This is filed pursuant to Rule 497(c).

AB Cap Fund, Inc.
File No. 002-29901

AB Core Opportunities Fund, Inc.
File No. 333-90261

AB Equity Income Fund, Inc.
File No. 033-66630

AB Global Real Estate Investment Fund, Inc.
File No. 333-08153

AB Global Risk Allocation Fund, Inc.
File No. 002-10988

AB Growth and Income Fund, Inc.
File No. 002-11023

AB Trust
File No. 333-51938






[A/B]
LOGO

(Shares Offered-Exchange Ticker Symbol)

>AB Value Fund
   (Class A-ABVAX; Class B-ABVBX; Class C-ABVCX;
      Class R-ABVRX; Class K-ABVKX; Class I-ABVIX;
      Advisor Class-ABVYX)

>AB Discovery Value Fund
   (Class A-ABASX; Class B-ABBSX; Class C-ABCSX;
      Class R-ABSRX; Class K-ABSKX; Class I-ABSIX;
      Advisor Class-ABYSX; Class Z-ABSZX)

>AB Growth and Income Fund
   (Class A-CABDX; Class B-CBBDX; Class C-CBBCX;
      Class R-CBBRX; Class K-CBBKX; Class I-CBBIX;
      Advisor Class-CBBYX; Class Z-CBBZX)

>AB Equity Income Fund
   (Class A-AUIAX; Class B-AUIBX; Class C-AUICX;
      Class R-AUIRX; Class K-AUIKX;
      Class I-AUIIX; Advisor Class-AUIYX;
      Class Z-AUIZX)

>AB Global Real Estate Investment Fund
   (Class A-AREAX; Class B-AREBX; Class C-ARECX;
      Class R-ARRRX; Class K-ARRKX; Class I-AEEIX;
      Advisor Class-ARSYX)

>AB International Value Fund
   (Class A-ABIAX; Class B-ABIBX; Class C-ABICX;
      Class R-AIVRX; Class K-AIVKX;
      Class I-AIVIX; Advisor Class-ABIYX)

>AB Core Opportunities Fund
   (Class A-ADGAX; Class B-ADGBX; Class C-ADGCX;
      Class R-ADGRX; Class K-ADGKX; Class I-ADGIX;
      Advisor Class-ADGYX; Class Z-ADGZX)

>AB Global Risk Allocation Fund
   (Class A-CABNX; Class B-CABBX;
      Class C-CBACX; Class R-CBSRX; Class K-CBSKX;
      Class I-CABIX; Advisor Class-CBSYX)

>AB Small Cap Value Portfolio
   (Class A-SCAVX; Class C-SCCVX; Advisor Class-SCYVX)

>AB All Market Income Portfolio
   (Class A-MRKAX; Class C-MRKCX; Advisor Class-MRKYX)






--------------------------------------------------------------------------------
                      STATEMENT OF ADDITIONAL INFORMATION
                               February 29, 2016
--------------------------------------------------------------------------------

                 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

      This Statement of Additional Information ("SAI") is not a prospectus but
supplements and should be read in conjunction with the current prospectus dated
February 29, 2016 (the "Prospectus") for AB Value Fund ("Value Fund"), AB
Discovery Value Fund ("Discovery Value") and AB International Value Fund
("International Value") of the AB Trust (the "ABT Funds"), AB Small Cap Value
Portfolio ("Small Cap Value") and AB All Market Income Portfolio ("All Market
Income") of the AB Cap Fund, Inc. (the "ACF Funds"), the AB Growth and Income
Fund ("Growth and Income"), the AB Core Opportunities Fund ("Core
Opportunities"), the AB Global Risk Allocation Fund ("Global Risk Allocation"),
the AB Equity Income Fund ("Equity Income") and the AB Global Real Estate
Investment Fund ("Global Real Estate") (the "Companies") (the Companies,
together with the ABT Funds and the ACF Funds, the "Funds") that offers Class A,
Class C and Advisor Class shares for Small Cap Value and All Market Income,
Class A, Class B, Class C, Class R, Class K Class I and Advisor Class shares for
Value Fund, International Value, Global Risk Allocation and Global Real Estate,
and Class A, Class B, Class C, Class R, Class K, Class I, Advisor Class and
Class Z shares for Discovery Value, Growth and Income, Equity Income and Core
Opportunities. Financial statements for Growth and Income for the year ended
October 31, 2015 and financial statements for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income,
Global Real Estate, Small Cap Value and All Market Income for the year or period
ended November 30, 2015, are included in the respective annual reports to
shareholders and are incorporated into this SAI by reference. Copies of the
Prospectus and each Fund's annual report may be obtained by contacting
AllianceBernstein Investor Services, Inc. ("ABIS") at the address or the "For
Literature" telephone number shown above or on the Internet at www.ABglobal.com.



                               TABLE OF CONTENTS
                               -----------------

                                                                            Page
                                                                            ----

INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS..............................4
INVESTMENT RESTRICTIONS.......................................................49
MANAGEMENT OF THE FUNDS.......................................................51
EXPENSES OF THE FUNDS.........................................................92
PURCHASE OF SHARES...........................................................104
REDEMPTION AND REPURCHASE OF SHARES..........................................130
SHAREHOLDER SERVICES.........................................................133
NET ASSET VALUE..............................................................135
DIVIDENDS, DISTRIBUTIONS AND TAXES...........................................139
PORTFOLIO TRANSACTIONS.......................................................148
GENERAL INFORMATION..........................................................155
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT
   REGISTERED PUBLIC ACCOUNTING FIRM.........................................191
APPENDIX A:  PROXY VOTING POLICY STATEMENT...................................A-1

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




--------------------------------------------------------------------------------

               INFORMATION ABOUT THE FUNDS AND THEIR INVESTMENTS

--------------------------------------------------------------------------------

Introduction to the Funds
-------------------------

      The Companies are each an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act").

      AB Trust (the "Trust") and AB Cap Fund, Inc. ("AB Cap Fund") are open-end
investment companies whose shares are offered in separate series referred to as
portfolios. The ABT Funds and ACF Funds are portfolios of the Trust and AB Cap
Fund, respectively, which are described in this SAI. Each portfolio is a
separate pool of assets constituting, in effect, a separate open-end management
investment company with its own investment objective and policies. A shareholder
in a portfolio will be entitled to his or her pro-rata share of all dividends
and distributions arising from that portfolio's assets and, upon redeeming
shares of that portfolio the shareholder will receive the then current net asset
value ("NAV") of the applicable class of shares of that portfolio.

      Except as noted, the Funds' investment policies and practices described
below are not "fundamental policies" within the meaning of the 1940 Act, and
may, therefore, be changed by the Board of Directors of each of the Companies
(the "Companies' Boards"), the Board of Directors of AB Cap Fund (the "AB Cap
Fund Board") or the Board of Trustees of the Trust (the "Trust Board" and,
together with the Companies' Boards and the AB Cap Fund Board, the "Boards")
without shareholder approval. However, no Fund will change its investment
objective without at least 60 days' prior written notice to shareholders. There
is no guarantee that a Fund will achieve its investment objective. Whenever any
investment policy or restriction states a percentage of a Fund's assets that 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 a 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.

Additional Investment Policies and Practices
--------------------------------------------

      The following information about the Funds' investment policies and
practices supplements the information set forth in the Prospectus.

      Global Risk Allocation may pursue its investment objective by investing in
AllianceBernstein Global Risk Allocation Fund (Cayman) Ltd., a wholly-owned
subsidiary of Global Risk Allocation organized under the laws of the Cayman
Islands (the "Subsidiary"). The Subsidiary is advised by AllianceBernstein L.P.,
the Fund's Adviser (the "Adviser"), and has the same investment objective and
will generally be subject to the same fundamental, non-fundamental and certain
other investment restrictions as Global Risk Allocation; however, the Subsidiary
(unlike Global Risk Allocation), may invest without limitation in
commodity-linked swap agreements and other commodity-linked derivative
instruments. Global Risk Allocation and the Subsidiary may test for compliance
with certain investment restrictions on a consolidated basis, except that with
respect to its investments in certain securities that may involve leverage, the
Subsidiary will comply with asset segregation or "earmarking" requirements to
the same extent as Global Risk Allocation. By investing in the Subsidiary,
Global Risk Allocation is indirectly exposed to the risks associated with the
Subsidiary's investments. The derivatives and other investments held by the
Subsidiary are generally similar to those held by Global Risk Allocation and are
subject to the same risks that apply to similar investments if held directly by
Global Risk Allocation. See "Investments in the Wholly-Owned Subsidiary" below
for a more detailed discussion of the Subsidiary.

Convertible Securities
----------------------

      Convertible securities include bonds, debentures, corporate notes and
preferred stocks that are convertible at a stated exchange rate into shares of
the underlying common stock. Prior to their conversion, convertible securities
have the same general characteristics as non-convertible debt securities, which
provide a stable stream of income with generally higher yields than those of
equity securities of the same or similar issuers. As with debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. While
convertible securities generally offer lower interest or dividend yields than
non-convertible debt securities of similar quality, they do enable the investor
to benefit from increases in the market price of the underlying common stock.

      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
-------------------

      A Fund may invest in depositary receipts. American Depositary Receipts
("ADRs") are depositary receipts typically issued by a U.S. bank or trust
company that evidence ownership of underlying securities issued by a foreign
corporation. European Depositary Receipts ("EDRs"), Global Depositary Receipts
("GDRs") or 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 non-U.S. company. Transactions in these securities may not
necessarily be settled in the same currency as transactions in the securities
into which they represent. In addition, the issuers of the securities of
unsponsored depositary receipts are not obligated to disclose material
information in the United States. 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 those of Europe and
Asia.

Derivatives
-----------

      A Fund may, but is not required to, use derivatives for hedging or other
risk management purposes or as part of its investment strategies. Derivatives
are financial contracts whose value depend 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.

      There are four principal types of derivatives--options, futures
contracts, forwards and swaps. These principal types of derivative instruments,
as well as the methods in which they may be used by a Fund, are described below.
Derivatives include listed and cleared transactions, where the Fund's derivative
trade counterparty is an exchange or clearinghouse, and non-cleared bilateral
"over-the-counter" ("OTC") transactions where the Fund's derivative trade
counterparty is a financial institution. Exchange-traded or cleared derivatives
transactions tend to be more liquid and subject to less counterparty credit risk
than those that are privately negotiated. The Funds 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.

      Forward Contracts. A forward contract, which may be standardized and
exchange-traded or customized and privately negotiated, is an agreement for one
party to buy, and the other party to sell, a specific quantity of an underlying
security, currency, commodity or other asset for an agreed-upon price at a
future date. A forward contract generally is settled by physical delivery of the
security, 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.

      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. 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 canceled 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.

      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 (a "call") or sell (a "put") 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. 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).

      Swaps. A swap is an 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). Most swaps are entered into on a net basis (i.e., the two
payment streams are netted out, with a Fund receiving or paying, as the case may
be, only the net amount of the two payments). Generally, the notional principal
amount is used solely to calculate the payment streams but is not exchanged.
Certain standardized swaps, including certain interest rate swaps and credit
default swaps, are (or soon will be) subject to mandatory central clearing.
Cleared swaps are transacted through futures commission merchants ("FCMs") that
are members of central clearinghouses with the clearinghouse serving as central
counterparty, similar to transactions in futures contracts. Funds post initial
and variation margin to support their obligations under cleared swaps by making
payments to their clearing member FCMs. Central clearing is expected to reduce
counterparty credit risks and increase liquidity, but central clearing does not
make swap transactions risk free. Centralized clearing will be required for
additional categories of swaps on a phased-in basis based on Commodity Futures
Trading Commission ("CFTC") approval of contracts for central clearing.
Bilateral swap agreements are two-party contracts entered into primarily by
institutional investors and are not cleared through a third party.

      Risks of Derivatives and Other Regulatory Issues. 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.

      -- 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 a
      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 a 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 a 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 derivatives traded on an exchange or through
      a clearinghouse is generally less than for uncleared OTC derivatives,
      since the exchange or clearinghouse, which is the issuer or counterparty
      to each 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 uncleared
      OTC derivatives, there is no similar clearing agency guarantee. Therefore,
      a Fund considers the creditworthiness of each counterparty to an uncleared
      OTC derivative in evaluating potential credit risk.

      -- Counterparty Risk. The value of an OTC derivative will depend on the
      ability and willingness of a Fund's counterparty to perform its
      obligations under the transaction. If the counterparty defaults, a Fund
      will have contractual remedies but may choose not to enforce them to avoid
      the cost and unpredictability of legal proceedings. In addition, if a
      counterparty fails to meet its contractual obligations, a Fund could miss
      investment opportunities or otherwise be required to retain investments it
      would prefer to sell, resulting in losses for the Fund. Participants in
      OTC derivatives markets generally are not subject to the same level of
      credit evaluation and regulatory oversight as are exchanges or
      clearinghouses. As a result, OTC derivatives generally expose a Fund to
      greater counterparty risk than derivatives traded on an exchange or
      through a clearinghouse.

      New regulations affecting derivatives transactions now, or will soon,
require certain standardized derivatives, including many types of swaps, to be
subject to mandatory central clearing. Under these new requirements, a central
clearing organization will be substituted as the counterparty to each side of
the derivatives transaction. Each party to derivatives transactions will be
required to maintain its positions with a clearing organization through one or
more clearing brokers. Central clearing is expected to reduce, but not
eliminate, counterparty risk. A Fund will be subject to the risk that its
clearing member or clearing organization will itself be unable to perform its
obligations.

      -- 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.

      -- Regulatory Risk. The U.S. Government is in the process of adopting and
      implementing additional regulations governing derivatives markets,
      including clearing as discussed above, margin, reporting and registration
      requirements. While the full extent and cost of these regulations is
      currently unclear, these regulations could, among other things, restrict a
      Fund's ability to engage in derivatives transactions and/or increase the
      cost of such derivatives transactions (through increased margin or capital
      requirements). In addition, Congress, various exchanges and regulatory and
      self-regulatory authorities have undertaken reviews of options and futures
      trading in light of market volatility. Among the actions that have been
      taken or proposed to be taken are new limits and reporting requirements
      for speculative positions new or more stringent daily price fluctuation
      limits for futures and options transactions, and increased margin
      requirements for various types of futures transactions. These regulations
      and actions may adversely affect the instruments in which a Fund invests
      and its ability to execute its investment strategy.

      -- 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 a 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, a 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.

      Other. A Fund may purchase and sell derivative instruments only to the
extent that such activities are consistent with the requirements of the
Commodity Exchange Act ("CEA") and the rules adopted by the CFTC thereunder.
Under CFTC rules, a registered investment company that conducts more than a
certain amount of trading in futures contracts, commodity options, certain swaps
and other commodity interests is a commodity pool and its adviser must register
as a commodity pool operator ("CPO"). Under such rules, registered investment
companies that are commodity pools are subject to additional registration,
recordkeeping, reporting and disclosure requirements. The Adviser and the Funds
(including subsidiaries), except Global Risk Allocation and the Subsidiary, have
claimed an exclusion from the definition of CPO under CFTC Rule 4.5 under the
CEA with respect to the Funds, and are not currently subject to these
recordkeeping, reporting and disclosure requirements. This exclusion is not
available to Global Risk Allocation or the Subsidiary, and the Adviser has
registered as a CPO with respect to Global Risk Allocation and the Subsidiary.
This registration subjects Global Risk Allocation and the Subsidiary to certain
recordkeeping, reporting and disclosure requirements but, under rules adopted by
the CFTC, compliance with Securities and Exchange Commission ("SEC") disclosure
and filing requirements, for the most part, constitutes compliance with
comparable CFTC requirements.

Use of Options, Futures Contracts, Forwards and Swaps by a Fund
---------------------------------------------------------------

      --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. A
forward currency exchange contract may result 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.

      A Fund may, for example, 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 other currencies. A Fund may purchase
or sell forward currency exchange contracts for hedging purposes similar to
those described below in connection with its transactions in foreign currency
futures contracts. A Fund may also purchase or sell forward currency exchange
contracts for non-hedging purposes as a means of making direct investments in
foreign currencies, as described below under "Currency Transactions".

      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, a Fund may be required to forgo
all or a portion of the benefits which otherwise could have been obtained from
favorable movements in exchange rates.

      A Fund may also use forward currency exchange contracts to seek to
increase total return when the Adviser anticipates that a foreign currency will
appreciate or depreciate in value but securities denominated in that currency
are not held by the Fund and do not present attractive investment opportunities.
For example, a Fund may enter into a foreign currency exchange contract to
purchase a currency if the Adviser expects the currency to increase in value.
The Fund would recognize a gain if the market value of the currency is more than
the contract value of the currency at the time of settlement of the contract.
Similarly, a Fund may enter into a foreign currency exchange contract to sell a
currency if the Adviser expects the currency to decrease in value. The Fund
would recognize a gain if the market value of the currency is less than the
contract value of the currency at the time of settlement of the contract.

      The cost of engaging in forward currency exchange contracts varies with
such factors as the currencies involved, the length of the contract period and
the market conditions then prevailing. Since transactions in foreign currencies
are usually conducted on a principal basis, no fees or commissions are involved.

      --Options on Securities. A Fund may write and purchase call and put
options on securities. In purchasing an option on securities, a 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,
a 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 a Fund were permitted to expire without being
sold or exercised, its premium would represent a loss to the Fund.

      A 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. A Fund may write
covered options or uncovered options. A call option written by a 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 the exercise price of the call option it
has written. A put option written by a Fund is covered if the Fund holds a put
option on the underlying securities with an exercise price equal to or greater
than the exercise price of the put option it has written. Uncovered options or
"naked options" are riskier than covered options. For example, if a Fund wrote a
naked call option and the price of the underlying security increased, the Fund
would have to purchase the underlying security for delivery to the call buyer
and sustain a loss, which could be substantial, equal to the difference between
the option price and the market price of the security.

      A Fund may also 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.

      A 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.

      A Fund may also, as an example, 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 in 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.

      A Fund may purchase or write options on securities of the types in which
it is permitted to invest in privately-negotiated (i.e., OTC) transactions. By
writing a call option, a 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, a 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.

      A 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 Adviser, and the Adviser has adopted
procedures for monitoring the creditworthiness of such entities. Options
purchased or written in negotiated transactions may be illiquid and it may not
be possible for the Fund to effect a closing transaction at a time when the
Adviser believes it would be advantageous to do so.

      --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.

      A Fund may write (sell) call and put options and purchase call and put
options on securities indices. If a Fund purchases put options on securities
indices 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.

      A Fund may also write put or call options on securities indices to, among
other things, earn income. If the value of the chosen index declines below the
exercise price of the put option, the Fund has the risk of loss of the amount of
the difference between the exercise price and the closing level of the chosen
index, which it would be required to pay to the buyer of the put option and
which may not be offset by the premium it received upon sale of the put option.
Similarly, if the value of the index is higher than the exercise price of the
call option, the Fund has the risk of loss of the amount of the difference
between the exercise price and the closing level of the chosen index, which may
not be offset by the premium it received upon sale of the call option. If the
decline or increase in the value securities index is significantly below or
above the exercise price of the written option, the Fund could experience a
substantial loss.

      The purchase of call options on securities indices may be used by a 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 indices when a 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.

      --Other Option Strategies. In an effort to earn extra income, to adjust
exposure to individual securities or markets, or to protect all or a portion of
its portfolio from a decline in value, sometimes within certain ranges, a Fund
may use option strategies such as the concurrent purchase of a call or put
option, including on individual securities and stock indices, futures contracts
(including on individual securities and stock indices) or shares of
exchange-traded funds ("ETFs") at one strike price and the writing of a call or
put option on the same individual security, stock index, futures contract or ETF
at a higher strike price in the case of a call option or at a lower strike price
in the case of a put option. The maximum profit from this strategy would result
for the call options from an increase in the value of the individual security,
stock index, futures contract or ETF above the higher strike price or for the
put options the decline in the value of the individual security, stock index,
futures contract or ETF below the lower strike price. If the price of the
individual security, stock index, futures contract or ETF declines in the case
of the call option or increases in the case of the put option, the Fund has the
risk of losing the entire amount paid for the call or put options.

      --Options on Foreign Currencies. A Fund may purchase and write options on
foreign currencies for hedging and non-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, a 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, the Fund could sustain losses on transactions in foreign currency
options which would require it to forgo a portion or all of the benefits of
advantageous changes in such rates.

      A Fund may write options on foreign currencies for hedging purposes or to
increase return. For example, where a Fund anticipates a decline in the dollar
value of non-U.S. Dollar-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, a 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 forgo all or a
portion of the benefits that might otherwise have been obtained from favorable
movements in exchange rates.

      In addition to using options for the hedging purposes described above, a
Fund may also invest in options on foreign currencies for non-hedging purposes
as a means of making direct investments in foreign currencies. A Fund may use
options on currency to seek to increase total return when the Adviser
anticipates that a foreign currency will appreciate or depreciate in value but
securities denominated in that currency are not held by the Fund and do not
present attractive investment opportunities. For example, the Fund may purchase
call options in anticipation of an increase in the market value of a currency. A
Fund would ordinarily realize a gain if, during the option period, the value of
such currency exceeded the sum of the exercise price, the premium paid and
transaction costs. Otherwise, the Fund would realize no gain or a loss on the
purchase of the call option. Put options may be purchased by a Fund for the
purpose of benefiting from a decline in the value of a currency that the Fund
does not own. A Fund would normally realize a gain if, during the option period,
the value of the underlying currency decreased below the exercise price
sufficiently to more than cover the premium and transaction costs. Otherwise,
the Fund would realize no gain or loss on the purchase of the put option. For
additional information on the use of options on foreign currencies for
non-hedging purposes, see "Currency Transactions" below.

