

Historical analysis and current forecasts do not guarantee future results.

As of October 1, 2014

*Emerging Europe, Middle East and Africa (the forecast aggregate includes Hungary, Poland, Turkey, Russia, and South Africa)


6.0%

3.1%

2.7%

2.5%

2.3%

1.7%

1.1%

1.0%

0.8%

6.0%

2.9%

3.2%

3.9%

2.5%

2.1%

1.7%

1.9%

1.3%

Asia ex Japan

United Kingdom

Global

United States

Canada

EEMEA*

Japan

Latin America

Euro Area

AllianceBernstein 2014

AllianceBernstein 2015

5



Left display: Quarter-over-quarter annualized growth through September 30, 2014; right display as of September 30, 2014. Numbers might not sum due to rounding.

Source: Haver Analytics, US Bureau of Economic Analysis and AllianceBernstein

US: Economic Growth Should Continue to Improve

4.5 3.5

-2.1

4.6

3Q13 4Q13 1Q14 2Q14

Public

Private

Budget Passage

Debt Ceiling Debate

Tax Rate Increase Impact Geopolitical

Concerns

Bad Weather

Geopolitical

Concerns

Growth Has Been Better Than You May Have Thought

Resurgent Private Sector, Modest Public Contribution

Real Gross Domestic Product (GDP) Growth

1.7

1.1

0.3

0.3

1.8

2.0

0.1

0.1

0.5

0.4

1 2

Investment HousingConsumption Net ExportsGovernment

2H:14

Forecast

2015

Forecast

Total 4.5%

Total 3.9%

6


15

16

17

18

50

70

90

110

00 02 04 06 08 10 12 14

Se

aso

na

lly A

dju

ste

d C

ha

nge

, Pe

rcen

t

Ind

ex

US: Strong Support for Private-Sector Expansion

Historical analysis does not guarantee future results.

Left display: consumer sentiment as of September 30, 2014, HFO through June 30, 2014; middle and right displays through September 30, 2014

*University of Michigan Consumer Sentiment Index. **Household Financial Obligation Ratio.

†Purchasing Managers’ Index. ‡National Association of Home Builders (NAHB) Housing Market Index (Expectations for Sales of New Homes—Diffusion Index).

Source: Haver Analytics, Institute for Supply Management, University of Michigan, US Bureau of Labor Statistics, US Federal Reserve Board and AllianceBernstein

0

10

20

30

40

50

60

70

80

01 03 05 07 09 11 13

Ind

ex

New Home Sales Expectations‡

Manufacturing PMI†

30

35

40

45

50

55

60

65

00 02 04 06 08 10 12 14

Ind

ex

Consumer

Sentiment

(Left Scale)*

Consumer Indicators

HFO**

7


0

1

2

3

4

5

00 02 04 06 08 10 12 14

Yo

Y P

erc

en

t C

ha

nge

US: Employment Discussion Turns from Quantity to Quality


Left and top right displays through September 30, 2014; bottom right display through August 31, 2014

*Interpolated based on US Bureau of Labor Statistics (BLS) forecast

Source: BLS, Haver Analytics and AllianceBernstein

When Will the Cyclically Unemployed Return?

The Overall Jobs Picture Continues to Improve

4

6

8

10

12

14

16

18

03 04 05 06 07 08 09 10 11 12 13 14

Pe

rcen

t

Unemployment

Rate

Underemployment Rate

62

63

64

65

66

Dec2008

Aging Cyclical Others Dec2014*

Pe

rcen

t

No Broad-Based Wage Pressures Evident

Labor Force Participation Rate

Average Hourly Earnings

8


US Rates: A Long Path to “Normal,” as Market/Fed Debate Continues

Current analysis and forecasts do not guarantee future results.

Left display as of October 2, 2014. Right display as of September 30, 2014

An investor cannot invest directly in an index and its performance does not reflect the performance of any AllianceBernstein portfolio. The unmanaged index does not

reflect fees and expenses associated with the active management of a portfolio.

