Understanding Sales Charges & Expenses

The information below will help you understand mutual fund expenses and assess the costs associated with your AB investments. It also explains how you can reduce or eliminate sales charges for Class A, B and C mutual fund shares.

For more details, read your Fund’s Prospectus, Statement of Additional Information or speak with your financial advisor.

UNDERSTANDING SALES CHARGES

CLASS A SHARES

You can purchase Class A shares at their public offering price (or cost), which is NAV plus an initial sales charge of up to 4.25% of the offering price. The Funds may sell their Class A shares at NAV without an initial sales charge to some categories of investors, which are detailed in each Fund's prospectus.

Any applicable sales charge will be deducted directly from your investment. The initial sales charge you pay each time you buy Class A shares differs depending on the amount you invest, and may be reduced or eliminated for larger purchases, as indicated below.

QUANTITY DISCOUNTS

Shareholders investing more than $100,000 in Class A shares of a Fund may receive a reduced sales charge as, outlined in the chart below. Front-end sales charges are eliminated completely for purchases of $1 million for equity and taxable fixed income funds, and for purchases of over $500,000 for municipal fixed-income funds, although a 1% one-year contingent deferred sales charge(CDSC) may apply.

Class A Quantity Discounts for Equity and Taxable Fixed-Income Funds
Amount of PurchaseSales Charges as a percent of Offering Price
Less than $100,0004.25%
$100,000 but less than $250,0003.25%
$250,000 but less than $500,0002.25%
$500,000 but less than $1 million1.75%
$1 million and above0.00*
Class A Quantity Discounts for Municipal Fixed-Income Funds
Amount of PurchaseSales Charges as a percent of Offering Price
Less than $100,0003.00%
$100,000 but less than $250,0002.00%
$250,000 but less than $500,0001.00%
$500,000 and above0.00*

*Class A shares redeemed within one year are subject to a contingent deferred sales charge (”CDSC”) equal to 1% of the lesser of the initial cost of the shares being redeemed or their net asset value at the time of redemption. No CDSC is assessed on increases in net asset value above the initial purchase price. The CDSC may be waived on certain redemptions as described under “Waiver of Class C CDSC”, below.

COMBINED PURCHASE PRIVILEGE

In determining whether a Quantity Discount applies, AB mutual funds take into account the amount of a shareholder’s existing investments in the Fund, as well as investments by the investor’s spouse or children who are under the age of 21. AB mutual funds also take into account, amounts invested by a trustee or other fiduciary for the benefit of these individuals, even if more than one beneficiary is involved, as well as the employee benefit plans for these individuals.

LETTER OF INTENT

A shareholder need 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 shareholder to express the intention, in writing, to invest at least $100,000 in Class A shares of that Fund or any AB mutual fund within 13 months. The Sales Charge Fund will then apply the Quantity Discount to each of the shareholder’s purchases of Class A shares that would apply to the total amount stated in the Letter of Intent. In the event an existing shareholder chooses to initiate a Letter of Intent, the AB Mutual Funds will use the higher of the cost or current NAV of the shareholder’s existing investments and of those accounts with which investments are combined via the Combined Purchase Privilege toward the fulfillment of the Letter of Intent. For example, if the combined cost of purchases totaled $80,000 and the current NAV of all applicable accounts is $85,000 at the time a $100,000 Letter of Intent is initiated, the subsequent investment of an additional $15,000 would fulfill the Letter of Intent. If a shareholder 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 shareholder’s account at their then current NAV. Shareholders qualifying for a Combined Purchase Privilege may purchase shares under a single Letter of Intent.

CLASS B AND C

Shareholders purchasing Class B or C shares of an AB Mutual Fund should be aware that CDSCs are not assessed on redemptions of either Class B or Class C shares which were purchased through the reinvestment of dividends or capital gains distributions. In addition, CDSCs are not assessed on any increase in the net asset value of shares above the initial purchase price. CDSCs may also be waived in certain circumstances as described below. Please consult the Fund’s Statement of Additional information for more information.

SYSTEMATIC WITHDRAWAL PLAN

Under a Systematic Withdrawal Plan, up to 1% monthly, 2% bi-monthly or 3% quarterly of the value at the time of redemption of the 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 these limits. Remaining Class B shares that are held the longest will be redeemed next. Redemption of Class B shares in excess of these limits will be subject to any otherwise applicable CDSC. With respect to Class C shares, shares held the longest will be redeemed first and will count toward these limits. Redemptions in excess of these limits will be subject to any otherwise applicable CDSC.

DIVIDEND DIRECTION PLAN

Shareholders may direct income dividends and/or capital gains on any class of shares of a Fund into the same class of another AB mutual fund without payment of any sales charges or CDSCs.

REINSTATEMENT PRIVILEGE

A shareholder who has caused any or all of his or her Class B shares of a Fund to be redeemed may reinvest all or any portion of the redemption proceeds in Class A shares of the same Fund at NAV without any sales charge, provided that such reinvestment is made within 120 calendar days after the redemption date, and a CDSC has been paid and the Principal Underwriter has approved, at its discretion, the reinvestment of such shares.

WAIVER OF CLASS B CDSC

The CDSC on Class B shares is waived on redemptions in the following circumstances:

  1. Following the death or disability, as defined in the Internal Revenue Code of 1986, as amended (the "Code"), of a shareholder;
  2. To the extent that the redemption represents a minimum required distribution from an individual retirement account or other retirement plan to a shareholder who has attained the age of 70 1/2;
  3. When shares are purchased by present or former Directors or Trustees 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;
  4. Pursuant to, and in accordance with, a systematic withdrawal plan;
  5. When shares are sold through programs offered by financial intermediaries and approved by AB, where such programs offer only shares which are not subject to a contingent deferred sales charge, where the financial intermediary establishes a single omnibus account for each Fund, and where no advance commission is paid to any financial intermediary in connection with the purchase of shares; or
  6. 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.