      Special Risks Associated with Options on Currencies. An exchange-traded
options position may be closed out only on an options exchange that provides a
secondary market for an option of the same series. Although a Fund will
generally purchase or sell options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option, or at any particular time. For
some options, no secondary market on an exchange may exist. In such event, it
might not be possible to effect closing transactions in particular options, with
the result that the Fund would have to exercise its options in order to realize
any profit and would incur transaction costs on the purchase or sale of the
underlying currency.

      --Futures Contracts and Options on Futures Contracts. Futures contracts
that a 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. A Fund
may, for example, purchase or sell futures contracts and options thereon to
hedge against changes in interest rates, securities (through index futures or
options) or currencies.

      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 NAV 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.

      A Fund may purchase and sell foreign currency futures contracts for
hedging or risk management 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
non-U.S. Dollar-denominated securities to be acquired, even if the value of such
securities in the currencies in which they are denominated remains constant. A
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 non-U.S. Dollar-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, a 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, a Fund could protect against a rise in the dollar cost of
non-U.S. Dollar-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.

      A 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 U.S.
Dollar.

      A Fund may also use foreign currency futures contracts and options on such
contracts for non-hedging purposes. Similar to options on currencies described
above, a Fund may use foreign currency futures contracts and options on such
contracts to seek to increase total return when the Adviser anticipates that a
foreign currency will appreciate or depreciate in value but securities
denominated in that currency are not held by the Fund and do not present
attractive investment opportunities. The risks associated with foreign currency
futures contracts and options on futures contracts are similar to those
associated with options on foreign currencies, as described above. For
additional information on the use of options on foreign currencies for
non-hedging purposes, see "Currency Transactions" below.

      Purchases or sales of stock or bond index futures contracts are used for
hedging or risk management 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 in
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.

      Options on futures contracts are options that call for the delivery of
futures contracts upon exercise. Options on futures contracts written or
purchased by a Fund will be traded on U.S. exchanges.

      The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the securities in a 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.

      A 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 in
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 that the Fund intends to purchase may be
less expensive.

      --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
restructuring. A 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. The contingent payment will be either (i) the
"par value" (full amount) of the reference obligation in which case the Fund
will receive the reference obligation in return, or (ii) an amount equal to the
difference between the par value and the current market value of the obligation.
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. 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 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. A Fund may enter into currency swaps for hedging
purposes in an attempt to protect against adverse changes in exchange rates
between the U.S. Dollar and other currencies or for non-hedging purposes as a
means of making direct investments in foreign currencies, as described below
under "Currency Transactions". Currency swaps involve the exchange by the Fund
with another party of a series of payments in specified currencies. Currency
swaps may involve the exchange of actual principal amounts of currencies by the
counterparties at the initiation and again upon termination of the transaction.
Currency swaps may be bilateral and privately negotiated, with the Fund
expecting to achieve an acceptable degree of correlation between its portfolio
investments and its currency swaps positions. The Funds will not enter into any
currency swap unless the credit quality of the unsecured senior debt or the
claims-paying ability of the counterparty thereto is rated in the highest
short-term rating category of at least one nationally recognized statistical
rating organization ("NRSRO") at the time of entering into the transaction.

      --Swaps: Interest Rate Transactions. A Fund may enter into interest rate
swap, swaption and 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 Fund anticipates
purchasing at a later date. 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 is contractually
entitled to receive.

      Interest rate swaps involve the exchange by a Fund with another party of
payments calculated by reference to specified interest rates (e.g., an exchange
of floating-rate payments for fixed-rate payments) computed based on a
contractually-based principal (or "notional") amount.

      An option on a swap agreement, also called a "swaption", is an option that
gives the buyer the right, but not the obligation, to enter into a swap on a
future date in exchange for paying a market-based "premium". A receiver swaption
gives the owner the right to receive the total return of a specified asset,
reference rate, or index. A payer swaption gives the owner the right to pay the
total return of a specified asset, reference rate, or index. Swaptions also
include options that allow an existing swap to be terminated or extended by one
of the counterparties.

      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.

      Caps and floors are less liquid than swaps. These transactions do not
involve the delivery of securities or other underlying assets or principal. A
Fund will enter into bilateral swap agreements, including interest rate swap,
swaptions, cap or floor transactions only with counterparties who have credit
ratings of at least A- (or the equivalent) from any one NRSRO or counterparties
with guarantors with debt securities having such a rating. For cleared interest
rate swaps, the Adviser will monitor the creditworthiness of each of the central
clearing counterparty, clearing broker and executing broker but there will be no
prescribed NRSRO rating requirements for these entities.

      --Variance and Correlation Swaps. A Fund may enter into variance or
correlation swaps in an attempt to hedge equity market risk or adjust exposure
to the equity markets. Variance swaps are contracts in which two parties agree
to exchange cash payments based on the difference between the stated level of
variance and the actual variance realized on an underlying asset or index.
Actual "variance" as used here is defined as the sum of the square of the
returns on the reference asset or index (which in effect is a measure of its
"volatility") over the length of the contract term. In other words, the parties
to a variance swap can be said to exchange actual volatility for a contractually
stated rate of volatility. Correlation swaps are contracts in which two parties
agree to exchange cash payments based on the differences between the stated and
the actual correlation realized on the underlying equity securities within a
given equity index. "Correlation" as used here is defined as the weighted
average of the correlations between the daily returns of each pair of securities
within a given equity index. If two assets are said to be closely correlated, it
means that their daily returns vary in similar proportions or along similar
trajectories.

      --Total Return Swaps. A Fund may enter into total return swaps in order to
take a "long" or "short" position with respect to an underlying referenced
asset. The Fund is subject to market price volatility of the referenced asset. A
total return swap involves commitments to pay interest in exchange for a market
linked return based on a notional amount. To the extent that the total return of
the security group of securities or index underlying the transaction exceeds or
falls short of the offsetting interest obligation, the Fund will receive a
payment or make a payment to the counterparty.

      --Special Risks Associated with Swaps. Risks may arise as a result of the
failure of the counterparty to a bilateral swap contract to comply with the
terms of the swap contract. The loss incurred by the failure of a counterparty
is generally limited to the net interim payment to be received by a Fund and/or
the termination value at the end of the contract. Therefore, the Fund considers
the creditworthiness of the counterparty to a bilateral swap contract. The risk
is mitigated by having a netting arrangement between the Fund and the
counterparty and by the posting of collateral by the counterparty to the Fund to
cover the Fund's exposure to the counterparty. Certain standardized swaps,
including interest rate swaps and credit default swaps, are, or soon will be,
subject to mandatory central clearing. Central clearing is expected, among other
things, to reduce counterparty credit risk, but does not eliminate it
completely.

      Additionally, risks may arise from unanticipated movements in interest
rates or in the value of the underlying securities. The Fund accrues for the
changes in value on swap contracts on a daily basis, with the net amount
recorded within unrealized appreciation/depreciation of swap contracts on the
statement of assets and liabilities. Once the interim payments are settled in
cash, the net amount is recorded as realized gain/(loss) on swaps on the
statement of operations, in addition to any realized gain/(loss) recorded upon
the termination of swap contracts. Fluctuations in the value of swap contracts
are recorded as a component of net change in unrealized
appreciation/depreciation of swap contracts on the statement of operations.

      --Synthetic Foreign Equity Securities. A Fund may invest in different
types of derivatives generally referred to as synthetic foreign equity
securities. These securities may include 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 of the warrant for a
particular price or may entitle holders to receive a cash payment relating to
the value of the underlying security or index, in each case upon exercise by the
Fund. Local access products are similar to options in that they are exercisable
by the holder for an underlying security or a cash payment based upon the value
of that security, but are generally exercisable over a longer term than typical
options. These types of instruments may be American style, which means that they
can be exercised at any time on or before their expiration date, or European
style, which means that they may be exercised only on the expiration date.

      Other types of synthetic foreign equity securities in which a Fund may
invest include covered warrants and low exercise price warrants. Covered
warrants entitle the holder to purchase from the issuer, typically a financial
institution, upon exercise, common stock of an international company or receive
a cash payment (generally in U.S. Dollars). The issuer of the covered warrant
usually owns the underlying security or has a mechanism, such as owning equity
warrants on the underlying securities, through which they can obtain the
securities. The cash payment is calculated according to a predetermined formula,
which is generally based on the difference between the value of the underlying
security on the date of exercise and the strike price. Low exercise price
warrants 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.

      A Fund's investments in synthetic foreign equity securities will be those
issued by entities deemed to be creditworthy by the Adviser, which will monitor
the creditworthiness of the issuers on an ongoing 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 OTC 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.

      A 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.

      --Eurodollar Instruments. Eurodollar instruments are essentially U.S.
Dollar-denominated futures contracts or options thereon that are linked to the
London Interbank Offered Rate and are subject to the same limitations and risks
as other futures contracts and options.

      --Currency Transactions. A Fund may invest in non-U.S. Dollar-denominated
securities on a currency hedged or un-hedged basis. The Adviser may actively
manage the Fund's currency exposures and may seek investment opportunities by
taking long or short positions in currencies through the use of currency-related
derivatives, including forward currency exchange contracts, futures contracts
and options on futures contracts, swaps and options. The Adviser may enter into
transactions for investment opportunities when it anticipates that a foreign
currency will appreciate or depreciate in value but securities denominated in
that currency are not held by the Fund and do not present attractive investment
opportunities. Such transactions may also be used when the Adviser believes that
it may be more efficient than a direct investment in a foreign
currency-denominated security. The Funds may also conduct currency exchange
contracts on a spot basis (i.e., for cash at the spot rate prevailing in the
currency exchange market for buying or selling currencies).

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 assumes the rights and risks of
ownership of the security, but the Fund does not pay for the securities until
they are received. If a Fund is fully or almost fully invested when forward
commitment purchases are outstanding, such purchases may result in a form of
leverage. Leveraging the portfolio in this manner may increase the Fund's
volatility of returns.

      The use of forward commitments enables a Fund to protect against
anticipated changes in exchange rates, interest rates and/or prices. For
instance, a 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 a 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, a 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. If a 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 NAV.

      At the time a 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 NAV.
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.

      Purchases of securities on a forward commitment or when-issued basis may
involve more risk than other types of purchases. For example, by committing to
purchase securities in the future, a Fund subjects itself to a risk of loss on
such commitments as well as on its portfolio securities. Also, a Fund may have
to sell assets which have been set aside in order to meet redemptions. In
addition, if a 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). No interest or dividends accrue to the purchaser prior to the
settlement date for securities purchased or sold under a forward commitment. In
addition, in the event the other party to the transaction files for bankruptcy,
becomes insolvent, or defaults on its obligation, a Fund may be adversely
affected.

Illiquid Securities
-------------------

      A 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 a Fund
OTC and the cover for options written by the Fund OTC, 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 may 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 ("Rule 144A Securities") to qualified
institutional buyers. To the extent permitted by applicable law, Rule 144A
Securities will not be treated as illiquid for purposes of the foregoing
restriction so long as such securities meet the liquidity guidelines established
by the Boards. Pursuant to these guidelines, the Adviser will monitor the
liquidity of a Fund's investment in Rule 144A Securities. An insufficient number
of qualified institutional buyers interested in purchasing certain restricted
securities held by a 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 oversight of the Boards, will monitor the
liquidity of restricted securities in a 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 SEC interpretation or position with respect to
such type of securities.

Investments in Exchange-Traded Funds and Other Investment Companies
-------------------------------------------------------------------

      The Funds may invest in shares of ETFs, subject to the restrictions and
limitations of the 1940 Act, or any applicable rules, exemptive orders or
regulatory guidance. ETFs are pooled investment vehicles, which may be managed
or unmanaged, that generally seek to track the performance of a specific index.
ETFs will not track their underlying indices precisely since the ETFs have
expenses and may need to hold a portion of their assets in cash, unlike the
underlying indices, and the ETFs may not invest in all of the securities in the
underlying indices in the same proportion as the indices for various reasons.
The Funds will incur transaction costs when buying and selling ETF shares, and
indirectly bear the expenses of the ETFs. In addition, the market value of an
ETF's shares, which are based on supply and demand in the market for the ETFs
shares, may differ from their NAV. Accordingly, there may be times when an ETF's
shares trade at a discount to its NAV.

      The Funds may also invest in investment companies other than ETFs, as
permitted by the 1940 Act or the rules and regulations or exemptive orders
thereunder. As with ETF investments, if the Funds acquire shares in other
investment companies, shareholders would bear, indirectly, the expenses of such
investment companies (which may include management and advisory fees), which are
in addition to the Funds' expenses. The Funds intend to invest uninvested cash
balances in an affiliated money market fund as permitted by Rule 12d1-1 under
the 1940 Act.

Investments in Pre-IPO Securities
---------------------------------

      The Funds may invest in pre-IPO securities. Pre-IPO securities, or venture
capital investments, are investments in new and early stage companies, often
funded by venture capital and referred to as "venture capital companies", whose
securities have not been offered to the public and are not publicly traded.
These investments may present significant opportunities for capital appreciation
but involve a high degree of risk that may result in significant decreases in
the value of these investments. Venture capital companies may not have
established products, experienced management or earnings histories. The Funds
may not be able to sell such investments when the portfolio managers and/or
investment personnel deem it appropriate to do so because they are not publicly
traded. As such, these investments are generally considered to be illiquid until
a company's public offering (which may never occur) and are often subject to
additional contractual restrictions on resale following any public offering that
may prevent the Fund from selling its shares of these companies for a period of
time. Market conditions, developments within a company, investor perception or
regulatory decisions may adversely affect a venture capital company and delay or
prevent a venture capital company from ultimately offering its securities to the
public.


Investments in the Wholly-Owned Subsidiary
------------------------------------------

      Investments in the Subsidiary are expected to provide Global Risk
Allocation with exposure to the commodity markets within the limitations of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
recent Internal Revenue Service (the "IRS") revenue rulings, as discussed below
under "Dividends, Distributions and Taxes". The Subsidiary is a company
organized under the laws of the Cayman Islands, and is overseen by its own board
of directors. The Fund is the sole shareholder of the Subsidiary, and it is not
currently expected that shares of the Subsidiary will be sold or offered to
other investors.

      It is expected that the Subsidiary will invest primarily in
commodity-linked derivative instruments, including swap agreements, commodity
options, futures contracts and options on futures contracts, backed by a
portfolio of inflation-indexed securities and other fixed-income securities.
Although Global Risk Allocation may enter into these commodity-linked derivative
instruments directly, the Fund will likely gain exposure to these derivative
instruments indirectly by investing in the Subsidiary. The Subsidiary will also
invest in inflation-indexed securities and other fixed-income securities, which
are intended to serve as margin or collateral for the Subsidiary's derivatives
position. To the extent that Global Risk Allocation invests in the Subsidiary,
the Fund may be subject to the risks associated with those derivative
instruments and other securities, which are discussed elsewhere in the
Prospectus and this SAI.

      While the Subsidiary may be considered similar to an investment company,
it is not registered under the 1940 Act and, unless otherwise noted in the
Prospectus and this SAI, is not subject to all of the investor protections of
the 1940 Act and other U.S. regulations. Changes in the laws of the United
States and/or the Cayman Islands could result in the inability of the Fund
and/or the Subsidiary to operate as described in the Prospectus and this SAI and
could negatively affect Global Risk Allocation and its shareholders.

Loans of Portfolio Securities
-----------------------------

      A Fund may seek to increase income by lending portfolio securities to
brokers, dealers, and financial institutions ("borrowers") to the extent
permitted under the 1940 Act or the rules or 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
the securities lending program, all securities loans will be secured continually
by cash collateral. A principal risk in lending portfolio securities is that the
borrower will fail to return the loaned securities upon termination of the loan
and that the collateral will not be sufficient to replace the loaned securities
upon the borrower's default.

      In determining whether to lend securities to a particular borrower, the
Adviser (subject to oversight by the Boards) 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 creditworthy, 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. A Fund will be
compensated for the loan from a portion of the net return from the interest
earned on the cash collateral after a rebate paid to the borrower (which may be
a negative amount - i.e., the borrower may pay a fee to the Fund in connection
with the loan) and payments for fees paid to the securities lending agent and
for certain other administrative expenses.

      A Fund will have the right to call a loan and obtain the securities loaned
on notice to the borrower within the normal and customary settlement time for
the securities. While securities are on loan, the borrower is obligated to pay
the Fund amounts equal to any income or other distribution from the securities.

      A Fund will invest any cash collateral in a money market fund approved by
the Board. Any such money market fund is expected to be managed by the Adviser.
Any such investment of cash collateral will be subject to the money market
fund's investment risk. The Funds may pay reasonable finders', administrative
and custodial fees in connection with a loan.

      A Fund will not 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
voting or ownership rights. When the Fund lends its securities, its investment
performance will continue to reflect the value of securities on loan.

Loan Participations and Assignments
-----------------------------------

      A Fund may invest in direct debt instruments, which are interests in
amounts owed to lenders or lending syndicates by corporate, governmental, or
other borrowers ("Loans") either by participating as co-lender at the time the
loan is originated ("Participations") or by buying an interest in the loan in
the secondary market from a financial institution or institutional investor
("Assignments"). A loan is often administered by a bank or other financial
institution that acts as agent for the holders. The financial status of the
agent interposed between a Fund and a borrower may affect the ability of the
Fund to receive principal and interest payments.

      The success of a Fund's investment may depend on the skill with which an
agent administers the terms of the corporate loan agreements, monitors borrower
compliance with covenants, collects principal, interest and fee payments from
borrowers and, where necessary, enforces creditor remedies against borrowers.
The agent typically has broad discretion in enforcing loan agreements.

      A Fund's investment in Participations typically will result in the Fund
having a contractual relationship only with the financial institution arranging
the Loan with the borrower (the "Lender") and not with the borrower directly.
The Fund will have the right to receive payments of principal, interest and any
fees to which it is entitled only from the Lender selling the Participation and
only upon receipt by the Lender of the payments from the borrower. In connection
with purchasing Participations, a Fund generally will have no right to enforce
compliance by the borrower with the terms of the loan agreement relating to the
Loan, nor any rights of set-off against the borrower, and a Fund may not
directly benefit from any collateral supporting the Loan in which it has
purchased the Participation. As a result, the Fund may be subject to the credit
risk of both the borrower and the Lender that is selling the Participation. In
the event of the insolvency of the Lender selling a Participation, a Fund may be
treated as a general creditor of the Lender and may not benefit from any set-off
between the Lender and the borrower. Certain Participations may be structured in
a manner designed to avoid purchasers of Participations being subject to the
credit risk of the Lender with respect to the Participation; but even under such
a structure, in the event of the Lender's insolvency, the Lender's servicing of
the Participation may be delayed and the assignability of the Participation
impaired. A Fund will acquire Participations only if the Lender interpositioned
between a Fund and the borrower is a Lender having total assets of more than $25
billion and whose senior unsecured debt is rated investment grade (i.e., Baa3 or
higher by Moody's Investors Service ("Moody's") or BBB- or higher by Standard &
Poor's Ratings Services ("S&P")) or higher.

      When a Fund purchases Assignments from Lenders it will acquire direct
rights against the borrower on the Loan. Because Assignments are arranged
through private negotiations between potential assignees and potential
assignors, however, the rights and obligations acquired by a Fund as the
purchaser of an assignment may differ from, and be more limited than, those held
by the assigning Lender. The assignability of certain obligations is restricted
by the governing documentation as to the nature of the assignee such that the
only way in which a Fund may acquire an interest in a Loan is through a
Participation and not an Assignment. A Fund may have difficulty disposing of
Assignments and Participations because to do so it will have to assign such
securities to a third party. Because there is no liquid market for such
securities, a Fund anticipates that such securities could be sold only to a
limited number of institutional investors. The lack of a liquid secondary market
may have an adverse impact on the value of such securities and a Fund's ability
to dispose of particular Assignments or Participations when necessary to meet a
Fund's liquidity needs in response to a specific economic event such as a
deterioration in the creditworthiness of the borrower. The lack of a liquid
secondary market for Assignments and Participations also may make it more
difficult for a Fund to assign a value to these securities for purposes of
valuing the Fund's portfolio and calculating its asset value.

      Loans in which a Fund may invest may include participations in "bridge
loans", which are loans taken out by borrowers for a short period (typically
less than six months) pending arrangement of more permanent financing through,
for example, the issuance of bonds, frequently high-yield bonds issued for the
purpose of an acquisition. A Fund may also participate in unfunded loan
commitments, which are contractual obligations for future funding, and may
receive a commitment fee based on the amount of the commitment.

Mortgage-Related Securities, Other Asset-Backed Securities and Structured
Securities
--------------------------------------------------------------------------------

      The mortgage-related securities in which a Fund may invest typically are
securities representing interests in pools of mortgage loans made by lenders
such as savings and loan associations, mortgage bankers and commercial banks and
are assembled for sale to investors (such as a Fund) by governmental,
government-related or private organizations. Private organizations include
commercial banks, savings associations, mortgage companies, investment banking
firms, finance companies, special purpose finance entities (called special
purpose vehicles or SPVs) and other entities that acquire and package loans for
resales as mortgage-related securities. Specifically, these securities may
include pass-through mortgage-related securities, collateralized mortgage
obligations ("CMOs"), CMO residuals, adjustable-rate mortgage securities
("ARMS"), stripped mortgage-backed securities ("SMBSs"), commercial
mortgage-backed securities, mortgage dollar rolls, collateralized obligations
and other securities that directly or indirectly represent a participation in or
are secured by and payable from mortgage loans on real property and other
assets.