Source: Barclays, Bloomberg, US Federal Reserve and AllianceBernstein

Sep 30,

2014

Yield

Total Return

1 Year 3 Year 5 Year

US 5-Year 1.76 1.54 1.68 2.19

US 10-Year 2.49 0.17 0.53 1.28

US 30-Year 3.20 –1.87 –1.42 –0.37

Projected Total Return (Percent)

●

●

●

●

●●● ●●●

●●

● ●

● ●●

●●●

● ●●

● ●

●●

●●

●

●●●●

● ●

●●●

●● ●

● ●●●

● ●

●●●●●●●●●●●●●●●● ●● 0

1

2

3

4

5

2014 2015 2016 2017

Pe

rcen

t

Federal Funds Rate at Year-End

Fed Funds Median

Market Expectations

9


Policies Begin to Diverge Globally, but Remain Accommodative Overall


Left display through August 31, 2014. Tokyo-area CPI for June used to estimate national reading for June; right display through June 30, 2014

*Value-Added Tax

Source: Bloomberg, Cabinet Office Government of Japan, CEIC Data, Eurostats, Haver Analytics, Ministry of Internal Affairs and Communications Japan, Thomson Reuters

Datastream and AllianceBernstein

…Lead to More Stimulus

-5

5

15

25

35

08 09 10 11 12 13 14P

erc

en

t o

f G

DP

Japan

UK

US

Euro

Total

Fears of Deflation…

G4 Aggregate Change in Base Money as a Percent of GDP

-3

-2

-1

0

1

2

3

4

5

00 02 04 06 08 10 12 14

Headline Inflation

Japan

Europe

Excluding

VAT*-Hike

Impact

Yo

Y P

erc

en

t C

ha

nge

10


Emerging Markets: No Urgency to Tighten Monetary Policy in Most Cases

-2.5

-1.5

-0.5

EM

Asia

Chin

a

Bra

zil

Lata

m

EE

ME

A

Russia

Ye

ar-

to-d

ate

Cha

nge

(%

)

Revisions to 2014 Consensus Growth

Forecasts

Expected Policy Rate Changes

Inflation

0

2

4

6

8

10

12

> 5

0cu

t

0-2

5cu

t

no

ch

an

ge

25

hik

e

>2

5h

ike

Num

be

r o

f C

ou

ntr

ies


As of August 31, 2014

Source: Consensus Economics and AllianceBernstein

0

3

6

9

12

00 02 04 06 08 10 12 14

Ye

ar-

ove

r-Y

ea

r (%

)

11


Asia: Underlying Growth Dynamics Worsen

Negative Output Gaps Widen Asia Ex-China/India

12

(4)

(2)

0

2

4

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

% G

DP


Source: CEIC and AllianceBernstein


Asia: A Weak Export Recovery Cycle

13

Asian Exports & Leading Indicator

(30)

(20)

(10)

0

10

20

30

40

50(30)

(20)

(10)

0

10

20

30

40

50

04 05 06 07 08 09 10 11 12 13 14 15

Yo

Y %

Cha

nge

Yo

Y %

Cha

nge

Asia Exports (3MMA) Korea Inventory/Shipment Ratio (Lead 6 months, 3MMA, right scale)


Source: CEIC and AllianceBernstein

AllianceBernstein.com Global Capital Markets Outlook 14

Australia: Currency Remains High Relative to Fundamentals

Key Commodities: Iron Ore, Coal, (and soon) LNG*

40

60

80

100

120

140

160

180

200

08 09 10 11 12 13

US

D/M

T

Iron Ore

Thermal Coal

*Data through September 29, 2014

**Actual terms of trade data through Q2-2014, AB Estimate for Q3. Exchange rate and interest-rate data through September 30, 2014.

Source: Datastream, CEIC, Bloomberg, National Sources, AllianceBernstein Estimates

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

20

40

60

80

100

120

140

160

180

85 88 91 94 97 00 03 06 09 12

Ind

ex

Model

Deviation: Actual

vs Model

AUD REER: Simple Valuation Model**

Actual

AllianceBernstein.com Global Capital Markets Outlook 15

Mortgage Approvals: Owner-Occupiers vs. Investors*

Australia: Housing Causes Headaches (again!!)

*Housing finance data through August 2014.

**Household Disposable Income, excluding income of unincorporated enterprises. Data through Q2-2014

Source: Datastream, Bloomberg, Australian Bureau of Statistics

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

05 07 09 11 13 15

Va

lue

, $

m

Upgraders

Investors

-5%

+4%

+9%

First Home Buyers

Q1-12 to

Q4-13:

+27%

+50%

-6%

Q4-13 to

Q3-14:

Household Debt: Percent of HDI**

4

6

8

10

12

14

16

18

20

79 84 89 94 99 04 09 14

0

20

40

60

80

100

120

140

160

Debt-to-

Income Ratio

(LHS)

Interest Payments to

Income (RHS)


Policy Divergence Creates Active Opportunities in Global Bonds



*Returns represented by respective Barclays government bond indices within each country. A credit rating is a measure of the quality and safety of a bond or portfolio, based on

the issuer’s financial condition. AAA is highest (best) and D is lowest (worst). An investor cannot invest directly in an index and its performance does not reflect the performance of

any AllianceBernstein portfolio. The unmanaged index does not reflect fees and expenses associated with the active management of a portfolio.