WAIVER OF CLASS C CDSC

The CDSC on Class C shares is waived on redemptions in the following circumstances:

  1. Following the death or disability, as defined in the Internal Revenue Code of 1986, as amended (the "Code"), of a shareholder;
  2. To the extent that the redemption represents a minimum required distribution from an individual retirement account or other retirement plan to a shareholder who has attained the age of 70 1/2;
  3. When shares are purchased by present or former Directors or Trustees 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;
  4. Pursuant to, and in accordance with, a systematic withdrawal plan;
  5. When shares are sold through programs offered by financial intermediaries and approved by AB, where such programs offer only shares which are not subject to a contingent deferred sales charge, where the financial intermediary establishes a single omnibus account for each Fund, and where no advance commission is paid to any financial intermediary in connection with the purchase of shares; or
  6. 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.

UNDERSTANDING MUTUAL FUND EXPENSES

WHAT ARE FUND EXPENSES?

  • Expenses are the normal costs of operating a mutual fund.
  • Expenses include all of the normal costs of running a mutual fund (payment to managers, maintaining phone lines, legal and accounting costs, mailing prospectuses etc).
  • Expenses are reflected in the fund’s price and are not charged to your individual account directly.
  • A fund’s return is always stated after expenses.
  • Expenses can vary by share class.
  • Funds that focus their investments on a particular industry sector generally have higher expense ratios than general equity funds, which, in turn, generally have higher expense ratios than bond funds. International funds generally have higher expense ratios than comparable domestic funds.
  • Fees and expenses fluctuate over time and may be higher or lower than estimates shown.

ASSESSING FUND EXPENSES?

To help you assess the costs associated with your AB investments, we include a summary of fund expenses on your quarterly statements. The statement includes two sections:

  • Current Expense Summary Section
  • Hypothetical Expense Summary Section

CURRENT EXPENSE SUMMARY SECTION

This section lists each of your fund names, fund numbers, account numbers, the annual expense ratio for each fund, quarterly fees and the ending value of each fund you own as of the end of the quarter.

CURRENT EXPENSE SUMMARY
Fund NameFund/Account NumberAnnual Expense RatioYour Quarterly FeesEnding Value
AB SAMPLE FUND CLASS A5555555555551.03%$64.38$25,000



The AB Sample Fund Class A (noted above) is shown as a hypothetical example of applied expenses to illustrate your Ending Value in the Class A Fund, after factoring in the appropriate rate of return (net of expenses) since the last statement.

Please note that the Annual Expense Ratio for the fund is 1.03%.

In reporting the figure in the 'Your Quarterly Fee' column, the Annual Expense Ratio is divided by 4 and multiplied by the 'Ending Valu'.

In this case, 1.03% (.0103) is divided by 4 = .002575 to determine the applicable Quarterly Rate.

The $25,000 (Ending Value) is then multiplied by .002575 (Quarterly Rate) which= $64.38 (Your Quarterly Fees).

HYPOTHETICAL EXPENSE SUMMARY SECTION

This section details a hypothetical investment, its hypothetical returns and the hypothetical investment results after expenses.

The following chart illustrates the estimated Fees and Expenses for AB Sample Fund Class A Shares

HYPOTHETICAL EXPENSE SUMMARY
YEARHypothetical InvestmentHypothetical Performance EarningsInvestment After ReturnsAnnual Expense RatioHypothetical ExpensesHypothetical Ending InvestmenT
1$10,000.00$478.75$10,053.751.03%$528.55$9,950.20
2$9,950.20$497.51$10,447.711.03%$107.61$10,340.09
3$10,340.09$517.00$10,857.101.03%$111.83$10,745.27
4$10,745.27$537.26$11,282.541.03%$116.21$11,166.32
5$11,166.32$558.32$11,724.641.03%$120.76$11,603.88
6$11,603.88$580.19$12,184.071.03%$125.50$12,058.58
7$12,058.58$602.93$12,661.501.03%$130.41$12,531.09
8$12,531.09$626.55$13,157.651.03%$135.52$13,022.12
9$13,022.12$651.11$13,673.231.03%$140.83$13,532.39
10$13,532.39$676.62$14,209.011.03%$146.35$14,062.66
TOTAL$5,726.25 $1,663.59



Mutual fund fees and expenses may fluctuate over time and actual expenses may be higher or lower than the estimates shown. You should carefully consider the investment objectives and policies, sales charges, expenses, risks and other matters of importance before investing in any AB mutual fund. For a free copy of any Fund’s prospectus, which contains this and other information, visit our literature page or call AB at (800) 227-4618 or your financial advisor. Please read the prospectus carefully before you invest.

FINRA'S FUND ANALYZER

Information concerning the fees and  expenses  incurred  by  the mutual funds in which you have invested can be calculated with FINRA's Fund Analyzer (https://tools.finra.org/fund_analyzer/).

This mutual fund fee calculator will enable an investor to calculate:

  • The dollar amount of the actual fees and costs charged to you based upon your most recent quarterly closing balance, and
  • The dollar amount of fees and costs that would be charged on a hypothetical investment of $10,000 held for the next 10 years and the impact of such fees and costs on fund returns for each year and cumulatively, assuming a 5% return for each year and the fund's current Net Management Fee rates.