      Pass-Through Mortgage-Related Securities. Interests in pools of
mortgage-related securities differ from other forms of debt securities, which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment consisting of both interest and principal
payments. In effect, these payments are a "pass-through" of the monthly payments
made by the individual borrowers on their residential mortgage loans, net of any
fees paid to the issuer or guarantor of such securities. Additional payments are
caused by repayments of principal resulting from the sale of the underlying
residential property, refinancing or foreclosure, net of fees or costs that may
be incurred. Some mortgage-related securities, such as securities issued by the
Government National Mortgage Association, or GNMA, are described as "modified
pass-through". These securities entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, regardless of
whether or not the mortgagor actually makes the payment.

      The average life of pass-through pools varies with the maturities of the
underlying mortgage instruments. In addition, a pool's term may be shortened by
unscheduled or early payments of principal and interest on the underlying
mortgages. The occurrence of mortgage prepayments is affected by factors
including the level of interest rates, general economic conditions, the location
and age of the mortgage and other social and demographic conditions. As
prepayment rates of individual pools vary widely, it is not possible to
accurately predict the average life of a particular pool. For pools of
fixed-rate 30-year mortgages, common industry practice is to assume that
prepayments will result in a 12-year average life. Pools of mortgages with other
maturities or different characteristics will have varying average life
assumptions. The assumed average life of pools of mortgages having terms of less
than 30 years, is less than 12 years, but typically not less than five years.

      Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption. In periods of falling interest rates, the
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities. Conversely, in periods of rising
interest rates the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the pool. Historically, actual average life has been
consistent with the 12-year assumption referred to above. Actual prepayment
experience may cause the yield to differ from the assumed average life yield.
Reinvestment of prepayments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a Fund. The compounding effect
from reinvestment of monthly payments received by a Fund will increase the yield
to shareholders compared with bonds that pay interest semi-annually.

      The principal governmental (i.e., backed by the full faith and credit of
the United States Government) guarantor of mortgage-related securities is GNMA.
GNMA is a wholly-owned United States Government corporation within the
Department of Housing and Urban Development. GNMA is authorized to guarantee,
with the full faith and credit of the United States Government, the timely
payment of principal and interest on securities issued by institutions approved
by GNMA (such as savings and loan institutions, commercial banks and mortgage
bankers) and backed by pools of Federal Housing Administration-insured or U.S.
Department of Veterans Affairs-guaranteed mortgages.

      Government-related (i.e., not backed by the full faith and credit of the
U.S. Government) guarantors include the Federal National Mortgage Association,
or FNMA, and the Federal Home Loan Mortgage Association, or FHLMC. FNMA and
FHLMC are a government-sponsored corporation or corporate instrumentality of the
U.S. Government, respectively (government-sponsored entities or "GSEs"), which
were owned entirely by private stockholders until 2008 when they were placed in
conservatorship by the U.S. Government. After being placed in conservatorship,
the GSEs issued senior preferred stock and common stock to the U.S. Treasury in
an amount equal to 79.9% of each GSE in return for certain funding and liquidity
arrangements. The GSEs continue to operate as going concerns while in
conservatorship and each remains liable for all of its obligations associated
with its mortgage-backed securities. The U.S. Treasury provided additional
funding to the GSEs, but recently the GSEs have been paying dividends to the
U.S. Treasury in a cumulative amount almost equal to the payments made to the
GSEs by the U.S. Treasury since 2008. The future of the GSEs is unclear as
Congress is considering whether to adopt legislation that would severely
restrict or even terminate their operations. FNMA purchases residential
mortgages from a list of approved seller/servicers which include state and
federally-chartered savings and loan associations, mutual savings banks,
commercial banks and credit unions and mortgage bankers. Pass-through securities
issued by FNMA are guaranteed as to timely payment of principal and interest by
FNMA and are now, in light of the funding and liquidity requirements referenced
above, effectively backed by the full faith and credit of the U.S. Government.
Participation certificates issued by FHLMC, which represent interests in
mortgages from FHLMC's national portfolio, are guaranteed by FHLMC as to the
timely payment of interest and ultimate collection of principal and are now, in
effect, backed by the full faith and credit of the U.S. Government.

      Commercial banks, savings and loan associations, private mortgage
insurance companies, mortgage bankers and other secondary market issuers create
pass-through pools of conventional residential mortgage loans. Securities
representing interests in pools created by non-governmental private issuers
generally offer a higher rate of interest than securities representing interests
in pools created by governmental issuers because there are no direct or indirect
governmental guarantees of the underlying mortgage payments. However, private
issuers sometimes obtain committed loan facilities, lines of credit, letters of
credit, surety bonds or other forms of liquidity and credit enhancement to
support the timely payment of interest and principal with respect to their
securities if the borrowers on the underlying mortgages fail to make their
mortgage payments. The ratings of such non-governmental securities are generally
dependent upon the ratings of the providers of such liquidity and credit support
and would be adversely affected if the rating of such an enhancer were
downgraded.

      The structuring of the pass-through pool may also provide credit
enhancement. Examples of such credit support arising out of the structure of the
transaction include the issue of senior and subordinated securities (e.g., the
issuance of securities by a SPV in multiple classes or "tranches", with one or
more classes being senior to other subordinated classes as to payment of
principal and interest, with the result that defaults on the underlying mortgage
loans are borne first by the holders of the subordinated class); creation of
"reserve funds" ( in which case cash or investments, sometimes funded from a
portion of the payments on the underlying mortgage loans, are held in reserve
against future losses); and "overcollateralization" (in which case the scheduled
payments on, or the principal amount of, the underlying mortgage loans exceeds
that required to make payment of the securities and pay any servicing or other
fees). There can be no guarantee the credit enhancements, if any, will be
sufficient to prevent losses in the event of defaults on the underlying mortgage
loans.

      In addition, mortgage-related securities that are issued by private
issuers are not subject to the underwriting requirements for the underlying
mortgages that are applicable to those mortgage-related securities that have a
government or government-sponsored entity guaranteed. As a result, the mortgage
loans underlying private mortgage-related securities may, and frequently do,
have less favorable collateral, credit risk or other underwriting
characteristics than government or government-sponsored mortgage-related
securities and have wider variances in a number of terms, including interest
rate, term, size, purposes and borrower characteristics. Privately issued pools
more frequently include second mortgages, high loan-to-value mortgages and
manufactured housing loans. The coupon rates and maturities of the underlying
mortgage loans in a private-label mortgage-related pool may vary to a greater
extent than those included in a government guaranteed pool, and the pool may
include subprime mortgage loans. Subprime loans refer to loans made to borrowers
with weakened credit histories or with a lower capacity to make timely payments
on their loans. For these reasons, the loans underlying these securities have
had in many cases higher default rates than those loans that meet government
underwriting requirements.

      Collateralized Mortgage Obligations. Another form of mortgage-related
security is a "pay-through" security, which is a debt obligation. A Fund may
invest in other forms of mortgage-related securities including CMOs, which are
debt obligations of the issuer secured by a pool of mortgage loans pledged as
collateral that is legally required to be paid by the issuer, regardless of
whether payments are actually made on the underlying mortgages. CMOs are the
predominant type of "pay-through" mortgage-related security. In a CMO, a series
of bonds or certificates is issued in multiple classes. Each class of a CMO,
often referred to as a "tranche", is issued at a specific coupon rate and has a
stated maturity or final distribution date. Principal prepayments on collateral
underlying a CMO may cause one or more tranches of the CMO to be retired
substantially earlier than the stated maturities or final distribution dates of
the collateral. Although payment of the principal of, and interest on, the
underlying collateral securing privately issued CMOs may be guaranteed by GNMA,
FNMA or FHLMC, these CMOs represent obligations solely of the private issuer and
are not insured or guaranteed by GNMA, FNMA, FHLMC, any other governmental
agency or any other person or entity.

      Adjustable-Rate Mortgage Securities. Another type of mortgage-related
security, known as adjustable-rate mortgage securities ("ARMS"), bears interest
at a rate determined by reference to a predetermined interest rate or index.
ARMS may be secured by fixed-rate mortgages or adjustable-rate mortgages. ARMS
secured by fixed-rate mortgages generally have lifetime caps on the coupon rates
of the securities. To the extent that general interest rates increase faster
than the interest rates on the ARMS, these ARMS will decline in value. The
adjustable-rate mortgages that secure ARMS will frequently have caps that limit
the maximum amount by which the interest rate or the monthly principal and
interest payments on the mortgages may increase. These payment caps can result
in negative amortization (i.e., an increase in the balance of the mortgage
loan). Furthermore, since many adjustable-rate mortgages only reset on an annual
basis, the values of ARMS tend to fluctuate to the extent that changes in
prevailing interest rates are not immediately reflected in the interest rates
payable on the underlying adjustable-rate mortgages.

      Stripped Mortgage-Related Securities. Stripped mortgage-related securities
("SMRS") are mortgage-related securities that are usually structured with
separate classes of securities collateralized by a pool of mortgages or a pool
of mortgage-backed bonds or pass-through securities, with each class receiving
different proportions of the principal and interest payments from the underlying
assets. A common type of SMRS has one class of interest-only securities ("IOs")
receiving all of the interest payments from the underlying assets and one class
of principal-only securities ("POs") receiving all of the principal payments
from the underlying assets. IOs and POs are extremely sensitive to interest rate
changes and are more volatile than mortgage-related securities that are not
stripped. IOs tend to decrease in value as interest rates decrease and are
extremely sensitive to the rate of principal payments (including prepayments) on
the related underlying mortgage assets, and a rapid rate of principal
prepayments may have a material adverse effect on the yield to maturity of the
IO class. POs generally increase in value as interest rates decrease. If
prepayments of the underlying mortgages are greater than anticipated, the amount
of interest earned on the overall pool will decrease due to the decreasing
principal balance of the assets. Due to their structure and underlying cash
flows, SMRS may be more volatile than mortgage-related securities that are not
stripped. Changes in the values of IOs and POs can be substantial and occur
quickly, such as occurred in the first half of 1994 when the value of many POs
dropped precipitously due to increases in interest rates.

      A Fund will only invest in SMRS that are issued by the U.S. Government,
its agencies or instrumentalities and supported by the full faith and credit of
the United States. Although SMRS are purchased and sold by institutional
investors through several investment banking firms acting as brokers or dealers,
the complexity of these instruments and the smaller number of investors in the
sector can lend to illiquid markets in the sector.

      Commercial Mortgage-Backed Securities. Commercial mortgage-backed
securities are securities that represent an interest in, or are secured by,
mortgage loans secured by multifamily or commercial properties, such as
industrial and warehouse properties, office buildings, retail space and shopping
malls, and cooperative apartments, hotels and motels, nursing homes, hospitals
and senior living centers. Commercial mortgage-backed securities have been
issued in public and private transactions by a variety of public and private
issuers using a variety of structures, some of which were developed in the
residential mortgage context, including multi-class structures featuring senior
and subordinated classes. Commercial mortgage-backed securities may pay fixed or
floating-rates of interest. The commercial mortgage loans that underlie
commercial mortgage-related securities have certain distinct risk
characteristics. Commercial mortgage loans generally lack standardized terms,
which may complicate their structure, tend to have shorter maturities than
residential mortgage loans and may not be fully amortizing. Commercial
properties themselves tend to be unique and are more difficult to value than
single-family residential properties. In addition, commercial properties,
particularly industrial and warehouse properties, are subject to environmental
risks and the burdens and costs of compliance with environmental laws and
regulations.

      Certain Risks. The value of mortgage-related securities is affected by a
number of factors. Unlike traditional debt securities, which have fixed maturity
dates, mortgage-related securities may be paid earlier than expected as a result
of prepayments of underlying mortgages. Such prepayments generally occur during
periods of falling mortgage interest rates. If property owners make unscheduled
prepayments of their mortgage loans, these prepayments will result in the early
payment of the applicable mortgage-related securities. In that event, a Fund may
be unable to invest the proceeds from the early payment of the mortgage-related
securities in investments that provide as high a yield as the mortgage-related
securities. Early payments associated with mortgage-related securities cause
these securities to experience significantly greater price and yield volatility
than is experienced by traditional fixed-income securities. The level of general
interest rates, general economic conditions and other social and demographic
factors affect the occurrence of mortgage prepayments. During periods of falling
interest rates, the rate of mortgage prepayments tends to increase, thereby
tending to decrease the life of mortgage-related securities. Conversely, during
periods of rising interest rates, a reduction in prepayments may increase the
effective life of mortgage-related securities, subjecting them to greater risk
of decline in market value in response to rising interest rates. If the life of
a mortgage-related security is inaccurately predicted, the Fund may not be able
to realize the rate of return it expected.

      As with other fixed-income securities, there is also the risk of
nonpayment of mortgage-related securities, particularly for those securities
that are backed by mortgage pools that contain subprime loans. Market factors
adversely affecting mortgage loan repayments include a general economic
downturn, high unemployment, a general slowdown in the real estate market, a
drop in the market prices of real estate, or higher mortgage payments required
to be made by holders of adjustable-rate mortgages due to scheduled increases or
increases due to higher interest rates.

      Subordinated mortgage-related securities may have additional risks. The
subordinated mortgage-related security may serve as credit support for the
senior securities purchased by other investors. In addition, the payments of
principal and interest on these subordinated securities generally will be made
only after payments are made to the holders of securities senior to the
subordinated securities. Therefore, if there are defaults on the underlying
mortgage loans, the holders of subordinated mortgage-related securities will be
less likely to receive payments of principal and interest and will be more
likely to suffer a loss.

      Commercial mortgage-related securities, like all fixed-income securities,
generally decline in value as interest rates rise. Moreover, although generally
the value of fixed-income securities increases during periods of falling
interest rates, this inverse relationship is not as marked in the case of
single-family residential mortgage-related securities, due to the increased
likelihood of prepayments during periods of falling interest rates, and may not
be as marked in the case of commercial mortgage-related securities. The process
used to rate commercial mortgage-related securities may focus on, among other
factors, the structure of the security, the quality and adequacy of collateral
and insurance, and the creditworthiness of the originators, servicing companies
and providers of credit support.

      Although the market for mortgage-related securities is becoming
increasingly liquid, those issued by certain private organizations may not be
readily marketable. There may be a limited market for the securities, especially
when there is a perceived weakness in the mortgage and real estate market
sectors. In particular, the secondary markets for CMOs, IOs and POs may be more
volatile and less liquid than those for other mortgage-related securities,
thereby potentially limiting the Fund's ability to buy or sell those securities
at any particular time. Without an active trading market, mortgage-related
securities held in the Fund's portfolio may be particularly difficult to value
because of the complexities involved in the value of the underlying mortgages.
In addition, the rating agencies may have difficulties in rating commercial
mortgage-related securities through different economic cycles and in monitoring
such ratings on a longer-term basis.

      As with fixed-income securities generally, the value of mortgage-related
securities can also be adversely affected by increases in general interest rates
relative to the yield provided by such securities. Such an adverse effect is
especially possible with fixed-rate mortgage securities. If the yield available
on other investments rises above the yield of the fixed-rate mortgage securities
as a result of general increases in interest rate levels, the value of the
mortgage-related securities will decline.

      Other Asset-Backed Securities. A Fund may invest in other asset-backed
securities. The securitization techniques used to develop mortgage-related
securities are being applied to a broad range of financial assets. Through the
use of trusts and special purpose corporations, various types of assets,
including automobile loans and leases, credit card receivables, home equity
loans, equipment leases and trade receivables, are being securitized in
structures similar to the structures used in mortgage securitizations. For
example, a Fund may invest in collateralized debt obligations ("CDOs"), which
include collateralized bond obligations ("CBOs"), collateralized loan
obligations ("CLOs"), and other similarly structured securities. CBOs and CLOs
are types of asset-backed securities. A CBO is a trust, which is backed by a
diversified pool of high-risk, below investment grade fixed-income securities. A
CLO is a trust typically collateralized by a pool of loans, which may include,
among others, domestic and foreign senior secured loans, senior unsecured loans,
and subordinate corporate loans, including loans that may be rated below
investment grade or equivalent unrated loans. These asset-backed securities are
subject to risks associated with changes in interest rates, prepayment of
underlying obligations and defaults similar to the risks of investment in
mortgage-related securities discussed above.

      Each type of asset-backed security also entails unique risks depending on
the type of assets involved and the legal structure used. For example, credit
card receivables are generally unsecured obligations of the credit card holder
and the debtors are entitled to the protection of a number of state and federal
consumer credit laws, many of which give such debtors the right to set off
certain amounts owed on the credit cards, thereby reducing the balance due.
There have also been proposals to cap the interest rate that a credit card
issuer may charge. In some transactions, the value of the asset-backed security
is dependent on the performance of a third party acting as credit enhancer or
servicer. Furthermore, in some transactions (such as those involving the
securitization of vehicle loans or leases) it may be administratively burdensome
to perfect the interest of the security issuer in the underlying collateral and
the underlying collateral may become damaged or stolen.

      Structured Securities. A Fund may invest in securities issued in
structured financing transactions, which generally involve aggregating types of
debt assets in a pool or special purpose entity and then issuing new securities.
Types of structured financings include, for example, mortgage-related and other
asset-backed securities. A Fund's investments include investments in structured
securities that represent interests in entities organized and operated solely
for the purpose of restructuring the investment characteristics of debt
obligations. This type of restructuring involves the deposit with or purchase by
an entity, such as a corporation or trust, of specified instruments (such as
commercial bank loans) and the issuance by that entity of one or more classes of
securities ("Structured Securities") backed by, or representing interests in,
the underlying instruments. The cash flow on the underlying instruments may be
apportioned among the newly issued Structured Securities to create securities
with different investment characteristics such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to Structured Securities is dependent on the extent of the cash
flow on the underlying instruments. Because Structured Securities of the type in
which the Fund anticipates it will invest typically involve no credit
enhancement, their credit risk generally will be equivalent to that of the
underlying instruments.

      A Fund is permitted to invest in a class of Structured Securities that is
either subordinated or unsubordinated to the right of payment of another class.
Subordinated Structured Securities typically have higher yields and present
greater risks than unsubordinated Structured Securities.

      Under the terms of subordinated securities, payments that would be made to
their holders may be required to be made to the holders of more senior
securities and/or the subordinated or junior securities may have junior liens,
if they have any rights at all, in any collateral (meaning proceeds of the
collateral are required to be paid first to holders of more senior securities).
As a result, subordinated or junior securities will be disproportionately
affected by a default or even a perceived decline in the creditworthiness of the
issuer.

Preferred Stock
---------------

      A Fund may invest in preferred stock. Preferred stock is an equity
security that has features of debt because it generally entitles the holder to
periodic payments at a fixed rate of return. Preferred stock is subordinated to
any debt the issuer has outstanding but has liquidation preference over common
stock. Accordingly, preferred stock dividends are not paid until all debt
obligations are first met. Preferred stock may be subject to more fluctuations
in market value, due to changes in market participants' perceptions of the
issuer's ability to continue to pay dividends, than debt of the same issuer.

Real Estate Investment Trusts
-----------------------------

      Real Estate Investment Trusts ("REITs") are pooled investment vehicles
that 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 and principal payments. Similar to investment companies,
such as the Funds, REITs are not taxed on income distributed to shareholders
provided they comply with several requirements of the Code. A 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 and Buy/Sell Back Transactions
----------------------------------------------------

      A repurchase agreement is an agreement by which a 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 week later. The
purchase and repurchase obligations are transacted under one document. 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, a 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 or cash equal to the amount by which the market value of the
securities falls below the resale amount. Because a repurchase agreement permits
a 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 a 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. A 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 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.

      A Fund may enter into buy/sell back transactions, which are similar to
repurchase agreements. In this type of transaction, a Fund enters a trade to buy
securities at one price and simultaneously enters a trade to sell the same
securities at another price on a specified date. Similar to a repurchase
agreement, the repurchase price is higher than the sale price and reflects
current interest rates. Unlike a repurchase agreement, however, the buy/sell
back transaction, though done simultaneously, constitutes two separate legal
agreements. A buy/sell back transaction also differs from a repurchase agreement
in that the seller is not required to provide margin payments if the value of
the securities falls below the repurchase price because the transaction
constitutes two separate transactions. A Fund has the risk of changes in the
value of the purchased security during the term of the buy/sell back agreement
although these agreements typically provide for the repricing of the original
transaction at a new market price if the value of the security changes by a
specific amount.

Reverse Repurchase Agreements
-----------------------------

      Reverse repurchase agreements involve sales by a Fund of portfolio assets
concurrently with an agreement by the Fund to repurchase the same assets at a
later date at a fixed price. During the reverse repurchase agreement period, a
Fund continues to receive principal and interest payments on these securities.
Generally, the effect of such a transaction is that the Fund can recover all or
most of the cash invested in the portfolio securities involved during the term
of the reverse repurchase agreement, while it will be able to keep the interest
income associated with those portfolio securities. Such transactions are
advantageous only if the interest cost to the Fund of the reverse repurchase
transaction is less than the cost of otherwise obtaining the cash.

      Reverse repurchase agreements are considered to be a loan to a Fund by the
counterparty, collateralized by the assets subject to repurchase because the
incidents of ownership are retained by the Fund. By entering into reverse
repurchase agreements, a Fund obtains additional cash to invest in other
securities. A Fund may use reverse repurchase agreements for borrowing purposes
if it believes that the cost of this form of borrowing will be lower than the
cost of bank borrowing. Reverse repurchase agreements create leverage and are
speculative transactions because they allow a Fund to achieve a return on a
larger capital base relative to its NAV. The use of leverage creates the
opportunity for increased income for a Fund's shareholders when the Fund
achieves a higher rate of return on the investment of the reverse repurchase
agreement proceeds than it pays in interest on the reverse repurchase
transactions. However, there is the risk that returns could be reduced if the
rates of interest on the investment proceeds do not exceed the interest paid by
a Fund on the reverse repurchase transactions.