Source: Barclays, Bloomberg and AllianceBernstein

10-Year Yield Rating

Australia 3.51 AAA

US 2.54 AAA

Canada 2.20 AAA

Germany 0.95 AAA

UK 2.45 AA+

France 1.29 AA+

New Zealand 4.20 AA

Japan 0.53 AA–

Spain 2.14 BBB

Italy 2.33 BBB

Portugal 3.15 BB

Yields Influenced by Monetary Policies…

…and Drive Diverse Return Patterns over Time

Global Bond Returns Hedged to USD (Percent)*

Best

Performer

Worst

Performer

Gap between best and worst

2010 2011 2012 2013 YTD 2014

UK

7.2

UK

16.1

Euro Area

11.2

Euro Area

2.5

Euro Area

10.0

US

5.9

US

9.8

UK

2.4

Japan

2.3

UK

7.2

Canada

5.6

Australia

8.9

Japan

2.2

Australia

–2.4

Australia

4.1

Japan

2.9

Canada

8.3

US

2.0

US

–2.8

Canada

4.1

Euro Area

1.0

Japan

2.6

Australia

1.4

Canada

–3.1

US

3.1

Australia

0.3

Euro Area

2.6

Canada

1.4

UK

–4.4

Japan

2.4

6.9 13.5 9.8 6.8 7.6

16


Global Bonds: Attractive Risk/Return Characteristics


As of December 31, 2013

Returns represented by Barclays US Aggregate Bond Index and Barclays Global Aggregate Bond Index Hedged to USD. An investor cannot invest directly in an index and

its performance does not reflect the performance of any AllianceBernstein portfolio. The unmanaged index does not reflect fees and expenses associated with the active

management of a portfolio.

Source: Barclays and AllianceBernstein

2.4%

-0.9%

2.2%

-0.6%

Average Quarterly ReturnWhen US Aggregate Index

Was Positive

Average Quarterly ReturnWhen US Aggregate Index

Was Negative

US Aggregate Index Global Aggregate Index

Global Bonds Capture Greater Upside and Less Downside

Up Capture: 94%

Down Capture: 67%

Up vs. Down Capture: March 1990–December 2013

How Much Global?

Returns Hedged to USD: 1994–2013

0%

1%

2%

3%

4%

5%

6%

7%

1.5

1.6

1.7

1.8

1.9

2.0

100 0R

atio

Return

Volatility

Return/Risk

(Left Scale)

Percent Global

0 20 40 60 80 100

17


Diversification Creates a Broader Opportunity Set

Yield Differentials Can Be Significant Within Each Sector*

2.1 1.6

3.8

2.4

3.6

1.9

0.8

6.9

5.4

9.2

6.3

4.9 5.0

3.3

10.6 9.8

14.1

14.1 11.3

10.0

5.7

0

5

10

15

EMLocal

EMCorps.

EMHY

USHY

BankLoans

EURHY

US IGCorps.

Perc

ent

Index Average Yield to Worst

Opportunities Should Be Evaluated Across Issuers

Low Medium High

Yie

ld

Hig

h

Mediu

m

Low

Holdings are subject to change. Current analysis does not guarantee future results. Historical information provided for illustrative purposes only.

As of December 31, 2013

Emerging-market local is represented by J.P. Morgan GBI-EM (since 2002) and J.P. Morgan ELMI+ (prior to 2002); emerging-market corporates by J.P. Morgan CEMBI Broad

Diversified; US high yield by Barclays US Corporate High-Yield; bank loans by Credit Suisse Leveraged Loan; Pan-European high yield by Barclays Pan-European High-Yield;

US mortgage-backed securities by Barclays US MBS; global governments (hedged) by Barclays Global Treasury; US investment-grade corporates by Barclays US Corporate

Investment Grade; and commercial mortgage-backed securities by Barclays CMBS. An investor cannot invest directly in an index and its performance does not reflect the

performance of any AllianceBernstein portfolio. An unmanaged index does not reflect fees and expenses associated with the active management of a portfolio.

