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 Name||Fund/Account Number||Annual Expense Ratio||Your Quarterly Fees||Ending Value
|AB SAMPLE FUND CLASS A||555555555555||1.03%||$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
|YEAR||Hypothetical Investment||Hypothetical Performance Earnings||Investment After Returns||Annual Expense Ratio||Hypothetical Expenses||Hypothetical Ending InvestmenT
|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.