      Reverse repurchase agreements involve the risk that the market value of
the securities the Fund is obligated to repurchase under the agreement may
decline below the repurchase price. In the event the buyer of securities under a
reverse repurchase agreement files for bankruptcy or becomes insolvent, a Fund's
use of the proceeds of the agreement may be restricted pending a determination
by the other party, or its trustee or receiver, whether to enforce the Fund's
obligation to repurchase the securities. In addition, the use of these
investments results in leveraging a Fund's assets because the Fund uses the
proceeds to make investments in other securities. See "Certain Risk and Other
Considerations - Borrowing and Use of Leverage" below.

Rights and Warrants
-------------------

      A Fund may invest in rights and 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 a 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.

Securities Acquired in Restructurings and Workouts
--------------------------------------------------

      A Fund's investments may include fixed-income securities (particularly
lower-rated fixed-income securities) or loan participations that default or are
in risk of default ("Distressed Securities"). A Fund's investments may also
include senior obligations of a borrower issued in connection with a
restructuring pursuant to Chapter 11 of the U.S. Bankruptcy Code (commonly known
as "debtor-in-possession" or "DIP" financings). Distressed Securities may be the
subject of restructurings outside of bankruptcy court in a negotiated workout or
in the context of bankruptcy proceedings. In connection with these investments
or an exchange or workout of such securities, a Fund may determine or be
required to accept various instruments. These instruments may include, but are
not limited to, equity securities, warrants, rights, participation interests in
sales of assets and contingent-interest obligations. Depending upon, among other
things, the Adviser's evaluation of the potential value of such securities in
relation to the price that could be obtained at any given time if they were
sold, a Fund may determine to hold the securities in its portfolio.

Securities Ratings
------------------

      The ratings of fixed-income securities by Moody's, S&P, Fitch Ratings
("Fitch"), Dominion Bond Rating Service Ltd. and A.M. Best Company are a
generally accepted barometer of credit risk. They are, however, subject to
certain limitations from an investor's standpoint. The rating of an issuer is
heavily weighted by past developments and does not necessarily reflect probable
future conditions. There is frequently a lag between the time a rating is
assigned and the time it is updated. In addition, there may be varying degrees
of difference in credit risk of securities within each rating category.

      Securities rated Baa, BBB+, BBB, or BBB- by S&P or Baa1, Baa2 or Baa3 by
Moody's are considered by Moody's to have speculative characteristics. Sustained
periods of deteriorating economic conditions or rising interest rates are more
likely to lead to a weakening in the issuer's capacity to pay interest and repay
principal than in the case of higher-rated securities.

      Non-rated securities will also be considered for investment by a Fund when
the Adviser believes that the financial condition of the issuers of such
securities, or the protection afforded by the terms of the securities
themselves, limits the risk to the Fund to a degree comparable to that of rated
securities which are consistent with the Fund's objectives and policies.

      The Adviser generally uses ratings issued by S&P, Moody's, Fitch and
Dominion Bond Rating Service Ltd. Some securities are rated by more than one of
these ratings agencies, and the ratings assigned to the security by the rating
agencies may differ. In such an event and for purposes of determining compliance
with restrictions on investments for the Fund, if a security is rated by two or
more rating agencies, the Adviser will deem the security to be rated at the
highest rating. For example, if a security is rated by Moody's and S&P only,
with Moody's rating the security as Ba and S&P as BBB, the Adviser will deem the
security to be rated as the equivalent of BBB (i.e., Baa by Moody's and BBB by
S&P). Or, if a security is rated by Moody's, S&P and Fitch, with Moody's rating
the security as Ba, S&P as BBB and Fitch as BB, the Adviser will deem the
security to be rated as the equivalent of BBB (i.e., Ba1 by Moody's, BBB by S&P
and BBB by Fitch).

      The Adviser will try to reduce the risk inherent in a Fund's investment
approach through credit analysis, diversification and attention to current
developments and trends in interest rates and economic conditions. However,
there can be no assurance that losses will not occur. In considering investments
for the Fund, the Adviser will attempt to identify those high-yielding
securities whose financial condition is adequate to meet future obligations, has
improved, or is expected to improve in the future. The Adviser's analysis
focuses on relative values based on such factors as interest or dividend
coverage, asset coverage, earnings prospects, and the experience and managerial
strength of the issuer.

      Unless otherwise indicated, references to securities ratings by one rating
agency in this SAI shall include the equivalent rating by another rating agency.

Short Sales
-----------

      A Fund may make short sales of securities or maintain a short position. A
short sale is effected by selling a security that a Fund does not own, or if the
Fund does own such security, it is not to be delivered upon consummation of
sale. A short sale is against the box to the extent that a Fund
contemporaneously owns or has the right to obtain securities identical to those
sold. A short sale of a security involves the risk that, instead of declining,
the price of the security sold short will rise. If the price of the securities
sold short increases between the time of a 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 gain. The potential for the price of a
fixed-income security sold short to rise is a function of both the remaining
maturity of the obligation, its creditworthiness and its yield. Unlike short
sales of equities or other instruments, the potential for the price of a
fixed-income security to rise may be limited due to the fact that the security
will be no more than par at maturity. However, the short sale of other
instruments or securities generally, including fixed-income securities
convertible into equities or other instruments, a fixed-income security trading
at a deep discount from par or which pays a coupon that is high in relative or
absolute terms, or which is denominated in a currency other than the U.S.
Dollar, involves the possibility of a theoretically unlimited loss since there
is a theoretically unlimited potential for the market price of the security sold
short to increase. Short sales may be used in some cases by a Fund to defer the
realization of gain or loss for federal income tax purposes on securities then
owned by the Fund. See "Dividends, Distributions and Taxes - Tax Straddles" for
a discussion of certain special federal income tax considerations that may apply
to short sales which are entered into by the Fund.

Short-Term Investments
----------------------

      A Fund may invest in short-term investments including corporate commercial
paper and other short-term commercial obligations, in each case rated or issued
by companies with similar securities outstanding that are rated Prime-1, Aa3 or
better by Moody's or A-1, AA- or better by S&P; obligations (including
certificates of deposit, time deposits, demand deposits, and bankers'
acceptances) of banks with securities outstanding that are rated Prime-1, Aa3 or
better by Moody's or A-1, AA- or better by S&P; and obligations issued or
guaranteed by the U.S. Government or its agencies or instrumentalities with
remaining maturities not exceeding 18 months.

      A Fund may invest in short-term debt securities rated BBB- or higher by
S&P or Baa3 or higher by Moody's or, if not rated, of equivalent credit quality
as determined by the Adviser. The Fund expects that it will not retain a
short-term debt security that is downgraded below BBB- or Baa3 (or an equivalent
rating) or, if not rated, determined by the Adviser to have undergone similar
credit quality deterioration, subsequent to purchase by the Fund.

Special Situations
------------------

      A Fund may invest in special situations from time to time. A special
situation arises when, in the opinion of the Fund's management, the securities
of a particular company will, within a reasonably estimable period of time, be
accorded market recognition at an appreciated value solely by reason of a
development particularly or uniquely applicable to that company and regardless
of general business conditions or movements of the market as a whole.
Developments creating special situations might include, among others, the
following: liquidations, reorganizations, recapitalizations or mergers, material
litigation, technological breakthroughs and new management or management
policies. Although large and well-known companies may be involved, special
situations often involve much greater risk than is inherent in ordinary
investment securities.

Standby Commitment Agreements
-----------------------------

      A Fund may, from time to time, enter into standby commitment agreements.
Such agreements commit a Fund, for a stated period of time, to purchase 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 a Fund is paid a
commitment fee, regardless of whether or not the security is ultimately issued.
A 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.

      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, 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.

      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 a 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.

Structured Products
-------------------

      A Fund may invest in structured products. Structured products, including
indexed or structured securities, combine the elements of futures contracts or
options with those of debt, preferred equity or a depositary instrument.
Generally, the principal amount, amount payable upon maturity or redemption, or
interest rate of a structured product is tied (either positively or negatively)
to prices, changes in prices, or differences between prices, of underlying
assets, such as securities, currencies, intangibles, goods, articles or
commodities or by reference to an unrelated benchmark related to an objective
index, economic factor or other measure, such as interest rates, currency
exchange rates, commodity indices, and securities indices. The interest rate or
(unlike most fixed-income securities) the principal amount payable at maturity
of a structured product may be increased or decreased depending on changes in
the value of the underlying asset or benchmark.

      Structured products may take a variety of forms. Most commonly, they are
in the form of debt instruments with interest or principal payments or
redemption terms determined by reference to the value of a currency or commodity
or securities index at a future point in time, but may also be issued as
preferred stock with dividend rates determined by reference to the value of a
currency or convertible securities with the conversion terms related to a
particular commodity.

      Investing in structured products may be more efficient and/or less
expensive for a Fund than investing in the underlying assets or benchmarks and
the related derivative. These investments can be used as a means of pursuing a
variety of investment goals, including currency hedging, duration management and
increased total return. In addition, structured products may be a tax-advantaged
investment in that they generate income that may be distributed to shareholders
as income rather than short-term capital gains that may otherwise result from a
derivatives transaction.

      Structured products, however, have more risk than traditional types of
debt or other securities. These products may not bear interest or pay dividends.
The value of a structured product or its interest rate may be a multiple of a
benchmark and, as a result, may be leveraged and move (up or down) more steeply
and rapidly than the benchmark. Under certain conditions, the redemption value
of a structured product could be zero. Structured products are potentially more
volatile and carry greater market risks than traditional debt instruments. The
prices of the structured instrument and the benchmark or underlying asset may
not move in the same direction or at the same time. Structured products may be
less liquid and more difficult to price than less complex securities or
instruments or more traditional debt securities. The risk of these investments
can be substantial with the possibility that the entire principal amount is at
risk. The purchase of structured products also exposes a Fund to the credit risk
of the issuer of the structured product.

      Structured Notes and Indexed Securities: A Fund may invest in a particular
type of structured instrument sometimes referred to as a "structured note". The
terms of these notes may be structured by the issuer and the purchaser of the
note. Structured notes are derivative debt instruments, the interest rate or
principal of which is determined by an unrelated indicator (for example, a
currency, security, commodity or index thereof). Indexed securities may include
structured notes as well as securities other than debt securities, the interest
rate or principal of which is determined by an unrelated indicator. The terms of
structured notes and indexed securities may provide that in certain
circumstances no principal is due at maturity, which may result in a total loss
of invested capital. Structured notes and indexed securities may be positively
or negatively indexed, so that appreciation of the unrelated indicator may
produce an increase or a decrease in the interest rate or the value of the
structured note or indexed security at maturity may be calculated as a specified
multiple of the change in the value of the unrelated indicator. Therefore, the
value of such notes and securities may be very volatile. Structured notes and
indexed securities may entail a greater degree of market risk than other types
of debt securities because the investor bears the risk of the unrelated
indicator. Structured notes or indexed securities also may be more volatile,
less liquid, and more difficult to accurately price than less complex securities
and instruments or more traditional debt securities.

      Commodity Index-Linked Notes and Commodity-Linked Notes: Structured
products may provide exposure to the commodities markets. These structured notes
may include leveraged or unleveraged commodity index-linked notes, which are
derivative debt instruments with principal and/or coupon payments linked to the
performance of commodity indices. They also include commodity-linked notes with
principal and/or coupon payments linked to the value of particular commodities
or commodities futures contracts, or a subset of commodities and commodities
future contracts. The value of these notes will rise or fall in response to
changes in the underlying commodity, commodity futures contract, subset of
commodities or commodities futures contracts or commodity index. These notes
expose a Fund economically to movements in commodity prices. These notes also
are subject to risks, such as credit, market and interest rate risks, that in
general affect the values of debt securities. In addition, these notes are often
leveraged, increasing the volatility of each note's market value relative to
changes in the underlying commodity, commodity futures contract or commodity
index. Therefore, a Fund might receive interest or principal payments on the
note that are determined based upon a specified multiple of the change in value
of the underlying commodity, commodity futures contract or index.

      Credit-Linked Securities: Credit-linked securities are issued by a limited
purpose trust or other vehicle that, in turn, invests in a basket of derivative
instruments, such as credit default swaps, interest rate swaps and other
securities, in order to provide exposure to certain high-yield or other
fixed-income markets. For example, a Fund may invest in credit-linked securities
as a cash management tool in order to gain exposure to certain high-yield
markets and/or to remain fully invested when more traditional income-producing
securities are not available. Like an investment in a bond, investments in
credit-linked securities represent the right to receive periodic income payments
(in the form of distributions) and payment of principal at the end of the term
of the security. However, these payments are conditioned on the trust's receipt
of payments from, and the trust's potential obligations to, the counterparties
to the derivative instruments and other securities in which the trust invests.
For instance, the trust may sell one or more credit default swaps, under which
the trust would receive a stream of payments over the term of the swap
agreements provided that no event of default has occurred with respect to the
referenced debt obligation upon which the swap is based. If a default occurs,
the stream of payments may stop and the trust would be obligated to pay the
counterparty the par value (or other agreed-upon value) of the referenced debt
obligation. This, in turn, would reduce the amount of income and principal that
a Fund would receive as an investor in the trust. A Fund' investments in these
instruments are indirectly subject to the risks associated with derivative
instruments, including, among others, credit risk, default or similar event
risk, counterparty risk, interest rate risk, and leverage risk and management
risk. These securities are generally structured as Rule 144A securities so that
they may be freely traded among institutional buyers. However, changes in the
market for credit-linked securities or the availability of willing buyers may
result in the securities becoming illiquid.

U.S. Government Securities
--------------------------

      U.S. Government securities may be backed by the full faith and credit of
the United States, supported only by the right of the issuer to borrow from the
U.S. Treasury or backed only by the credit of the issuing agency itself. These
securities include: (i) the following U.S. Treasury securities, which are backed
by the full faith and credit of the United States and differ only in their
interest rates, maturities and times of issuance: U.S. Treasury bills
(maturities of one year or less with no interest paid and hence issued at a
discount and repaid at full face value upon maturity), U.S. Treasury notes
(maturities of one to ten years with interest payable every six months) and U.S.
Treasury bonds (generally maturities of greater than ten years with interest
payable every six months); (ii) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities that are supported by the full faith
and credit of the U.S. Government, such as securities issued by GNMA, the
Farmers Home Administration, the Department of Housing and Urban Development,
the Export-Import Bank, the General Services Administration and the Small
Business Administration, including obligations that are issued by private
issuers that are guaranteed as to principal or interest by the U.S. Government,
its agencies or instrumentalities; and (iii) obligations issued or guaranteed by
U.S. Government agencies and instrumentalities that may not be supported by the
full faith and credit of the U.S. Government or a right to borrow from the U.S.
Treasury, such as securities issued by the FNMA and FHLMC, and governmental
collateralized mortgage obligations ("CMOs"). The maturities of the U.S.
Government securities listed in paragraphs (i) and (ii) above usually range from
three months to 30 years. Such securities, except GNMA certificates, normally
provide for periodic payments of interest in fixed amount with principal
payments at maturity or specified call dates.

      U.S. Government securities also include certain stripped mortgage-related
securities. Stripped mortgage-related securities and principal-only securities
are described in more detail in "Mortgage-Related Securities and Other
Asset-Backed Securities -Stripped Mortgage-Related Securities" above. In
addition, other U.S. Government agencies and instrumentalities have issued
stripped securities that are similar to SMRS.

      Inflation-indexed securities, such as Treasury Inflation-Protected
Securities, or TIPS, are fixed income securities whose principal value is
periodically adjusted according to the rate of inflation. If the index measuring
inflation falls, the principal value of these securities will be adjusted
downward, and consequently the interest payable on these securities (calculated
with respect to a smaller principal amount) will be reduced. Repayment of the
original bond principal upon maturity (as adjusted for inflation) is guaranteed
in the case of U.S. Treasury inflation-protected securities. For bonds that do
not provide a similar guarantee, the adjusted principal value of the bond repaid
at maturity may be less than the original principal.

      Inflation-indexed securities tend to react to changes in real interest
rates. In general, the price of these securities can fall when real interest
rates rise, and can rise when real interest rates fall. In addition, the value
of these securities may be vulnerable to changes in expectations of inflation.
Interest payments on inflation-indexed securities can be unpredictable and will
vary as the principal and/or interest is adjusted for inflation.

      TIPS, which are issued by the U.S Treasury, use the Consumer Price Index
for Urban Consumers, or the CPI, as the inflation measure. The principal of a
TIPS increases with inflation and decreases with deflation, as measured by the
CPI. When a TIPS matures, the holder is paid the adjusted principal or original
principal, whichever is greater. TIPS pay interest twice a year, at a fixed
rate, which is determined by auction at the time the TIPS are issued. The rate
is applied to the adjusted principal; so, like the principal, interest payments
rise with inflation and fall with deflation. TIPS are issued in terms of 5, 10,
and 20 years.

      Guarantees of securities by the U.S. Government or its agencies or
instrumentalities guarantee only the payment of principal and interest on the
securities, and do not guarantee the securities' yield or value or the yield or
value of the shares of the Fund that holds the securities.

      U.S. Government securities are considered among the safest of fixed-income
investments. As a result, however, their yields are generally lower than the
yields available from other fixed-income securities.

Variable, Floating and Inverse Floating Rate Securities
-------------------------------------------------------

      These securities have interest rates that are reset at periodic intervals,
usually by reference to some interest rate index or market interest rate.
Although the rate adjustment feature may act as a buffer to reduce sharp changes
in the value of these securities, they are still subject to changes in value
based on changes in market interest rates or changes in the issuer's
creditworthiness. Because the interest rate is reset only periodically, changes
in the interest rate on these securities may lag behind changes in prevailing
market interest rates. Also, some of these securities (or the underlying
mortgages) are subject to caps or floors that limit the maximum change in the
interest rate during a specified period or over the life of the security.

Certain Risk and Other Considerations
-------------------------------------

      Borrowing and Use of Leverage. A Fund may use borrowings for investment
purposes subject to the restrictions of the 1940 Act. Borrowings by a Fund
result in the leveraging of a Fund's shares of common stock. The proceeds of
such borrowings will be invested in accordance with the Fund's investment
objectives and policies. A Fund also may create leverage through the use of
derivatives or use leverage for investment purposes by entering into
transactions such as reverse repurchase agreements and forward contracts. This
means that the Fund will use the cash proceeds made available during the terms
of these transactions to make investments in other securities.

      Utilization of leverage, which is usually considered speculative, however,
involves certain risks to a Fund's shareholders. These include a higher
volatility of the NAV of a Fund's shares of common stock and the relatively
greater effect on the NAV of the shares caused by favorable or adverse changes
in market conditions or interest rates. So long as a Fund is able to realize a
net return on the leveraged portion of its investment portfolio that is higher
than the interest expense paid on borrowings, or the carrying costs of leveraged
transactions, the effect of leverage will be to cause the Fund's shareholders to
realize a higher net return than if the Fund were not leveraged. However, to the
extent that the interest expense on borrowings, or the carrying costs of
leveraged transactions approaches the return on the leveraged portion of a
Fund's investment portfolio, the benefit of leverage to the Fund's shareholders
will be reduced, and if the interest expense on borrowings or carrying costs of
leveraged transactions were to exceed the net return to shareholders, the Fund's
use of leverage would result in a lower rate of return than if the Fund were not
leveraged. Similarly, the effect of leverage in a declining market could be a
greater decrease in NAV per share than if a Fund were not leveraged. In an
extreme case, if a Fund's current investment income were not sufficient to meet
the interest expense on borrowings or the carrying costs of leveraged
transactions, it could be necessary for the Fund to liquidate certain of its
investments in adverse circumstances, potentially significantly reducing its
NAV.

      Certain transactions, such as derivatives transactions, forward
commitments, reverse repurchase agreements and short sales, involve leverage and
may expose a Fund to potential losses that, in some cases, may exceed the amount
originally invested by the Fund. When a Fund engages in such transactions, it
will, in accordance with guidance provided by the SEC or its staff in, among
other things, regulations, interpretative releases and no-action letters,
deposit in a segregated account certain liquid assets with a value at least
equal to the Fund's exposure, on a marked-to-market or on another relevant
basis, to the transaction. Transactions for which assets have been segregated
will not be considered "senior securities" for purposes of the Fund's investment
restriction concerning senior securities. The segregation of assets is intended
to enable a Fund to have assets available to satisfy its obligations with
respect to these transactions, but will not limit the Fund's exposure to loss.

      Cyber Security Risk. As the use of the Internet and other technologies has
become more prevalent in the course of business, the Funds and their service
providers, including the Adviser, have become more susceptible to operational
and financial risks associated with cyber security. Cyber security incidents can
result from deliberate attacks such as gaining unauthorized access to digital
systems (e.g., through "hacking" or malicious software coding) for purposes of
misappropriating assets or sensitive information, corrupting data, or causing
operational disruption, or from unintentional events, such as the inadvertent
release of confidential information. Cyber security failures or breaches of the
Funds or their service providers or the issuers of securities in which the Funds
invest have the ability to cause disruptions and affect business operations,
potentially resulting in financial losses, the inability of Fund shareholders to
transact business, violations of applicable privacy and other laws, regulatory
fines, reputational damage, reimbursement or other compensation costs, and/or
additional compliance costs. While measures have been developed that are
designed to reduce the risks associated with cyber security, there is no
guarantee that those measures will be effective, particularly since the Funds do
not control the cyber security defenses or plans of their service providers,
financial intermediaries and companies in which they invest or with which they
do business.

Real Estate Investments
-----------------------

      If a Fund, including, in particular, Global Real Estate, receives rental
income or income from the disposition of real property acquired as a result of a
default on securities the Fund owns, the receipt of such income may adversely
affect the Fund's ability to retain its tax status as a regulated investment
company. Investments by Global Real Estate in securities of companies providing
mortgage servicing will be subject to the risks associated with refinancings and
their impact on servicing rights.