*The bottom range is the fifth percentile and the top range is the 95th percentile of the yield-to-worst data for the indices.

Source: Barclays, Credit Suisse, J.P. Morgan and AllianceBernstein

Risk

18


The Fixed-Income Investor’s Rising-Rate Playbook


For illustrative purposes. As of September 30, 2014


Rates Credit

Globalize

Position along the yield

curve: take advantage of roll

Avoid crowded trades

Loans

CCC-rated bonds

Alternative strategies:

understand your approach

Diversify across sectors

19


Attractive Equity Returns Still Likely, Even with Current Valuations

Past performance and current forecasts do not guarantee future results.

Left display as of September 30, 2014; right displays as of August 31, 2014.



*Five-year annualized expected return for US equities uses AllianceBernstein proprietary Capital Markets Engine forecasts.

**Average S&P 500 and MSCI World valuations since 1970, and MSCI Emerging Markets valuations since January 1988

†Trailing 12-month EPS; next 12 months consensus EPS growth is the next four quarters’ consensus EPS versus the current trailing 12-month EPS.

Source: Bloomberg, Center for Research in Security Prices (CRSP), Cornerstone Macro, MSCI, S&P Dow Jones and AllianceBernstein

S&P 500 Returns: Attribution by Source

26.5 15.1

2.1 16.0

32.4

20.4

8.3 6.8

–20

–10

0

10

20

30

40

2009 2010 2011 2012 2013 2014 2015 2016

Perc

ent

YTD 5-Year

Expected

Return*

Equity Valuations Are Extended**—Particularly in US

Earnings per Share (EPS)† Have Continued to Rise

12.6

2.7

11.1

2.1

9.6

1.7

0

2

4

6

8

10

12

14

Price/Cash Earnings Price/Book

US

Global

EM

0

40

80

120

160

95 00 05 10 15U

SD

Total Return Earnings Growth Valuation Changes Dividends

Equity Returns Are Driven by Different Factors over Time

S&P 500: +8% MSCI EAFE: +18%

MSCI EM +12%

Next 12 Mo.

Consensus

2Q:09–

3Q:14

20


Corporate Fundamentals Remain Strong


As of August 31, 2014



*Net debt/equity is total debt less cash and cash equivalents divided by total equity capitalization. Return on equity and free-cash-flow yield are based on data from the

AllianceBernstein US large-cap universe, capitalization weighted, excluding financials. Average net profit margins were 6.3% since 1952, through 2Q14.

Source: Bloomberg, CRSP, Deutsche Bank, Empirical Research Partners, MSCI, S&P Dow Jones and AllianceBernstein

Earnings and Balance Sheet Quality Are Higher Today

Cash Levels Are High and Debt Remains Low

0

3

6

9

12

15

0

40

80

120

160

200

82 88 94 00 06 12

Pe

rcen

t

Pe

rcen

t

Cash/Assets

Mar 24,

2000

Oct 31,

2007

Aug 31,

2014

Cash Flow per Share $87 $75 $184

Net Debt/Equity 171% 156% 41%

Return on Equity 20% 22% 22%

Free-Cash-Flow Yield 1.6% 3.5% 3.4%

Net Profit Margins 6.7% 7.6% 9.2%

Price/Forward Earnings 20.4x 15.6x 16.5x Net Debt/Shareholders’ Equity

(Left Scale)

S&P 500 Index S&P 500 Index*

21


Policy Concerns May Be Overstated


Left display as of September 16, 2014; right display as of June 30, 2014

An investor cannot invest directly in an index and its performance does not reflect the performance of any AllianceBernstein portfolio. An unmanaged index does not reflect fees

and expenses associated with the active management of a portfolio.

*Average returns for the Empirical US Large-Cap universe, equal weighted six months before and one year after the initial increase in the Fed Fund Rate, based on 20 episodes.

**Global sovereign bonds are represented by global developed sovereign seven-year constant-maturity nominal bonds; global stocks by a universe similar to MSCI World; both

are reported in and hedged into US dollars.

Source: Empirical Research Partners, MSCI, S&P Dow Jones, US Federal Reserve Board and AllianceBernstein

Large-Cap Stocks* Have Fared Well in Rate-Hike Cycles

Global Sov. Bonds Equity RiskPremium

Global Stocks

1.9

5.0 6.9

Equity Risk Premium Is Still Attractive

11.7

2.1 1.9

5.8

6 MonthsPrior

3 MonthsAfter

Next3 Months

Next6 Months

Year After Increase

Average Returns Before and After Fed Funds Initial

Rate Increase 1952-2014

Median Annualized Growth Rates**

10-Year Outlook (Percent)

22


Is a US Equity-Market Correction Imminent?