      Additional Risks of Futures Contracts, Options on Futures Contracts,
Swaps, Forward Contracts and Options on Foreign Currencies. Unlike transactions
entered into by the Funds in futures contracts, swaps, options on foreign
currencies and forward contracts may not be traded on contract markets regulated
by the CFTC or (with the exception of certain foreign currency options) by the
SEC. Such instruments may be traded through financial institutions acting as
market makers, although foreign currency options are also traded on certain
national securities exchanges, such as the Philadelphia Stock Exchange and the
Chicago Board Options Exchange, subject to SEC regulation. Similarly, options on
currencies may be traded over-the-counter. In an OTC trading environment, many
of the protections afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the purchaser of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could be lost.
Moreover, the option writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the margin and
collateral requirements associated with such positions.

      Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the SEC, as are other securities traded on such
exchanges. As a result, many of the protections provided to traders on organized
exchanges will be available with respect to such transactions. In particular,
all foreign currency option positions entered into on a national securities
exchange are cleared and guaranteed by the Options Clearing Corporation ("OCC"),
thereby reducing the risk of counterparty default. Further, a liquid secondary
market in options traded on a national securities exchange may be more readily
available than in the OTC market, potentially permitting the Fund to liquidate
open positions at a profit prior to exercise or expiration, or to limit losses
in the event of adverse market movements.

      The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid secondary
market described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effects of other
political and economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the OTC market. For example,
exercise and settlement of such options must be made exclusively through the
OCC, which has established banking relationships in applicable foreign countries
for this purpose. As a result, the OCC may, if it determines that foreign
governmental restrictions or taxes would prevent the orderly settlement of
foreign currency option exercises, or would result in undue burdens on the OCC
or its clearing member, impose special procedures on exercise and settlement,
such as technical changes in the mechanics of delivery of currency, the fixing
of dollar settlement prices or prohibitions on exercise.

      In addition, futures contracts, options on futures contracts, forward
contracts and options on foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in or the prices of foreign currencies or securities. The value of such
positions also could be adversely affected by (i) other complex foreign
political and economic factors, (ii) lesser availability than in the United
States of data on which to make trading decisions, (iii) delays in a Fund's
ability to act upon economic events occurring in foreign markets during
nonbusiness hours in the United States, (iv) the imposition of different
requirements than in the United States and (v) lesser trading volume.

      Risks of Investments in Foreign Securities. Investors should understand
and consider carefully the substantial risks involved in securities of foreign
companies and governments of foreign nations, some of which are referred to
below, and which are in addition to the usual risks inherent in domestic
investments. Investing in securities of non-U.S. companies which are generally
denominated in foreign currencies, and utilization of derivative investment
products denominated in, or the value of which is dependent upon movements in
the relative value of, a foreign currency, involve certain considerations
comprising both risk and opportunity not typically associated with investing in
U.S. companies. These considerations include changes in exchange rates and
exchange control regulations, political and social instability, expropriation,
imposition of foreign taxes, less liquid markets and less available information
than are generally the case in the United States, higher transaction costs, less
government supervision of exchanges, brokers and issuers, difficulty in
enforcing contractual obligations, lack of uniform accounting and auditing
standards and greater price volatility.

      There is generally less publicly available information about foreign
companies comparable to reports and ratings that are published about companies
in the United States. Foreign issuers are subject to accounting and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. issuers. In particular, the assets and profits appearing on
the financial statements of a foreign issuer may not reflect its financial
position or results of operations in the way they would be reflected had the
financial statement been prepared in accordance with U.S. generally accepted
accounting principles. In addition, for an issuer that keeps accounting records
in local currency, inflation accounting rules in some of the countries in which
the Fund may invest require, for both tax and accounting purposes, that certain
assets and liabilities be restated on the issuer's balance sheet in order to
express items in terms of currency of constant purchasing power. Inflation
accounting may indirectly generate losses or profits. Consequently, financial
data may be materially affected by restatements for inflation and may not
accurately reflect the real condition of those issuers and securities markets.
Substantially less information is publicly available about certain non-U.S.
issuers than is available about U.S. issuers.

      It is contemplated that foreign securities will be purchased in OTC
markets or on stock exchanges located in the countries in which the respective
principal offices of the issuers of the various securities are located, if that
is the best available market. Foreign securities markets are generally not as
developed or efficient as those in the United States. While growing in volume,
they usually have substantially less volume than the New York Stock Exchange
(the "Exchange"), and securities of some foreign companies are less liquid and
more volatile than securities of comparable United States companies. Similarly,
volume and liquidity in most foreign bond markets are less than in the United
States and, at times, volatility of price can be greater than in the United
States. Fixed commissions on foreign stock exchanges are generally higher than
negotiated commissions on United States exchanges, although a Fund will endeavor
to achieve the most favorable net results on its portfolio transactions. There
is generally less government supervision and regulation of stock exchanges,
brokers and listed companies than in the United States.

      Expropriation, confiscatory taxation, nationalization, political, economic
or social instability or other similar developments, such as military coups,
have occurred in the past in countries in which a Fund may invest and could
adversely affect a Fund's assets should these conditions or events recur.

      Foreign investment in certain foreign securities of is restricted or
controlled to varying degrees. These restrictions or controls may at times limit
or preclude foreign investment in certain foreign securities and increase the
costs and expenses of a Fund. Certain countries in which the Fund may invest
require governmental approval prior to investments by foreign persons, limit the
amount of investment by foreign persons in a particular issuer, limit the
investment by foreign persons only to a specific class of securities of an
issuer that may have less advantageous rights than the classes available for
purchase by domiciliaries of the countries and/or impose additional taxes on
foreign investors.

      Certain countries may require governmental approval for the repatriation
of investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if a deterioration occurs in a country's balance of
payments, the country could impose temporary restrictions on foreign capital
remittances.

      Investing in emerging market securities imposes risks different from, and
greater than, risks of investing in domestic securities or in foreign, developed
countries' securities. These risks include: smaller market capitalization of
securities markets, which may suffer periods of relative illiquidity;
significant price volatility; restrictions on foreign investment; and possible
restrictions on repatriation of investment income and capital. In addition,
foreign investors may be required to register the proceeds of sales; and 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 market 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.

      Income from certain investments held by a Fund could be reduced by foreign
income taxes, including withholding taxes. It is impossible to determine the
effective rate of foreign tax in advance. A Fund's NAV may also be affected by
changes in the rates or methods of taxation applicable to that Fund or to
entities in which that Fund has invested. The Adviser generally will consider
the cost of any taxes in determining whether to acquire any particular
investments, but can provide no assurance that the tax treatment of investments
held by a Fund will not be subject to change. A shareholder otherwise subject to
United States federal income taxes may, subject to certain limitations, be
entitled to claim a credit or deduction for U.S. federal income tax purposes for
his or her proportionate share of such foreign taxes paid by the Fund. See
"United States Federal Income Taxation of the Funds".

      Investors should understand that the expense ratio of a Fund investing in
foreign securities may be higher than investment companies investing only in
domestic securities since, among other things, the cost of maintaining the
custody of foreign securities is higher and the purchase and sale of portfolio
securities may be subject to higher transaction charges, such as stamp duties
and turnover taxes.

      For many securities of foreign issuers, there are U.S. Dollar-denominated
ADRs that are traded in the United States on exchanges or OTC. ADRs do not
lessen the foreign exchange risk inherent in investing in the securities of
foreign issuers. However, by investing in ADRs rather than directly in stock of
foreign issuers, a Fund can avoid currency risks which might occur during the
settlement period for either purchases or sales.

      Foreign Currency Transactions. A Fund may invest in securities denominated
in foreign currencies and a corresponding portion of the Fund's revenues will be
received in such currencies. In addition, a Fund may conduct foreign currency
transactions for hedging and non-hedging purposes on a spot (i.e., cash) basis
or through the use of derivatives transactions, such as forward currency
exchange contracts, currency futures and options thereon, and options on
currencies as described above. The dollar equivalent of a 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 a
Fund's income. A 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 a Fund has this
ability, there is no certainty as to whether and to what extent the Fund will
engage in these practices.

      Currency exchange rates may fluctuate significantly over short periods of
time, causing, along with other factors, a Fund's NAV to fluctuate. Currency
exchange rates generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of investments in different
countries, actual or anticipated changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by the intervention of U.S. or foreign governments
or central banks, or the failure to intervene, or by currency controls or
political developments in the United States or abroad. To the extent a Fund's
total assets adjusted to reflect a Fund's net position after giving effect to
currency transactions is denominated or quoted in the currencies of foreign
countries, a Fund will be more susceptible to the risk of adverse economic and
political developments within those countries.

      A Fund will incur costs in connection with conversions between various
currencies. A Fund may hold foreign currency received in connection with
investments when, in the judgment of the Adviser, it would be beneficial to
convert such currency into U.S. Dollars at a later date, based on anticipated
changes in the relevant exchange rate. If the value of the foreign currencies in
which a Fund receives income falls relative to the U.S. Dollar between receipt
of the income and the making of Fund distributions, a Fund may be required to
liquidate securities in order to make distributions if a Fund has insufficient
cash in U.S. Dollars to meet the distribution requirements that the Fund must
satisfy to qualify as a regulated investment company for federal income tax
purposes. Similarly, if the value of a particular foreign currency declines
between the time a 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. In light of these risks, the Fund may engage in certain currency
hedging transactions, which themselves involve certain special risks.

--------------------------------------------------------------------------------

                            INVESTMENT RESTRICTIONS

--------------------------------------------------------------------------------

Fundamental Investment Policies
-------------------------------

      The following fundamental investment policies may not be changed without
approval by the vote of a majority of a Fund's outstanding voting securities,
which means the affirmative vote of the holders of (i) 67% or more of the shares
of the Fund 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 of the Fund, whichever is less.

      As a matter of fundamental policy, a 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;(1)

--------
(1)   Global Real Estate has not adopted policies to concentrate investments in
      any one industry. Although Global Real Estate invests generally in the
      real estate industry sector, the primary economic characteristics of
      companies in this sector are materially different. Global Real Estate
      invests in equity and mortgage REITs, each of which seek different types
      of investments. Equity REITs invest directly in real estate properties and
      mortgage REITs make loans to real estate owners and purchase mortgages on
      real estate. In addition, there are many different types of REITs in which
      Global Real Estate may invest, including for example, those that invest in
      shopping malls, industrial and office buildings, apartments, warehouses,
      lodging and hotels, and health care facilities. REITs may also invest in
      specific regions, states or countries. Foreign REITs or other non-U.S.
      real estate investments may have significantly different characteristics
      than those in the U.S.


      (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) with respect to Discovery Value and International Value, purchase or
sell commodities regulated by the CFTC under the Commodity Exchange Act or
commodities contracts except for futures contracts and options on futures
contracts, and, with respect to Value, Growth and Income, Core Opportunities,
Global Risk Allocation, Global Real Estate, Equity Income, Small Cap Value and
All Market Income may purchase or sell commodities or options thereon to the
extent permitted by applicable law; 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, each Fund, except Small Cap Value and All Market
Income, is diversified (as that term is defined in the 1940 Act). This means
that at least 75% of a 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.

      Small Cap Value and All Market Income are "non-diversified" investment
companies, which means they are not limited in the proportion of their assets
that may be invested in the securities of a single issuer. This policy may be
changed without a shareholder vote. Because the Funds are non-diversified
investment companies, they may invest in a smaller number of issuers than a
diversified investment company, and an investment in a Fund may, under certain
circumstances, present greater risk to an investor than an investment in a
diversified investment company.

Non-Fundamental Investment Policies
-----------------------------------

      The following are descriptions of operating policies that the Funds have
adopted but that are not fundamental and is subject to change without
shareholder approval.

      The Funds may not purchase securities on margin, except (i) as otherwise
provided under rules adopted by the SEC under the 1940 Act or by guidance
regarding the 1940 Act, or interpretations thereof, and (ii) that the Funds may
obtain such short-term credits as are necessary for the clearance of portfolio
transactions, and the Funds may make margin payments in connection with futures
contracts, options, forward contracts, swaps, caps, floors, collars and other
financial instruments.

--------------------------------------------------------------------------------

                            MANAGEMENT OF THE FUNDS

--------------------------------------------------------------------------------

The 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 each
Fund under the supervision of the Boards. The Adviser is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.

      The Adviser is a leading international investment adviser supervising
client accounts with assets as of December 31, 2015 totaling approximately $468
billion (of which approximately $93 billion represented assets of registered
investment companies). As of December 31, 2015, the Adviser managed retirement
assets for many of the largest public and private employee benefit plans
(including 18 of the nation's FORTUNE 100 companies), for public employee
retirement funds across 25 states and the District of Columbia, for investment
companies, and for foundations, endowments, banks and insurance companies
worldwide. Currently, the 32 registered investment companies managed by the
Adviser, comprising approximately 132 separate investment portfolios, had as of
December 31, 2015 approximately 2.7 million stockholder accounts.

      As of December 31, 2015, the ownership structure of the Adviser, expressed
as a percentage of general and limited partnership interests, was as follows:

                AXA and its subsidiaries                     62.3%
                AllianceBernstein Holding L.P.               36.4
                Unaffiliated holders                          1.3
                                                     ---------------------
                                                            100.0%
                                                     =====================

      AXA is a societe anonyme organized under the laws of France and the
holding company for an international group of insurance and related financial
services companies, through certain of its subsidiaries ("AXA and its
subsidiaries"). AllianceBernstein Holding L.P. ("Holding") is a Delaware limited
partnership the units of which ("Holding Units") are traded publicly on the
Exchange under the ticker symbol "AB". As of December 31, 2015, AXA owned
approximately 1.4% of the issued and outstanding assignments of beneficial
ownership of Holding Units.

      AllianceBernstein Corporation (an indirect wholly-owned subsidiary of AXA)
is the general partner of both Holding and the Adviser. AllianceBernstein
Corporation owns 100,000 general partnership units in Holding and a 1% general
partnership interest in the Adviser. Including both the general partnership and
limited partnership interests in Holding and the Adviser, AXA and its
subsidiaries had an approximate 62.8% economic interest in the Adviser as of
December 31, 2015.

Advisory Agreements and Expenses
--------------------------------

      The Adviser serves as investment manager and adviser of each of the Funds,
continuously furnishes an investment program for each Fund, and manages,
supervises and conducts the affairs of each Fund, subject to the oversight of
the Boards.

      Under the Funds' Advisory Agreements, the Adviser furnishes advice and
recommendations with respect to the Funds' portfolios of securities and
investments, and provides persons satisfactory to the Boards to act as officers
of the Funds. Such officers or employees may be employees of the Adviser or of
its affiliates.

      The Adviser is, under the Advisory Agreements, responsible for certain
expenses incurred by the Funds, including, for example, office facilities and
any expenses incurred in promoting the sale of shares of the Funds (other than
the portion of the promotional expenses borne by the Funds in accordance with an
effective plan pursuant to Rule 12b-1 under the 1940 Act, and the costs of
printing prospectuses of the Funds and other reports to shareholders and fees
related to registration with the SEC and with state regulatory authorities).

      The Funds have under the Advisory Agreements assumed the obligation for
payment of all of their other expenses. As to the obtaining of services other
than those specifically provided to the Funds by the Adviser, each Fund may
employ its own personnel. The Advisory Agreements provide for reimbursement to
the Adviser of the costs of certain non-advisory services provided to a Fund.
Costs currently reimbursed include the costs of the Adviser's personnel
performing certain administrative services for the Funds, including clerical,
accounting, legal and other services ("administrative services"), and associated
overhead costs, such as office space, supplies and information technology. The
administrative services are provided to the Funds on a fully-costed basis (i.e.,
includes each personnel's total compensation and a factor reflecting the
Adviser's total cost relating to that personnel, including all related overhead
expenses). The reimbursement of these costs to the Adviser will be specifically
approved by the Boards. During the fiscal year ended November 30, 2015, for
Value Fund, International Value, Discovery Value, Core Opportunities, Global
Risk Allocation, Equity Income, Global Real Estate, Small Cap Value and All
Market Income, the amounts paid to the Adviser for such services amounted to a
total of $52,313, $49,303, $52,313, $49,179, $45,099, $46,998, $51,332, $0 (net
of $56,123 waived by the Adviser) and $0 (net of $63,996 waived by the Adviser),
respectively, after any waiver or reimbursement. During the fiscal year ended
October 31, 2015, for Growth and Income, the amount paid to the Adviser for such
services amounted to a total of $44,872 after any waiver or reimbursement.

      The Advisory Agreements for each of the Funds, except for Small Cap Value
and All Market Income, continue in effect from year to year provided that their
continuance is specifically approved at least annually by majority vote of the
holders of the outstanding voting securities of each Fund or by the
Directors/Trustees ("Directors"), and, in either case, by a majority of the
Directors who are not parties to the Advisory Agreements or "interested persons"
of any such party at a meeting in person called for the purpose of voting on
such matter. Most recently, continuance of the Advisory Agreements for all Funds
was approved by a vote, cast in person, for additional annual terms by the Board
at their meetings held on May 5-7, 2015.

      The Advisory Agreements for each of Small Cap Value and All Market Income
provide that they will continue in effect for two years from their effective
date and thereafter from year to year provided that their continuances are
specifically approved at least annually by majority vote of the holders of the
outstanding voting securities of each Fund or by the Directors/Trustees
("Directors"), and, in either case, by a majority of the Directors who are not
parties to the Advisory Agreements or "interested persons" of any such party at
a meeting in person called for the purpose of voting on such matter.

      Any material amendment to the Advisory Agreements must be approved by the
vote of a majority of the outstanding securities of the relevant Fund and by the
vote of a majority of the Directors who are not interested persons of the Fund
or the Adviser. The Advisory Agreements are terminable without penalty on 60
days' written notice by a vote of a majority of the outstanding voting
securities of each Fund, by a vote of a majority of the Directors, or by the
Adviser on 60 days' written notice, and will automatically terminate in the
event of their assignment. The Advisory Agreements provide 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.

      Certain other clients of the Adviser may have investment objectives and
policies similar to those of the Funds. The Adviser may, from time to time, make
recommendations that result in the purchase or sale of the particular security
by its other clients simultaneously with a purchase or sale thereof by one or
more Funds. 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. 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 Adviser's clients (including a
Fund) are purchasing or selling the same security on a given day through the
same broker or dealer, such transactions may be averaged as to price.

VALUE FUND

      For the services rendered by the Adviser under the Advisory Agreement,
Value Fund paid the Adviser a fee of .55% of the first $2.5 billion, .45% of the
excess over $2.5 billion up to $5 billion and .40% of the excess over $5 billion
as a percentage of the Fund's average daily net assets. The fee is accrued daily
and paid monthly. For the fiscal years of the Fund ended November 30, 2015,
November 30, 2014 and November 30, 2013, the Adviser earned from the Fund
$2,284,324, $2,304,151 and $2,190,165, respectively, in advisory fees.

DISCOVERY VALUE

      For the services rendered by the Adviser under the Advisory Agreement,
Discovery Value paid the Adviser a fee of .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. The fee is
accrued daily and paid monthly. For the fiscal years of the Fund ended November
30, 2015, November 30, 2014 and November 30, 2013, the Adviser earned from the
Fund $18,187,737, $17,649,048 and $15,136,491, respectively, in advisory fees.

INTERNATIONAL VALUE

      For the services rendered by the Adviser under the Advisory Agreement,
International Value pays the Adviser a fee of .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. The fee
is accrued daily and paid monthly. For the fiscal years of the Fund ended
November 30, 2015, November 30, 2014 and November 30, 2013, the Adviser earned
from the Fund $2,836,327, $3,580,184 and $4,248,132, respectively, in advisory
fees.

GROWTH AND INCOME

      For the services rendered by the Adviser under the Advisory Agreement, the
Fund paid the Adviser a fee of .55% of the first $2.5 billion, .45% of the
excess over $2.5 billion up to $5 billion and .40% of the excess over $5 billion
as a percentage of the Fund's average daily net assets. The fee is accrued daily
and paid monthly. For the fiscal years of the Fund ended October 31, 2015,
October 31, 2014 and October 31, 2013, the Adviser received from the Fund
advisory fees of $15,555,402, $13,356,929 and $13,356,929 (of which $594,193,
$635,148 and $0, were waived by the advisor), respectively, in advisory fees.
The Adviser has contractually agreed for the period from the effective date of
the Fund's Prospectus to the effective date of the subsequent Prospectus
incorporating the Fund's annual financial statements (the "Period") to waive its
fee and bear certain expenses so that total expenses do not exceed on an annual
basis .90%, 1.65%, 1.65%, .65%, 1.15%, .90%, .65% and .65% of aggregate average
daily net assets, respectively, for Class A, Class B, Class C, Advisor Class,
Class R, Class K, Class I and Class Z shares. The fee waiver and/or expense
reimbursement agreement automatically extends each year unless the Adviser
provides notice of termination to the Fund at least 60 days prior to the end of
the Period.

CORE OPPORTUNITIES

      For the services rendered by the Adviser under the Advisory Agreement, the
Fund paid the Adviser a fee of .55% of the first $2.5 billion, .45% of the
excess over $2.5 billion up to $5 billion and .40% of the excess over $5 billion
as a percentage of the Fund's average daily net assets. The fee is accrued daily
and paid monthly. For the fiscal years of the Fund ended November 30, 2015,
November 30, 2014 and November 30, 2013, the Adviser earned from the Fund
$886,516, $842,668 and $693,401 (of which $137,291, $214,566 and $154,365, were
waived by the Adviser), respectively, in advisory fees. The Adviser has
contractually agreed for the period from the effective date of the Fund's
Prospectus to the effective date of the subsequent Prospectus incorporating the
Fund's annual financial statements (the "Period") to waive its fee and bear
certain expenses so that total expenses do not exceed on an annual basis 1.15%,
1.90%, 1.90%, .90%, 1.40%, 1.15%, .90% and .90% of aggregate average daily net
assets, respectively, for Class A, Class B, Class C, Advisor Class, Class R,
Class K, Class I and Class Z shares. The fee waiver and/or expense reimbursement
agreement automatically extends each year unless the Adviser provides notice of
termination to the Fund at least 60 days prior to the end of the Period.