S&P 500 Market Peaks*

Higher

Inflation

Fed

Rate

Hikes

Rise in

Long-

Term

Yields

ISM**

Manufacturing

Survey

Decline

Declining

Sentiment

Market

Valuations

Rise in

Global

Policy

Rates

Higher

Volatility

Nifty 50 CHEAP

1980s Inflation CHEAP

Late ‘80s Financial

Crisis EXPENSIVE

Tech & Telecom EXPENSIVE

Global Financial Crisis CHEAP

Today ○ EXPENSIVE



*Nifty 50: December 31, 1976, 1980s Inflation: February 13, 1980; Late ‘80s Financial Crisis: August 25, 1987; Tech & Telecom: September 1, 2000; Global Financial Crisis:

October 9, 2007

**Institute for Supply Management (ISM)

Source: Cornerstone Macro and AllianceBernstein

23


Guy Bruten Senior Economist—Asia Pacific, AllianceBernstein

Guy Bruten

Senior Economist—Asia Pacific, AllianceBernstein

Guy Bruten joined AllianceBernstein in 2004 and is a member

of the firm’s Global Economic Research team. He is

responsible for developing outlooks for the Japanese,

Australian and New Zealand economies, and for incorporating

those outlooks into forecasts for interest rates and currencies.

These fundamental forecasts are a key input into the

AllianceBernstein Fixed Income investment process. Prior to

joining the firm, Bruten spent four years as Chief Economist

for Macquarie Bank’s Funds Management Group, and five

years as a Senior Economist and Interest-Rate Strategist at

SBC Warburg in Sydney and London. Bruten started his

career at the Commonwealth Department of the Treasury in

Canberra. He holds a Master’s Degree in Economics from the

Australian National University and a B.Ec with Honours from

the University of Adelaide.

Location: Melbourne

24


Anthony Chan Senior Economist—Asia, AllianceBernstein

25

Anthony Chan

Senior Economist—Asia, AllianceBernstein

Anthony Chan is a Global Economic Research Analyst with

primary responsibility for macroeconomic forecasts and

sovereign/interest-rate strategy for the Asian fixed-income

markets. Before joining the firm in 1999, Chan was the chief

group economist (Asia) for HSBC Economics and Investment

Strategy, chief regional economist of MeesPierson Securities

(Asia), and senior China/Hong Kong economist of the

Economist Intelligence Unit. He holds a BSc (with honours) in

applied economics from the University of East London and an

MSc in economic forecasting from the University of Leeds. He

was appointed by the Hong Kong Special Administrative

Region government to serve as an advisor to the Central

Policy Unit from 1998 to 2000.

Location: Hong Kong


Index Definitions

MSCI World Index: A market capitalization–weighted index that measures the performance of stock markets in 24 countries. (Represents World equities)

S&P 500 Index: Includes a representative sample of 500 leading companies in leading industries of the US economy. (Represents US equities)

MSCI Europe Index: A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in

Europe. It consists of 15 developed market country indices. (Represents European equities)

Topix: A free-float adjusted market capitalization-weighted index that is calculated based on all the domestic Japanese common stocks listed on the Tokyo Stock

Exchange (TSE) First Section. (Represents Japanese equities)

S&P/ASX 300 Index: A float-adjusted and includes up to 300 of Australia’s largest securities by float-adjusted market capitalization. (Represents Australian equities)

MSCI Emerging Markets Index: A free float–adjusted, market capitalization–weighted index designed to measure equity-market performance in the global emerging markets.

It consists of 21 emerging-market country indices. (Represents Emerging Markets equities)

Barclays Global High Yield Index: Provides a broad-based measure of the global high-yield fixed-income markets. It represents the union of the US High Yield, Pan-

European High Yield, US Emerging Markets High Yield, CMBS High Yield and Pan-European Emerging Markets High Yield Indices. (Represents Global High Yield)

Barclays EM USD Aggregate Index: A flagship hard-currency emerging-market-debt benchmark that includes USD-denominated debt from sovereign, quasi-sovereign and

corporate EM issuers. The index is broad based in its coverage by sector and by country, and reflects the evolution of EM benchmarking from traditional sovereign bond indices

to aggregate-style benchmarks that are more representative of the EM investment choice set. (Represents Emerging-Market Debt)

Barclays Global Aggregate–Corporate Bond Index: Tracks the performance of investment-grade corporate bonds publicly issued in the global market found in the Global

Aggregate. (Represents Global Corporates)

Barclays US Treasury Index: Includes fixed-rate, local-currency sovereign debt that makes up the US Treasury sector of the Global Aggregate Index. (Represents US

Government Bonds)

Barclays Global Treasury: Japan Bond Index: Includes fixed-rate, local-currency sovereign debt that makes up the Japanese Treasury sector of the Global Aggregate Index.

(Represents Japan Government Bonds)

Barclays Global Treasury: Euro Bond Index: Includes fixed-rate, local-currency sovereign debt that makes up the Euro Area Treasury sector of the Global Aggregate Index.

(Represents Euro-Area Government Bonds)

UBS Composite Bond Index: measure performance of Australian government, semi-government, and investment-grade corporate debt. It is a composite of the UBS

Government Bond Index and the UBS Non-Government Bond Index. (Represents Australian Government Bonds)

Dow Jones-UBS Commodities Index Total Return: Consists of exchange-traded futures on 19 physical commodities that are weighted to account for economic significance

and market liquidity. (Represents Commodities)

Barclays US Treasury Inflation-Protected Securities (TIPS) Index: Consists of inflation-protected securities issued by the US Treasury. (Represents TIPS)

FTSE EPRA/NAREIT Global Real Estate Index: Designed to represent general trends in eligible real estate equities worldwide. (Represents Global REITs)

Following are definitions of the indices referred to in this presentation. It is important to recognize that all indices are unmanaged

and do not reflect fees and expenses associated with the active management of a mutual fund portfolio. Investors cannot invest

directly in an index, and its performance does not reflect the performance of any AllianceBernstein fund.

26


A Word About Risk

27

The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of

the date of this publication. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data.

There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not

guarantee future results. The views expressed here may change at any time after the date of this publication. This document is for

informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal

or accounting advice. It does not take an investor's personal investment objectives or financial situation into account; investors

should discuss their individual circumstances with appropriate professionals before making any decisions. This information should

not be construed as sales or marketing material or an offer of solicitation for the purchase or sale of any financial instrument,

product or service sponsored by AllianceBernstein or its affiliates.

Important Risk Information Related to Investing in Emerging Markets and Foreign Currencies

Investing in emerging-market debt poses risks, including those generally associated with fixed-income investments. Fixed-income

securities may lose value due to market fluctuations or changes in interest rates. Longer-maturity bonds are more vulnerable to

rising interest rates. A bond issuer’s credit rating may be lowered due to deteriorating financial condition, which may result in

losses and potentially default or failure to meet payment obligations. The default probability is higher in bonds with lower, non-

investment-grade ratings (commonly known as “junk bonds”).

There are other potential risks when investing in emerging-market debt. Non-US securities may be more volatile because of the

associated political, regulatory, market and economic uncertainties; these risks can be magnified in emerging-market securities.

Emerging-market bonds may also be exposed to fluctuating currency values. If a bond’s currency weakens against the US dollar,

this can negatively affect its value when translated back into US-dollar terms.

Bond Ratings Definition

A measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition, and not based on the f inancial

condition of the fund itself. AAA is highest (best) and D is lowest (worst). Ratings are subject to change. Investment-grade

securities are those rated BBB and above. If applicable, the Pre-Refunded category includes bonds which are secured by US

government securities and therefore are deemed high-quality investment grade by the advisor.


Disclosures and Important Information

Disclosure on Security Examples

References to specific securities are presented to illustrate the application of our investment philosophy only and are not to be

considered recommendations by AllianceBernstein. The specific securities identified and described in this presentation do not

represent all of the securities purchased, sold or recommended for the Fund, and it should not be assumed that investments in the

securities identified were or will be profitable. Upon request, we will furnish a listing of all investments made during the prior one-

year period.

Past performance is not a guide to future performance.

Additional Information

The value of investments and the income from them can fall as well as rise and you may not get back the original amount invested.

The value of securities denominated in a currency other than the Fund’s base currency (USD) will be subject to exchange-rate

fluctuations.

The views and opinions expressed in this presentation are based on AllianceBernstein’s internal forecasts and should not be relied

upon as an indication of future market performance or any guarantee of return from an investment in the Fund or any

AllianceBernstein services.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI

data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or

financial products. This report is not approved, reviewed or produced by MSCI.

28


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Division: Global

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