GLOBAL RISK ALLOCATION

      For the services rendered by the Adviser under the Advisory Agreement, the
Fund paid the Adviser a fee of .60% of the first $200 million, .50% of the next
$200 million and .40% of the excess over $400 million as a percentage of the
Fund's average daily net assets. The fee is accrued daily and paid monthly. For
the fiscal years ended November 30, 2015, November 30, 2014 and November 30,
2013, the Adviser received from the Fund advisory fees of $2,112,233, $2,283,178
and $2,586,010, respectively, in advisory fees.

EQUITY INCOME

      For the services rendered by the Adviser under the Advisory Agreement, the
Fund paid the Adviser a fee of .55% of the first $2.5 billion, .45% of the
excess over $2.5 billion up to $5 billion and .40% of the excess over $5 billion
as a percentage of the Fund's average daily net assets. The fee is accrued daily
and paid monthly. For the fiscal years of the Fund ended November 30, 2015,
November 30, 2014 and November 30, 2013, the Adviser received from the Fund
$5,054,569, $4,862,770 and $3,711,203, respectively, in advisory fees. The
Adviser has agreed for the period from the effective date of the Fund's
Prospectus to the effective date of the subsequent Prospectus incorporating the
Fund's annual financial statements (the "Period") to waive its fees and bear
certain expenses to the extent necessary to limit total operating expenses on an
annual basis to 1.20%, 1.95%, 1.95%, .95%, 1.45%, 1.20%, .95% and .95% of the
daily net assets for the Class A, Class B, Class C, Advisor Class, Class R,
Class K, Class I and Class Z shares, respectively (the "Expense Caps"). The fee
waiver and/or expense reimbursement agreement automatically extends each fiscal
year unless the Adviser provides notice of termination to the Trust at least 60
days prior to the end of the Period.

GLOBAL REAL ESTATE

      For the services rendered by the Adviser under the Advisory Agreement, the
Fund paid the Adviser a fee of .55% of the first $2.5 billion, .45% of the
excess over $2.5 billion up to $5 billion and .40% of the excess over $5 billion
as a percentage of the Fund's average daily net assets. The fee is accrued daily
and paid monthly. For the fiscal years ended November 30, 2015, November 30,
2014 and November 30, 2013, the Adviser earned from the Fund $918,510, $889,279
and $808,813, respectively, in advisory fees.

SMALL CAP VALUE

      Effective as of December 3, 2014, the Fund has contractually agreed to pay
a monthly fee to the Adviser at an annualized rate of .80% of the Fund's average
daily net assets. The Adviser has contractually agreed to waive its fee and bear
certain expenses so that total expenses (excluding Acquired Fund Fees and
Expenses other than the advisory fees of any AB Fund in which the Fund may
invest, interest expense, brokerage commissions and other transaction costs,
taxes and extraordinary expenses) do not exceed on an annual basis 1.25%, 2.00%,
1.50%, 1.25%, 1.00%, 1.00% and 1.00% of average daily net assets, respectively,
for Class A, Class C, Class R, Class K, Class I, Class Z and Advisor Class
shares. The Fund is offering only its Class A, Class C and Advisor Class shares
currently. This fee waiver and/or expense reimbursement agreement may not be
terminated before March 1, 2017. Fees waived and expenses borne by the Adviser
are subject to reimbursement until the end of the third fiscal year after the
fiscal period in which the fee was waived or the expense was borne. No
reimbursement payment will be made that would cause a Fund's total annualized
operating expenses to exceed the amounts listed above. For the fiscal year ended
November 30, 2015, the Adviser earned from the Fund $312,489 (of which $300,074
was waived by the adviser), in advisory fees.

ALL MARKET INCOME

      Effective as of December 18, 2014, the Fund has contractually agreed to
pay a monthly fee to the Adviser at an annualized rate of .70% of the Fund's
average daily net assets. The Adviser has contractually agreed to waive its
management fee and/or to bear expenses of the Fund through March 1, 2017 to the
extent necessary to prevent total Fund operating expenses (excluding expenses
associated with acquired fund fees and expenses, interest expense, taxes,
extraordinary expenses, and brokerage commissions and other transaction costs),
on an annualized basis, from exceeding .99%, 1.74%, .74%, 1.24%, .99%, .74% and
..74% of average daily net assets, respectively, for Class A, Class C, Advisor
Class, Class R, Class K, Class I and Class Z shares ("expense limitations"). Any
fees and expenses borne by the Adviser may be reimbursed by the Fund until the
end of the third fiscal year after the fiscal period in which the fee was waived
or the expense was borne, provided that no reimbursement payment will be made
that would cause the Fund's Total Annual Fund Operating Expenses to exceed the
expense limitations. In addition, the Adviser has contractually agreed to waive
its management fees and/or bear Fund expenses through March 1, 2017 in an amount
equal to the Fund's share of all fees and expenses of any AB Mutual Funds in
which the Fund invests. For the fiscal year ended November 30, 2015, the Adviser
earned from the Fund $121,197 (all of which was waived by the Adviser), in
advisory fees, and the Adviser reimbursed to the Fund $417,022.

ALL FUNDS

      The Adviser may act as an investment adviser to other persons, firms or
corporations, including investment companies, and is the investment adviser to
the following registered investment companies: AB Bond Fund, Inc., AB Cap Fund,
Inc., AB Core Opportunities Fund, Inc., AB Corporate Shares, AB Discovery Growth
Fund, Inc., AB Equity Income Fund, Inc., AB Exchange Reserves, AB Fixed-Income
Shares, Inc., AB Global Bond Fund, Inc., AB Global Real Estate Investment Fund,
Inc., AB Global Risk Allocation Fund, Inc., AB Global Thematic Growth Fund,
Inc., AB Growth and Income Fund, Inc., AB High Income Fund, Inc., AB
Institutional Funds, Inc., AB International Growth Fund, Inc., AB Large Cap
Growth Fund, Inc., AB Municipal Income Fund, Inc., AB Municipal Income Fund II,
AB Trust, AB Unconstrained Bond Fund, Inc., AB Variable Products Series Fund,
Inc., Bernstein Fund, Inc., Sanford C. Bernstein Fund, Inc., Sanford C.
Bernstein Fund II, Inc., The AB Pooling Portfolios and The AB Portfolios, all
open-end investment companies; and to AllianceBernstein Global High Income Fund,
Inc., AllianceBernstein Income Fund, Inc., AB Multi-Manager Alternative Fund,
AllianceBernstein National Municipal Income Fund, Inc. and Alliance California
Municipal Income Fund, Inc., all registered closed-end investment companies. The
registered investment companies for which the Adviser serves as investment
adviser are referred to collectively below as the "AB Fund Complex", while all
of these investment companies, except the Sanford C. Bernstein Fund, Inc. and
the AB Multi-Manager Alternative Fund, are referred to collectively below as the
"AB Funds".

Board of Directors Information
------------------------------

      The Boards are comprised of the same Directors for all Funds. Certain
information concerning the Directors is set forth below.




                                                                                Portfolios in     Other Public
                                                                                AB Fund           Company
Name, Address,*                     Principal Occupation(s)                     Complex           Directorships
Age and                             During Past Five                            Overseen by       Currently Held
(Year First Elected**)              Years or Longer                             Director          by Director
----------------------              -----------------------                     -------------     ---------------

INDEPENDENT DIRECTORS
                                                                                         
Marshall C. Turner, Jr.,#           Private Investor since prior to             110               Xilinx, Inc.
Chairman of the Board               2011.  Former Chairman and CEO of                             (programmable logic
74                                  Dupont Photomasks, Inc. (components                           semi-conductors)
(2005 - Value Fund, Discovery       of semi-conductor manufacturing).                             since 2007
Value, Growth and Income, Equity    He has extensive operating
Income, Global Real Estate,         leadership and venture capital
International Value, Core           investing experience, including
Opportunities, Global Risk          five interim or full-time CEO
Allocation)                         roles, and prior service as general
(2014 - Small Cap Value, All        partner of institutional venture
Market Income)                      capital partnerships.  He also has
                                    extensive non-profit board
                                    leadership experience, and
                                    currently serves on the boards of
                                    two education and science-related
                                    non-profit organizations.  He has
                                    served as a director of one AB fund
                                    since 1992, and director or trustee
                                    of multiple AB funds since 2005.
                                    He has been Chairman of the AB
                                    Funds since January 2014, and the
                                    Chairman of the Independent
                                    Directors Committees of such AB
                                    Funds since February 2014.

John H. Dobkin,#                    Independent Consultant since prior          110               None
74                                  to 2011.  Formerly, President of
(1992 - Global Risk Allocation)     Save Venice, Inc. (preservation
(1993 - Equity Income)              organization) from 2001-2002;
(1996 - Global Real Estate)         Senior Advisor from June 1999-June
(1998 - Growth and Income)          2000 and President of Historic
(1999 - Core Opportunities)         Hudson Valley (historic
(2001 - Value Fund, Discovery       preservation) from December
Value, International Value)         1989-May 1999.  Previously,
(2014 - Small Cap Value, All        Director of the National Academy of
Market Income)                      Design. He has served as a director
                                    or trustee of various AB Funds
                                    since 1992 and as Chairman of the
                                    Audit Committees of a number of
                                    such AB Funds from 2001-2008.

Michael J. Downey,#                 Private Investor since prior to             110               Asia Pacific Fund,
72                                  2011.  Formerly, managing partner                             Inc. (registered
(2005 - Value Fund, Discovery       of Lexington Capital, LLC                                     investment company)
Value, Growth and Income, Equity    (investment advisory firm) from                               since prior to 2011
Income, Global Real Estate,         December 1997 until December 2003.
International Value, Core           He served as a Director of The
Opportunities, Global Risk          Merger Fund (registered investment
Allocation)                         company) from prior to 2011 until
(2014 - Small Cap Value, All        2013.  He also served as Director
Market Income)                      of Prospect Acquisition Corp.
                                    (financial services) from 2007
                                    until 2009.  From 1987 until 1993,
                                    Chairman and CEO of Prudential
                                    Mutual Fund Management, director of
                                    the Prudential mutual funds, and
                                    member of the Executive Committee
                                    of Prudential Securities Inc.  He
                                    has served as a director or trustee
                                    of the AB Funds since 2005 and is a
                                    director and Chairman of one other
                                    registered investment company.

William H. Foulk, Jr.,#             Investment Adviser and an                   110               None
83                                  Independent Consultant since prior
(1992 - Global Risk Allocation)     to 2011.  Previously, he was Senior
(1993 - Equity Income)              Manager of Barrett Associates,
(1996 - Global Real Estate)         Inc., a registered investment
(1998 - Growth and Income)          adviser.  He was formerly Deputy
(1999 - Core Opportunities)         Comptroller and Chief Investment
(2001 - Value Fund, Discovery       Officer of the State of New York
Fund, International Value)          and, prior thereto, Chief
(2014 - Small Cap Value, All        Investment Officer of the New York
Market Income)                      Bank for Savings. He has served as a
                                    director or trustee of various AB
                                    Funds since 1983 and was Chairman
                                    of the Independent Directors
                                    Committees of the AB Funds from
                                    2003 until early February 2014.  He
                                    served as Chairman of such AB Funds
                                    from 2003 through December 2013. He
                                    is also active in a number of
                                    mutual fund related organizations
                                    and committees.

D. James Guzy,#                     Chairman of the Board of SRC                110               None
79                                  Computers, Inc. (semi-conductors),
(2005 - Value Fund, Discovery       with which he has been associated
Value, Growth and Income, Equity    since prior to 2011.  He served as
Income, Global Real Estate,         Chairman of the Board of PLX
International Value, Core           Technology (semi-conductors) since
Opportunities, Global Risk          prior to 2011 until November 2013.
Allocation)                         He was a Director of Cirrus Logic
(2014 - Small Cap Value, All        Corporation (semi-conductors) from
Market Income)                      1984 until July 2011. He was a
                                    director of Intel Corporation
                                    (semi-conductors) from 1969 until
                                    2008, and served as Chairman of the
                                    Finance Committee of such company
                                    for several years until May 2008.
                                    He has served as a director or
                                    trustee of one or more of the AB
                                    Funds since 1982.

Nancy P. Jacklin,#                  Professorial Lecturer at the Johns          110               None
67                                  Hopkins School of Advanced
(2006 - Value Fund, Discovery       International Studies (2008-2015).
Value, Growth and Income, Equity    U.S. Executive Director of the
Income, Global Real Estate,         International Monetary Fund (which
International Value, Core           is responsible for ensuring the
Opportunities, Global Risk          stability of the international
Allocation)                         monetary system), (December
(2014 - Small Cap Value, All        2002-May 2006); Partner, Clifford
Market Income)                      Chance (1992-2002); Sector Counsel,
                                    International Banking and Finance,
                                    and Associate General Counsel,
                                    Citicorp (1985-1992); Assistant
                                    General Counsel (International),
                                    Federal Reserve Board of Governors
                                    (1982-1985); and Attorney Advisor,
                                    U.S. Department of the Treasury
                                    (1973-1982).  Member of the Bar of
                                    the District of Columbia and of New
                                    York; and member of the Council on
                                    Foreign Relations. She has served as
                                    a director or trustee of the AB
                                    Funds since 2006 and has been
                                    Chairman of the Governance and
                                    Nominating Committees of the AB
                                    Funds since August 2014.

Garry L. Moody,#                    Independent Consultant. Formerly,           110               None
63                                  Partner, Deloitte & Touche LLP,
(2008 - Value Fund, Discovery       (1995-2008) where he held a number
Value, Growth and Income, Equity    of senior positions, including Vice
Income, Global Real Estate,         Chairman, and U.S. and Global
International Value, Core           Investment Management Practice
Opportunities, Global Risk          Managing Partner; President,
Allocation)                         Fidelity Accounting and Custody
(2014 - Small Cap Value, All        Services Company (1993-1995); and
Market Income)                      Partner, Ernst & Young LLP
                                    (1975-1993), where he served as the
                                    National Director of Mutual Fund
                                    Tax Services and Managing Partner
                                    of its Chicago Office Tax
                                    department.  He is a member of the
                                    Trustee Advisory Board of BoardIQ,
                                    a biweekly publication focused on
                                    issues and news affecting directors
                                    of mutual funds.  He has served as
                                    a director or trustee, and as
                                    Chairman of the Audit Committees of
                                    the AB Funds since 2008.

Earl D. Weiner,#                    Of Counsel, and Partner prior to            110               None
76                                  January 2007, of the law firm
(2007 - Value Fund, Discovery       Sullivan & Cromwell LLP and is a
Value, Growth and Income, Equity    former member of the ABA Federal
Income, Global Real Estate,         Regulation of Securities Committee
International Value, Core           Task Force to draft editions of the
Opportunities, Global Risk          Fund Director's Guidebook.  He also
Allocation)                         serves as a director or trustee of
(2014 - Small Cap Value, All        various non-profit organizations
Market Income)                      and has served as Chairman or Vice
                                    Chairman of a number of them.  He
                                    has served as a director or trustee
                                    of the AB Funds since 2007 and
                                    served as Chairman of the
                                    Governance and Nominating
                                    Committees of the AB Funds from
                                    2007 until August 2014.

INTERESTED DIRECTOR

Robert M. Keith,+                   Senior Vice President of the                110               None
55                                  Adviser++ and the head of
1345 Avenue of the Americas         AllianceBernstein Investments, Inc.
New York, NY 10105                  ("ABI")++ since July 2008; Director
(2010 - Value Fund, Discovery       of ABI and President of the AB
Value, Growth and Income, Equity    Mutual Funds. Previously, he served
Income, Global Real Estate,         as Executive Managing Director of
International Value, Core           ABI from December 2006 to June
Opportunities, Global Risk          2008.  Prior to joining ABI in
Allocation)                         2006, Executive Managing Director
(2014 - Small Cap Value, All        of Bernstein Global Wealth
Market Income)                      Management, and prior thereto,
                                    Senior Managing Director and Global
                                    Head of Client Service and Sales of
                                    the Adviser's institutional
                                    investment management business
                                    since 2004.  Prior thereto, he was
                                    Managing Director and Head of North
                                    American Client Service and Sales
                                    in the Adviser's institutional
                                    investment management business with
                                    which he had been associated since
                                    prior to 2004.

----------------------
*     The address for each of the Funds' Independent Directors is c/o
      AllianceBernstein L.P., Attention: Philip L. Kirstein, 1345 Avenue of the
      Americas, New York, NY 10105.

**    There is no stated term of office for the Directors.

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

+     Mr. Keith is an "interested person", as defined in Section 2(a)(19) of the
      Investment Company Act of 1940, of the Funds due to his position as a
      Senior Vice President of the Adviser.

++    The Adviser and ABI are affiliates of the Funds.

      In addition to the public company directorships currently held by the
Directors set forth in the table above, Mr. Turner was a director of SunEdison,
Inc. (solar materials and power plants) since prior to 2011 until July 2014, and
Mr. Moody was a director of Greenbacker Renewable Energy Company LLC (renewable
energy and energy efficiency projects) from August 2013 until January 2014.

      The business and affairs of each Fund are overseen by the Boards.
Directors who are not "interested persons" of the Fund, as defined in the 1940
Act, are referred to as "Independent Directors", and Directors who are
"interested persons" of the Fund are referred to as "Interested Directors".
Certain information concerning the Fund's governance structure and each Director
is set forth below.

      Experience, Skills, Attributes and Qualifications of the Funds' Directors.
The Governance and Nominating Committee of the Boards, which is composed of
Independent Directors, reviews the experience, qualifications, attributes and
skills of potential candidates for nomination or election by the Boards, and
conducts a similar review in connection with the proposed nomination of current
Directors for re-election by shareholders at any annual or special meeting of
shareholders. In evaluating a candidate for nomination or election as a
Director, the Governance and Nominating Committee takes into account the
contribution that the candidate would be expected to make to the diverse mix of
experience, qualifications, attributes and skills that the Governance and
Nominating Committee believes contributes to good governance for the Funds.
Additional information concerning the Governance and Nominating Committee's
consideration of nominees appears in the description of the Committee below.

      The Boards believe that, collectively, the Directors have balanced and
diverse experience, qualifications, attributes and skills, which allow the
Boards to operate effectively in governing the Fund and protecting the interests
of shareholders. The Boards have concluded that, based on each Director's
experience, qualifications, attributes or skills on an individual basis and in
combination with those of the other Directors, each Director is qualified and
should continue to serve as such.

      In determining that a particular Director was and continues to be
qualified to serve as a Director, the Boards have considered a variety of
criteria, none of which, in isolation, was controlling. In addition, the Boards
have taken into account the actual service and commitment of each Director
during his or her tenure (including the Director's commitment and participation
in Board and committee meetings, as well as his or her current and prior
leadership of standing and ad hoc committees) in concluding that each should
continue to serve. Additional information about the specific experience, skills,
attributes and qualifications of each Director, which in each case led to the
Boards' conclusion that the Director should serve (or continue to serve) as a
Director, is provided in the table above and in the next paragraph.

      Among other attributes and qualifications common to all Directors are
their ability to review critically, evaluate, question and discuss information
provided to them (including information requested by the Directors), to interact
effectively with the Adviser, other service providers, counsel and the Funds'
independent registered public accounting firm, and to exercise effective
business judgment in the performance of their duties as Directors. In addition
to his or her service as a Director of the Fund and other AB Funds as noted in
the table above: Mr. Dobkin has experience as an executive of a number of
organizations and served as Chairman of the Audit Committee of many of the AB
Funds from 2001 to 2008; Mr. Downey has experience in the investment advisory
business including as Chairman and Chief Executive Officer of a large fund
complex and as director of a number of non-AB funds and as Chairman of a non-AB
closed-end fund; Mr. Foulk has experience in the investment advisory and
securities businesses, including as Deputy Comptroller and Chief Investment
Officer of the State of New York (where his responsibilities included bond
issuances, cash management and oversight of the New York Common Retirement
Fund), served as Chairman of the Independent Directors Committees from 2003
until early February 2014, served as Chairman of the AB Funds from 2003 through
December 2013, and is active in a number of mutual fund related organizations
and committees; Mr. Guzy has experience as a corporate director including as
Chairman of a public company and Chairman of the Finance Committee of a large
public technology company; Ms. Jacklin has experience as a financial services
regulator, as U.S. Executive Director of the International Monetary Fund (which
is responsible for ensuring the stability of the international monetary system),
as a financial services lawyer in private practice, and has served as Chairman
of the Governance and Nominating Committees of the AB Funds since August 2014;
Mr. Keith has experience as an executive of the Adviser with responsibility for,
among other things, the AB Funds; Mr. Moody has experience as a certified public
accountant including experience as Vice Chairman and U.S. and Global Investment
Management Practice Partner for a major accounting firm, is a member of both the
governing council of an organization of independent directors of mutual funds
and the Trustee Advisory Board of BoardIQ, a biweekly publication focused on
issues and news affecting directors of mutual funds, and has served as a
director or trustee and Chairman of the Audit Committees of the AB Funds since
2008; Mr. Turner has experience as a director (including as Chairman and Chief
Executive Officer of a number of companies) and as a venture capital investor
including prior service as general partner of three institutional venture
capital partnerships, and has served as Chairman of the AB Funds since January
2014 and Chairman of the Independent Directors Committees of such Funds since
February 2014; and Mr. Weiner has experience as a securities lawyer whose
practice includes registered investment companies and as director or trustee of
various non-profit organizations and Chairman or Vice Chairman of a number of
them, and served as Chairman of the Governance and Nominating Committees of the
AB Funds from 2007 until August 2014. The disclosure herein of a director's
experience, qualifications, attributes and skills does not impose on such
director any duties, obligations, or liability that are greater than the duties,
obligations and liability imposed on such director as a member of the Boards and
any committee thereof in the absence of such experience, qualifications,
attributes and skills.

      Board Structure and Oversight Function. The Boards are responsible for
oversight of the Funds. The Funds have engaged the Adviser to manage the Funds
on a day-to-day basis. The Boards are responsible for overseeing the Adviser and
the Funds' other service providers in the operations of the Funds in accordance
with each Fund's investment objective and policies and otherwise in accordance
with its prospectus, the requirements of the 1940 Act and other applicable
Federal, state and other securities and other laws, and the Funds' charter and
bylaws. The Boards typically meet in-person at regularly scheduled meetings
eight times throughout the year. In addition, the Directors may meet in-person
or by telephone at special meetings or on an informal basis at other times. The
Independent Directors also regularly meet without the presence of any
representatives of management. As described below, the Boards have established
three standing committees - the Audit, Governance and Nominating, and
Independent Directors Committees - and may establish ad hoc committees or
working groups from time to time, to assist the Boards in fulfilling their
oversight responsibilities. Each committee is composed exclusively of
Independent Directors. The responsibilities of each committee, including its
oversight responsibilities, are described further below. The Independent
Directors have also engaged independent legal counsel, and may, from time to
time, engage consultants and other advisors, to assist them in performing their
oversight responsibilities.

      An Independent Director serves as Chairman of each Board. The Chairman's
duties include setting the agenda for each Board meeting in consultation with
management, presiding at each Board meeting, meeting with management between
Board meetings, and facilitating communication and coordination between the
Independent Directors and management. The Directors have determined that the
Boards' leadership by an Independent Director and its committees composed
exclusively of Independent Directors is appropriate because they believe it sets
the proper tone to the relationships between the Funds, on the one hand, and the
Adviser and other service providers, on the other, and facilitates the exercise
of the Boards' independent judgment in evaluating and managing the
relationships. In addition, the Boards are required to have an Independent
Director as Chairman pursuant to certain 2003 regulatory settlements involving
the Adviser.

      Risk Oversight. The Funds are subject to a number of risks, including
investment, compliance and operational risks, including cyber risks. Day-to-day
risk management with respect to the Funds resides with the Adviser or other
service providers (depending on the nature of the risk), subject to supervision
by the Adviser. The Boards have charged the Adviser and its affiliates with (i)
identifying events or circumstances, the occurrence of which could have
demonstrable and material adverse effects on the Funds; (ii) to the extent
appropriate, reasonable or practicable, implementing processes and controls
reasonably designed to lessen the possibility that such events or circumstances
occur or to mitigate the effects of such events or circumstances if they do
occur; and (iii) creating and maintaining a system designed to evaluate
continuously, and to revise as appropriate, the processes and controls described
in (i) and (ii) above.

      Risk oversight forms part of the Boards' general oversight of the Funds'
investment program and operations and is addressed as part of various regular
Board and committee activities. The Funds' investment management and business
affairs are carried out by or through the Adviser and other service providers.
Each of these persons has an independent interest in risk management but the
policies and the methods by which one or more risk management functions are
carried out may differ from the Funds' and each other's in the setting of
priorities, the resources available or the effectiveness of relevant controls.
Oversight of risk management is provided by the Boards and the Audit Committees.
The Directors regularly receive reports from, among others, management
(including the Chief Risk Officer and the Global Heads of Investment Risk and
Trading Risk of the Adviser), each Fund's Senior Officer (who is also the Fund's
Independent Compliance Officer), each Fund's Chief Compliance Officer, the
Fund's independent registered public accounting firm and counsel, the Adviser's
Chief Compliance Officer and internal auditors for the Adviser, as appropriate,
regarding risks faced by the Funds and the Adviser's risk management programs.
In addition, the Directors receive regular updates on cyber security matters
from the Adviser.

      Not all risks that may affect the Funds can be identified, nor can
controls be developed to eliminate or mitigate their occurrence or effects. It
may not be practical or cost-effective to eliminate or mitigate certain risks,
the processes and controls employed to address certain risks may be limited in
their effectiveness, and some risks are simply beyond the reasonable control of
the Funds or the Adviser, its affiliates or other service providers. Moreover,
it is necessary to bear certain risks (such as investment-related risks) to
achieve each Fund's goals. As a result of the foregoing and other factors, the
Funds' ability to manage risk is subject to substantial limitations.

      Board Committees. The Boards have three standing committees - an Audit
Committee, a Governance and Nominating Committee and an Independent Directors
Committee. The members of the Audit, Governance and Nominating, and Independent
Directors Committees are identified above.

      The function of the Audit Committee is to assist the Boards in their
oversight of the Funds' accounting and financial reporting policies and
practices. The Audit Committees of the Boards met five times during each Fund's
most recently completed fiscal year or period.

      The function of the Governance and Nominating Committee includes the
nomination of persons to fill any vacancies or newly created positions on the
Boards. The Governance and Nominating Committee of the Boards met four times
during each Fund's most recently completed fiscal year or period.

      The Boards have adopted a charter for their Governance and Nominating
Committee. Pursuant to the charter, the Committee assists the Boards in carrying
out their responsibilities with respect to governance of a Fund and identifies,
evaluates and selects and nominates candidates for that Board. The Committee may
also set standards or qualifications for Directors and reviews at least annually
the performance of each Director, taking into account factors such as attendance
at meetings, adherence to Board policies, preparation for and participation at
meetings, commitment and contribution to the overall work of the Board and its
committees, and whether there are health or other reasons that might affect the
Director's ability to perform his or her duties. The Committee may consider
candidates as Directors submitted by a Fund's current Board members, officers,
the Adviser, shareholders and other appropriate sources.

      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 a Fund's common
stock or shares of beneficial interest for at least two years prior to 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 Funds not less than 120 days before the
date of the proxy statement for the previous year's annual meeting of
shareholders. If the Funds 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 Funds begin to print and mail their 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 Boards 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 a 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 Funds (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 Funds 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 Funds; (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 Funds' 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 Boards. 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 Funds, and the candidate's ability to
qualify as an Independent Director or Director. When assessing a candidate for
nomination, the Committee considers whether the individual's background, skills,
and experience will complement the background, skills and experience of other
nominees and will contribute to the diversity of the Board.

      The function of the Independent Directors Committee is to consider and
take action on matters that the Boards or Committee believes should be addressed
in an executive session of the Independent Directors, such as review and
approval of the Advisory and Distribution Services Agreements. The Independent
Directors Committee of the Boards met seven times during each Fund's most
recently completed fiscal year or period.

      The dollar range of each Fund's securities owned by each Director and the
aggregate dollar range of securities of funds in the AB Fund Complex owned by
each Director are set forth below.

                                             DOLLAR RANGE        DOLLAR RANGE
                        DOLLAR RANGE         OF EQUITY           OF EQUITY
                        OF EQUITY            SECURITIES IN       SECURITIES IN
                        SECURITIES IN        DISCOVERY           INTERNATIONAL
                        VALUE FUND AS        VALUE AS OF         VALUE AS OF
                      OF DECEMBER 31, 2015  DECEMBER 31, 2015  DECEMBER 31, 2015
                      --------------------  -----------------  -----------------

John H. Dobkin                None               None                None
Michael J. Downey             None               None          $10,001-$50,000
William H. Foulk, Jr.   $10,001-$50,000     $10,001-$50,000       $1-$10,000
D. James Guzy                 None               None                None
Nancy P. Jacklin              None               None                None
Robert M. Keith               None               None                None
Garry L. Moody                None          $10,001-$50,000          None
Marshall C. Turner, Jr.       None         $50,001-$100,000          None
Earl D. Weiner          $10,001-$50,000     $10,001-$50,000          None


                                            DOLLAR RANGE       DOLLAR RANGE
                         DOLLAR RANGE       OF EQUITY          OF EQUITY
                         OF EQUITY          SECURITIES IN      SECURITIES IN
                         SECURITIES IN      CORE               GLOBAL RISK
                         GROWTH AND         OPPORTUNITIES      ALLOCATION
                         INCOME AS OF       AS OF              AS OF
                         DECEMBER 31, 2015  DECEMBER 31, 2015  DECEMBER 31, 2015
                         -----------------  -----------------  -----------------

John H. Dobkin           $10,001-$50,000          None               None
Michael J. Downey              None         $50,001-$100,000         None
William H. Foulk, Jr.          None               None               None
D. James Guzy                  None               None               None
Nancy P. Jacklin         $10,001-$50,000          None               None
Robert M. Keith                None               None               None
Garry L. Moody                 None               None               None
Marshall C. Turner, Jr.        None         $50,001-$100,000         None
Earl D. Weiner                 None               None               None


                         DOLLAR RANGE       DOLLAR RANGE       DOLLAR RANGE
                         OF EQUITY          OF EQUITY          OF EQUITY
                         SECURITIES IN      SECURITIES IN      SECURITIES IN
                         EQUITY INCOME      GLOBAL REAL        SMALL CAP
                         AS OF              ESTATE AS OF       VALUE AS OF
                         DECEMBER 31, 2015  DECEMBER 31, 2015  DECEMBER 31, 2015
                         -----------------  -----------------  -----------------

John H. Dobkin                  None               None            None
Michael J. Downey               None               None            None
William H. Foulk, Jr.           None               None            None
D. James Guzy                   None               None            None
Nancy P. Jacklin          $10,001-$50,000          None            None
Robert M. Keith                 None               None            None
Garry L. Moody            $50,001-$100,000   $10,001-$50,000       None
Marshall C. Turner, Jr.         None               None            None
Earl D. Weiner                  None               None            None

                                                         AGGREGATE
                                DOLLAR RANGE             DOLLAR RANGE
                                OF EQUITY                OF EQUITY
                                SECURITIES IN            SECURITIES IN
                                ALL MARKET               THE AB FUND
                                INCOME AS OF             COMPLEX AS OF
                                DECEMBER 31, 2015        DECEMBER 31, 2015
                                -----------------        -----------------

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                    Over $100,000
Nancy P. Jacklin                 None                    Over $100,000
Robert M. Keith                  None                         None
Garry L. Moody                   None                    Over $100,000
Marshall C. Turner, Jr.          None                    Over $100,000
Earl D. Weiner                   None                    Over $100,000

Officer Information
-------------------

Certain information concerning each Fund's officers is set forth below.



NAME, ADDRESS,*                        POSITION(S) HELD                  PRINCIPAL OCCUPATION
AND AGE                                WITH FUND                         DURING PAST 5 YEARS
---------------                        -----------------                 ---------------------


All Funds
---------

                                                                   
Robert M. Keith,                       President and Chief Executive     See biography above.
55                                     Officer

Philip L. Kirstein,                    Senior Vice President and         Senior Vice President and Independent
70                                     Independent Compliance Officer    Compliance Officer of the funds in the
                                                                         AB Fund Complex, with which he has been
                                                                         associated since 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 March 2003.

Emilie D. Wrapp,                       Secretary                         Senior Vice President, Assistant
60                                                                       General Counsel and Assistant Secretary
                                                                         of ABI**, with which she has been
                                                                         associated since prior to 2011.

Joseph J. Mantineo,                    Treasurer and Chief Financial     Senior Vice President of ABIS**, with
56                                     Officer                           which he has been associated since
                                                                         prior to 2011.

Phyllis J. Clarke,                     Controller                        Vice President of ABIS**, with which
55                                                                       she has been associated since prior to
                                                                         2011.

Vincent S. Noto,                       Chief Compliance Officer          Senior Vice President since 2015 and
51                                                                       Mutual Fund Chief Compliance Officer of
                                                                         the Adviser** since 2014.  Prior
                                                                         thereto, he was Vice President and
                                                                         Director of Mutual Fund Compliance of
                                                                         the Adviser since prior to 2011.

Equity Income &
Value Fund
----------------

Joseph G. Paul,                        Senior Vice President             Senior Vice President of the Adviser**,
56                                                                       with which he has been associated since
                                                                         prior to 2011.

Gregory L. Powell,                     Vice President                    Senior Vice President of the Adviser**,
57                                                                       with which he has been associated since
                                                                         prior to 2011.

Discovery Value
---------------

James W. MacGregor,                    Vice President                    Senior Vice President of the Adviser**,
48                                                                       with which he has been associated since
                                                                         prior to 2011.

Joseph G. Paul,                        Senior Vice President             See biography above.
56

Shri Singhvi,                          Vice President                    Senior Vice President of the Adviser**,
42                                                                       with which he has been associated since
                                                                         prior to 2011.

International Value
-------------------

Takeo Aso,                             Vice President                    Senior Vice President of the Adviser**,
51                                                                       with which he has been associated since
                                                                         prior to 2011.

Avi Lavi,                              Vice President                    Senior Vice President of the Adviser**,
49                                                                       with which he has been associated since
                                                                         prior to 2011.

Kevin F. Simms,                        Senior Vice President             Senior Vice President of the Adviser**,
49                                                                       with which he has been associated since
                                                                         prior to 2011.

Growth and Income &
Core Opportunities
-------------------

Frank V. Caruso,                       Senior Vice President             Senior Vice President of the Adviser**,
59                                                                       with which he has been associated since
                                                                         prior to 2011.

Global Risk Allocation
----------------------

Leon Zhu,                              Vice President                    Senior Vice President of the Adviser**,
48                                                                       with which he has been associated since
                                                                         prior to 2011.

Global Real Estate
------------------

Eric J. Franco,                        Vice President                    Senior Vice President of the Adviser**,
55                                                                       with which he has been associated since
                                                                         prior to 2011.

Small Cap Value
---------------

James W. MacGregor,                    Vice President                    See biography above.
48

Joseph G. Paul,                        Senior Vice President             See biography above.
56

Shri Singhvi,                          Vice President                    See biography above.
42

All Market Income
-----------------

Morgan C. Harting,                     Vice President                    Senior Vice President of the Adviser**,
44                                                                       with which he has been associated since
                                                                         prior to 2011.

Daniel J. Loewy,                       Vice President                    Senior Vice President of the Adviser**,
41                                                                       with which he has been associated since
                                                                         prior to 2011.

Vadim Zlotnikov,                       Vice President                    Senior Vice President, Chief Market
53                                                                       Strategist of the Adviser**, with which
                                                                         he has been associated since prior to
                                                                         2011.

--------
*     The address for each of the Fund's Officers is 1345 Avenue of the
      Americas, New York, NY 10105.
**    The Adviser, ABI and ABIS are affiliates of each Fund.

      The Funds do not pay any fees to, or reimburse expenses of, their
Directors who are considered an "interested person" (as defined in Section
2(a)(19) of the 1940 Act) of the Funds. The aggregate compensation paid to the
Directors by each Fund for the fiscal year or period ended October 31, 2015 or
November 30, 2015, as applicable, the aggregate compensation paid to each of the
Directors during calendar year 2015 by the AB Fund Complex, and the total number
of registered investment companies (and separate investment portfolios within
those companies) in the AB Fund Complex with respect to which each of the
Directors or Trustees serves as a director or trustee are set forth below.
Neither the Funds nor any other registered investment company in the AB 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 AB Fund Complex.





                               Aggregate           Aggregate          Aggregate            Aggregate
                               Compensation        Compensation       Compensation         Compensation
                               from Value          from Discovery     from International   from Growth and
Name of Director               Fund                Value              Value                Value
----------------               ------------        --------------     ------------------   ---------------
                                                                                  
John H. Dobkin                 $ 2,386            $ 2,386            $ 2,386                 $ 3,434
Michael J. Downey              $ 2,386            $ 2,386            $ 2,386                 $ 3,434
William H. Foulk, Jr.          $ 2,386            $ 2,386            $ 2,386                 $ 3,434
D. James Guzy                  $ 2,386            $ 2,386            $ 2,386                 $ 3,434
Nancy P. Jacklin               $ 2,537            $ 2,537            $ 2,537                 $ 3,660
Robert M. Keith                $     0            $     0            $     0                 $     0
Garry L. Moody                 $ 2,679            $ 2,677            $ 2,679                 $ 3,874
Marshall C. Turner, Jr.        $ 4,018            $ 4,018            $ 4,018                 $ 5,882
Earl D. Weiner                 $ 2,386            $ 2,386            $ 2,386                 $ 3,434







                               Aggregate           Aggregate          Aggregate            Aggregate
                               Compensation        Compensation       Compensation         Compensation
                               from Core           from Global Risk   from Equity          from Global Real
Name of Director               Opportunities       Allocation         Income               Estate
----------------               --------------      --------------     ------------------   ---------------
                                                                               
John H. Dobkin                 $ 2,386              $ 2,386           $ 2,386              $ 2,386
Michael J. Downey              $ 2,386              $ 2,386           $ 2,386              $ 2,386
William H. Foulk, Jr.          $ 2,386              $ 2,386           $ 2,386              $ 2,386
D. James Guzy                  $ 2,386              $ 2,386           $ 2,386              $ 2,386
Nancy P. Jacklin               $ 2,536              $ 2,536           $ 2,536              $ 2,537
Robert M. Keith                $     0              $     0           $     0              $     0
Garry L. Moody                 $ 2,679              $ 2,679           $ 2,679              $ 2,679
Marshall C. Turner, Jr.        $ 4,018              $ 4,018           $ 4,018              $ 4,019
Earl D. Weiner                 $ 2,386              $ 2,386           $ 2,386              $ 2,386




                               Aggregate            Aggregate
                               Compensation         Compensation
                               from Small Cap       from All Market
Name of Director               Value                Income
----------------               --------------       ----------------

John H. Dobkin                 $ 2,386              $ 2,386
Michael J. Downey              $ 2,386              $ 2,386
William H. Foulk, Jr.          $ 2,386              $ 2,386
D. James Guzy                  $ 2,386              $ 2,386
Nancy P. Jacklin               $ 2,537              $ 2,537
Robert M. Keith                $     0              $     0
Garry L. Moody                 $ 2,679              $ 2,679
Marshall C. Turner, Jr.        $ 4,019              $ 4,019
Earl D. Weiner                 $ 2,386              $ 2,386





                                                   Total Number
                                                   of Investment                Total Number of
                             Total Compensation    Companies in the AB          Investment Portfolios
                             from the              Fund Complex, Including      within the AB Fund Complex,
                             AB Fund Complex,      the Funds, as to which       Including the Funds, as
                             Including             the Director is a            to which the Director is
Name of Director             the Funds             Director or Trustee          a Director or Trustee
----------------             ------------------    ---------------------------  -----------------------------
                                                                             
John H. Dobkin               $285,000                    29                           110
Michael J. Downey            $285,000                    29                           110
William H. Foulk, Jr.        $285,000                    29                           110
D. James Guzy                $285,000                    29                           110
Nancy P. Jacklin             $303,000                    29                           110
Robert M. Keith              $      0                    29                           110
Garry L. Moody               $320,000                    29                           110
Marshall C. Turner, Jr.      $480,000                    29                           110
Earl D. Weiner               $285,000                    29                           110


      As of February 12, 2016, the Directors and officers of each Fund as a
group owned less than 1% of the shares of the Fund.

Additional Information About the Funds' Portfolio Managers
----------------------------------------------------------

      Value Fund. The management of, and investment decisions for, the Fund's
portfolio are made by the Adviser's U.S. Value Senior Investment Management
Team. Mr. Joseph G. Paul and Mr. Gregory L. Powell are the investment
professionals(2) 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 Funds - Portfolio
Managers" in the Fund's Prospectus.

--------
(2)   Investment professionals at the Adviser include portfolio managers and
      research analysts. Investment professionals are part of investment groups
      (or teams) that service individual fund portfolios. The number of
      investment professionals assigned to a particular fund will vary from fund
      to fund.

      The dollar ranges of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of November 30, 2015 are set
forth below:

                                              DOLLAR RANGES OF EQUITY
                                              SECURITIES IN THE FUND(3)
                                              -----------------------

           Joseph G. Paul                               None
           Gregory L. Powell                            None

--------
(3)   The ranges presented above include vested shares awarded under the
      Adviser's Partners Compensation Plan (the "Plan").

      As of November 30, 2015, employees of the Adviser had approximately
$3,205,586 invested in shares of the Fund and approximately $69,936,161 in
shares of all AB Mutual Funds (excluding AB money market funds) through their
interests in certain deferred compensation plans, including 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 the
Fund's fiscal year ended November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                           (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Joseph G. Paul            43         $14,236,000,000      None          None
Gregory L. Powell         14         $ 2,521,000,000      None          None


--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Joseph G. Paul          100         $22,715,000,000         1       $185,000,000
Gregory L. Powell        10         $   269,000,000        None          None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number of      Total Assets
                                                    Other          of Other
                   Total Number    Total Assets of  Accounts       Accounts
                   Other           Other            Managed with   Managed with
                   Accounts        Accounts         Performance-   Performance-
Portfolio Manager  Managed         Managed          based Fees     based fees
-----------------  -------------   ---------------  ------------   -------------

Joseph G. Paul        28,896       $35,013,000,000    None          None
Gregory L. Powell      4,370       $ 3,477,000,000    None          None

      DISCOVERY VALUE. The management of, and investment decisions for, the
Fund's portfolio are made by the Adviser's Discovery Value Senior Investment
Management Team. Mr. James W. MacGregor, Mr. Joseph G. Paul, and Mr. Shri
Singhvi are the investment professionals 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 Funds - 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 November 30, 2015 are set
forth below:

                                              DOLLAR RANGES OF EQUITY
                                              SECURITIES IN THE FUND
                                              -----------------------
              James W. MacGregor                $500,001 $1,000,000
              Joseph G. Paul                      $10,001-$50,000
              Shri Singhvi                             None

      As of November 30, 2015, employees of the Adviser had approximately
$2,073,148 invested in shares of the Fund and approximately $69,936,161 in
shares of all AB Mutual Funds (excluding AB money market funds) through their
interests in certain deferred compensation plans, including 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 the
Fund's fiscal year ended November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

James W. MacGregor        24         $ 2,753,000,000     None          None
Joseph G. Paul            43         $12,204,000,000     None          None
Shri Singhvi              24         $ 2,753,000,000     None          None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

James W. MacGregor       28          $   639,000,000     None          None
Joseph G. Paul          100          $22,715,000,000       1       $185,000,000
Shri Singhvi             26          $   479,000,000     None          None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number of      Total Assets
                                                    Other          of Other
                   Total Number    Total Assets of  Accounts       Accounts
                   Other           Other            Managed with   Managed with
                   Accounts        Accounts         Performance-   Performance-
Portfolio Manager  Managed         Managed          based Fees     based fees
-----------------  -------------   ---------------  ------------   -------------

James W. MacGregor         37      $ 1,537,000,000     None           None
Joseph G. Paul         28,896      $35,013,000,000     None           None
Shri Singhvi               37      $ 1,537,000,000     None           None

      INTERNATIONAL VALUE. The management of, and investment decisions for, the
Fund's portfolio are made by the Adviser's International Value Senior Investment
Management Team. Mr. Takeo Aso, Mr. Avi Lavi and Mr. Kevin F. Simms are the
investment professionals 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 Funds - 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 November 30, 2015 are set
forth below:

                                                    DOLLAR RANGES OF EQUITY
                                                     SECURITIES IN THE FUND
                                                    -----------------------

             Takeo Aso                                   $50,001-$100,000
             Avi Lavi                                          None
             Kevin F. Simms                             $100,001-$500,000

      Overall, as of November 30, 2015, employees of the Adviser had
approximately $2,047,186 invested in shares of the Fund and approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 the
Fund's fiscal year ended November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Takeo Aso                26          $ 3,984,000,000     None          None
Avi Lavi                 26          $ 3,984,000,000     None          None
Kevin F. Simms           56          $13,128,000,000     None          None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Takeo Aso               49           $ 2,254,000,000      1         $ 92,000,000
Avi Lavi                37           $ 2,652,000,000      2         $110,000,000
Kevin F. Simms         142           $26,150,000,000      4         $211,000,000

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Takeo Aso               51       $ 9,236,000,000         5       $1,750,000,000
Avi Lavi                45       $ 7,584,000,000         1       $  359,000,000
Kevin F. Simms         100       $30,190,000,000         7       $1,959,000,000

      GROWTH AND INCOME. Mr. Frank V. Caruso is the investment professional
primarily responsible 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 Funds - Portfolio Managers" in the Fund's Prospectus.

      The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio manager as of October 31, 2015 is set forth
below:

                                        DOLLAR RANGE OF EQUITY
                                        SECURITIES IN THE FUND
                                        ----------------------

                 Frank V. Caruso          $100,001-$500,000(4)

--------
(4)   Includes shares held via CollegeBoundfund, a Section 529 college savings
      plan.

      As of October 31, 2015, employees of the Adviser had approximately
$1,261,438 invested in shares of the Fund and approximately $69,860,967 in
shares of all AB Mutual Funds (excluding AB money market funds) through their
interests in certain deferred compensation plans, including 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 Mr. Caruso also has 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 the Fund's fiscal year ended
October 31, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Frank V. Caruso           38        $8,277,000,000       None            None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Frank V. Caruso         15           $2,703,000,000       None          None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Frank V. Caruso       27,902     $15,976,000,000         1          $2,000,000

      CORE OPPORTUNITIES. Mr. Frank V. Caruso is the investment professional
primarily responsible 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 Funds - Portfolio Managers" in the Fund's Prospectus.

      The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio manager as of November 30, 2015 is set
forth below:

                                         DOLLAR RANGE OF EQUITY
                                         SECURITIES IN THE FUND
                                         ----------------------

                 Frank V. Caruso           $100,001-$500,000

      As of November 30, 2015, employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 Mr. Caruso also has 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 the Fund's fiscal year ended
November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Frank V. Caruso          29          $9,815,000,000       None           None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Frank V. Caruso         16           $2,908,000,000       None           None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Frank V. Caruso       27,937     $15,812,000,000        None            None

      GLOBAL RISK ALLOCATION. The management of, and investment decisions for,
Global Risk Allocation are made by the Adviser's Quantitative Investment
Strategies Team. Mr. Leon Zhu is the investment professional 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 Funds - 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 November 30, 2015 are set
forth below:

                                           DOLLAR RANGES OF EQUITY
                                           SECURITIES IN THE FUND
                                           ----------------------

                   Leon Zhu                         None

      As of November 30, 2015, employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 November
30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Leon Zhu                   1          $545,000,000        None          None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Leon Zhu               None               None            None          None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Leon Zhu               None          None               None           None

      EQUITY INCOME. The management of, and investment decisions for, the Fund's
portfolio are made by the Adviser's U.S. Equity Senior Investment Management
Team. Mr. Joseph G. Paul and Mr. Gregory L. Powell are the investment
professionals 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 Funds - 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 November 30, 2015 are set
forth below:

                                            DOLLAR RANGES OF EQUITY
                                             SECURITIES IN THE FUND
                                             ----------------------

                 Joseph G. Paul                       None
                 Gregory L. Powell            $500,001-$1,000,000

      As of November 30, 2015, employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 the
Fund's fiscal year ended November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Joseph G. Paul             43       $13,811,000,000      None          None
Gregory L. Powell          14       $ 2,095,000,000      None          None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Joseph G. Paul          100          $22,715,000,000      1         $185,000,000
Gregory L. Powell        10          $   269,000,000     None            None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Joseph G. Paul         28,896     $35,013,000,000      None           None
Gregory L. Powell       4,370     $ 3,477,000,000      None           None

      GLOBAL REAL ESTATE. The management of, and investment decisions for, the
Fund's portfolio are made by the Adviser's Global REIT Senior Investment
Management Team. Mr. Eric J. Franco is the investment professional 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 Funds - Portfolio Managers" in the Fund's
Prospectus.

      The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio manager as of November 30, 2015 is set
forth below:

                                              DOLLAR RANGE OF EQUITY
                                              SECURITIES IN THE FUND
                                              ----------------------

                 Eric J. Franco                        None

      As of November 30, 2015, employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 Mr. Franco also has 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 the Fund's fiscal year ended
November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Eric J. Franco            27          $758,000,000       None           None

--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Eric J. Franco         36             $571,000,000       None            None

--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Eric J. Franco          8         $513,000,000          None            None

      SMALL CAP VALUE. The management of, and investment decisions for, the
Fund's portfolio are made by its Small and Mid-Cap Value Equities and US Value
Equities teams. Mr. James W. MacGregor, Mr. Joseph G. Paul and Mr. Shri Singhvi
are the investment professionals primarily responsible 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 Funds - Portfolio
Managers" in the Fund's Prospectus.

      The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio manager as of November 30, 2015 is set
forth below:

                                                  DOLLAR RANGE OF EQUITY
                                                  SECURITIES IN THE FUND
                                                  ----------------------

                 James W. MacGregor                 $100,001-$500,000
                 Joseph G. Paul                            None
                 Shri Singhvi                              None

      As of November 30, 2015 employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 the
Fund's fiscal period ended November 30, 2015.

--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

James W. MacGregor       24         $ 5,102,000,000     None           None
Joseph G. Paul           44         $14,636,000,000     None           None
Shri Singhvi             24         $ 5,102,000,000     None           None


--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

James W. MacGregor     28           $   639,000,000     None           None
Joseph G. Paul        100           $22,715,000,000      1          $185,000,000
Shri Singhvi           26           $   479,000,000     None           None


--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

James W. MacGregor         37      $ 1,537,000,000      None            None
Joseph G. Paul         28,896      $35,013,000,000      None            None
Shri Singhvi               37      $ 1,537,000,000      None            None

      ALL MARKET INCOME. The management of, and investment decisions for, the
Fund's portfolio are made by its Multi-Asset Solutions team. Mr. Morgan C.
Harting, Mr. Daniel J. Loewy and Mr. Vadim Zlotnikov are the investment
professionals primarily responsible 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 Funds - Portfolio Managers" in the Fund's
Prospectus.

      The dollar range of the Fund's equity securities owned directly or
beneficially by the Fund's portfolio managers as of November 30, 2015 is set
forth below:

                                               DOLLAR RANGE OF EQUITY
                                               SECURITIES IN THE FUND
                                               ----------------------

                 Morgan C. Harting                   $1-$10,000
                 Daniel J. Loewy                  $50,001-$100,000
                 Vadim Zlotnikov                        None

      As of November 30, 2015 employees of the Adviser had approximately
$69,936,161 in shares of all AB Mutual Funds (excluding AB money market funds)
through their interests in certain deferred compensation plans, including 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 the
Fund's fiscal period ended November 30, 2015.



--------------------------------------------------------------------------------
                        REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Registered    Registered
                      Total Number   Total Assets of  Investment    Investment
                      of Registered  Registered       Companies     Companies
                      Investment     Investment       Managed with  Managed with
                      Companies      Companies        Performance-  Performance-
Portfolio Manager     Managed        Managed          based Fees    based fees
-----------------     -------------  ---------------  ------------  ------------

Morgan C. Harting          1         $    12,000,000     None           None
Daniel J. Loewy           63         $10,922,000,000     None           None
Vadim Zlotnikov           85         $12,141,000,000     None           None


--------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
--------------------------------------------------------------------------------

                                                                    Total
                                                      Number of     Assets of
                                                      Other Pooled  Other Pooled
                    Total Number     Total Assets of  Investment    Investment
                    of Other Pooled  Other Pooled     Vehicles      Vehicles
                    Investment       Investment       Managed with  Managed with
                    Vehicles         Vehicles         Performance-  Performance-
Portfolio Manager   Managed          Managed          based Fees    based fees
-----------------   -------------    ---------------  ------------  ------------

Morgan C. Harting          3       $   447,000,000      None           None
Daniel J. Loewy          225       $21,834,000,000      None           None
Vadim Zlotnikov          208       $22,049,000,000      None           None


--------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
--------------------------------------------------------------------------------

                                                    Number         Total Assets
                      Total        Total            of Other       of Other
                      Number       Assets           Accounts       Accounts
                      of Other     of Other         Managed with   Managed with
                      Accounts     Accounts         Performance-   Performance-
Portfolio Manager     Managed      Managed          based Fees     based Fees
-----------------     -------      -------          -------------  -------------

Morgan C. Harting      None            None             None           None
Daniel J. Loewy         66        $25,666,000,000       None           None
Vadim Zlotnikov        126        $36,015,000,000        23       $8,426,000,000

Investment Professional Conflict of Interest Disclosure
-------------------------------------------------------

      As an investment adviser and fiduciary, the Adviser owes its clients and
shareholders an undivided duty of loyalty. The Adviser recognizes that conflicts
of interest are inherent in its business and accordingly has 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 AB 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. The Adviser places the interests of its
clients first and expects 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 certain Funds managed by the Adviser. The Adviser's Code
of Business Conduct and Ethics requires disclosure of all personal accounts and
maintenance of brokerage accounts with designated broker-dealers approved by the
Adviser. The Code of Business Conduct and Ethics also requires preclearance of
all securities transactions (except transactions in U.S. Treasuries and open-end
mutual funds) and imposes a 60-day 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. Investment professional compensation reflects a
broad contribution in multiple dimensions to long-term investment success for
clients of the Adviser and is generally not tied specifically to the performance
of any particular client's account, nor is it generally tied directly to the
level or change in level of assets under management.

      Allocating Investment Opportunities. The investment professionals at the
Adviser routinely are required to select and allocate investment opportunities
among accounts. The Adviser has adopted 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 policies and procedures require, among other
things, objective allocation for limited investment opportunities (e.g., on a
rotational basis), and 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 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, access to portfolio funds
or other 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 address 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.

Portfolio Manager Compensation
------------------------------

      The Adviser's compensation program for portfolio managers is designed to
align with clients' interests, emphasizing each portfolio manager's ability to
generate long-term investment success for the Adviser's clients, including the
Funds. The Adviser also strives to ensure that compensation is competitive and
effective in attracting and retaining the highest caliber employees.

      Portfolio managers receive a base salary, incentive compensation and
contributions to AllianceBernstein's 401(k) plan. Part of the annual incentive
compensation is generally paid in the form of a cash bonus, and part through an
award under the firm's Incentive Compensation Award Plan (ICAP). The ICAP awards
vest over a four-year period. Deferred awards are paid in the form of restricted
grants of the firm's Master Limited Partnership Units, and award recipients have
the ability to receive a portion of their awards in deferred cash. The amount of
contributions to the 401(k) plan is determined at the sole discretion of the
Adviser. On an annual basis, the Adviser endeavors to combine all of the
foregoing elements into a total compensation package that considers industry
compensation trends and is designed to retain its best talent.

      The incentive portion of total compensation is determined by quantitative
and qualitative factors. Quantitative factors, which are weighted more heavily,
are driven by investment performance. Qualitative factors are driven by
contributions to the investment process and client success.

      The quantitative component includes measures of absolute, relative and
risk-adjusted investment performance. Relative and risk-adjusted returns are
determined based on the benchmark in the Funds' Prospectus and versus peers over
one-, three- and five-year calendar periods, with more weight given to
longer-time periods. Peer groups are chosen by Chief Investment Officers, who
consult with the product management team to identify products most similar to
our investment style and most relevant within the asset class. Portfolio
managers of the Funds do not receive any direct compensation based upon the
investment returns of any individual client account, and compensation is not
tied directly to the level or change in level of assets under management.

      Among the qualitative components considered, the most important include
thought leadership, collaboration with other investment colleagues,
contributions to risk-adjusted returns of other portfolios in the firm, efforts
in mentoring and building a strong talent pool and being a good corporate
citizen. Other factors can play a role in determining portfolio managers'
compensation, such as the complexity of investment strategies managed, volume of
assets managed and experience.

      The Adviser emphasizes four behavioral competencies--relentlessness,
ingenuity, team orientation and accountability--that support its mission to be
the most trusted advisor to its clients. Assessments of investment professionals
are formalized in a year-end review process that includes 360-degree feedback
from other professionals from across the investment teams and the Adviser.

--------------------------------------------------------------------------------

                             EXPENSES OF THE FUNDS

--------------------------------------------------------------------------------

Distribution Services Agreement
-------------------------------

      Each 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 distribution of its Class A shares,
Class B shares, Class C shares, Class R shares and Class K shares in accordance
with a plan of distribution that is included in the Agreement and that has been
duly adopted and approved in accordance with Rule 12b-1 adopted by the SEC under
the 1940 Act (each a "Plan" and collectively, the "Plans").

      In approving the Plans, the Directors determined that there was a
reasonable likelihood that the Plan would benefit each 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 SEC 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 Plans will continue in effect with respect to each Fund and each class
of shares thereof for successive one-year periods provided that such continuance
is specifically approved at least annually by a majority of the Independent
Directors who have no direct or indirect financial interest in the operation of
the Plans or any agreement related thereto (the "Qualified Directors") and by a
vote of a majority of the entire Board at a meeting called for that purpose.
Most recently the Directors approved the continuance of the Plans for an
additional annual term at their meetings held on May 5-7, 2015.

      All material amendments to the Plans will become effective only upon
approval as provided in the preceding paragraph; and the Plans may not be
amended in order to increase materially the costs that a Fund may bear pursuant
to the Plans without the approval of a majority of the holders of the
outstanding voting shares of the Fund or the class or classes of the Fund
affected. An Agreement may be terminated (a) by a Fund without penalty at any
time by a majority vote of the holders of the Fund's outstanding voting
securities, voting separately by class, or by a majority vote of the Qualified
Directors or (b) by ABI. To terminate an Agreement, any party must give the
other parties 60 days' written notice; to terminate the Plans only, a Fund is
not required to give prior notice to ABI. The Agreements will terminate
automatically in the event of their assignment. The Plans are of a type known as
a "reimbursement plan", which means that they reimburse the distributor for the
actual costs of services rendered.

      In the event that a 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 of a Fund, (i) no distribution services fees (other
than current amounts accrued but not yet paid) would be owed by that Fund to ABI
with respect to that class and (ii) that Fund would not be obligated to pay ABI
for any amounts expended under the Plan not previously recovered by ABI from
distribution services fees in respect of shares of such class or through
deferred sales charges.

      Distribution services fees are accrued daily and paid monthly and charged
as expenses of each Fund as accrued. The distribution services fees attributable
to the Class B, Class C, Class R and Class K shares of each Fund 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 respective distribution services fee on the Class B shares and
Class C shares of each Fund and the distribution services fees on the Class R
shares and Class K shares of each Fund are the same as those of the initial
sales charge and distribution services fee with respect to the Class A shares of
each Fund in that in each case the sales charge and/or distribution services fee
provides for the financing of the distribution of the relevant class of the
relevant Fund's shares.

      With respect to Class A shares of each Fund, distribution expenses accrued
by ABI in one fiscal year may not be paid from distribution services fees
received from a Fund in subsequent fiscal years. ABI's compensation with respect
to Class B, Class C, Class R and Class K shares of each Fund under the Plan is
directly tied to the expenses incurred by ABI. Actual distribution expenses for
Class B, Class C, Class R and Class K shares of each Fund for any given year,
however, will probably exceed the distribution services fees payable under the
Plan with respect to the class involved and, in the case of Class B and Class C
shares of each Fund, payments received from CDSCs. The excess will be carried
forward by ABI and reimbursed from distribution services fees payable under the
Plan with respect to the class involved and, in the case of Class B and Class C
shares of each Fund, payments subsequently received through CDSCs, so long as
the Rule is in effect.

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income,
Global Real Estate, Small Cap Value and All Market Income, with respect to Class
A shares, the distribution services fees for expenditures payable to ABI were as
follows:

                                                              Percentage per
                                                              annum of the
                                                              aggregate average
                                                              daily net assets
                          Distribution services fees for      attributable to
Fund                      expenditures payable to ABI         Class A shares*
----                      ---------------------------         ---------------

Growth and Income                $3,586,477                      0.25%
Value Fund                       $  177,108                      0.25%
Discovery Value                  $1,817,936                      0.25%
International Value              $  481,603                      0.25%
Core Opportunities               $  329,701                      0.25%
Global Risk Allocation           $  752,115                      0.25%
Equity Income                    $1,319,437                      0.25%
Global Real Estate               $  229,200                      0.25%
Small Cap Value                  $   84,614                      0.25%
All Market Income                $       26                      0.25%

--------
      * The maximum fee allowed under the Rule 12b-1 Plans for the Class A
Shares of the Funds is 0.30% of the aggregate of average daily net assets. The
Board currently limits the payments to 0.25%.

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income,
Global Real Estate, Small Cap Value and All Market Income, expenses incurred by
each Fund and costs allocated to each Fund in connection with activities
primarily intended to result in the sale of Class A shares were as follows:




                              Growth
                                and             Value       Discovery       International           Core
Category of Expense            Income           Fund        Value              Value          Opportunities
-------------------            ------           -----      ----------      --------------     -------------
                                                                               
Advertising/                  $   34,897        $    992   $   10,154       $  3,090           $  1,859
Marketing

Printing and Mailing of       $    2,225        $    867   $   19,029       $  2,686           $  1,607
Prospectuses and
Semi-Annual and Annual
Reports to Other than
Current Shareholders

Compensation to               $3,636,947        $149,914   $1,504,549       $461,722           $291,160
Underwriters

Compensation to Dealers       $  456,105        $ 41,049   $  417,313       $127,620           $ 77,518

Compensation to Sales         $   32,245        $ 30,348   $  415,353       $101,182           $ 69,891
Personnel

Interest, Carrying or         $        0        $    193   $    1,982       $    601           $    359
Other Financing Charges

Other (Includes Personnel     $  565,546        $ 23,319   $  238,990       $ 72,566           $ 43,431
costs of those home
office employees
involved in the
distribution effort and
the travel-related
expenses incurred by the
marketing personnel
conducting seminars)

Totals                        $4,727,965        $246,682   $2,607,370       $769,467           $485,825






                              Global Risk                      Global Real
Category of Expense           Allocation      Equity Income       Estate      Small Cap Value    All Market Income
-------------------           ----------      -------------    -----------    ---------------    -----------------
                                                                                    
Advertising/                  $    4,829       $    7,356     $  1,384        $   1              $   0
Marketing

Printing and Mailing of       $    4,221       $    6,441     $  1,247        $   1              $   0
Prospectuses and
Semi-Annual and Annual
Reports to Other than
Current Shareholders

Compensation to               $  720,980       $1,128,669     $209,604        $   0              $   0
Underwriters

Compensation to Dealers       $  201,954       $  304,494     $ 58,686        $   0              $   5

Compensation to Sales         $  155,680       $  338,679     $ 98,796        $  91              $   1
Personnel

Interest, Carrying or         $      940       $    1,436     $    279        $   0              $   0
Other Financing Charges

Other (Includes Personnel     $  113,573       $  173,345     $ 33,263        $  18              $   1
costs of those home
office employees
involved in the
distribution effort and
the travel-related
expenses incurred by the
marketing personnel
conducting seminars)

Totals                        $1,202,177       $1,960,420     $403,259        $  111             $   7


      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income
and Global Real Estate, with respect to Class B shares, the distribution
services fees for expenditures payable to ABI were as follows:

                                                              Percentage per
                                                              annum of the
                                                              aggregate average
                                                              daily net assets
                          Distribution services fees for      attributable to
Fund                      expenditures payable to ABI         Class B shares
----                      ---------------------------         ---------------

Growth and Income(1)             $277,179                        1.00%
Value Fund (2)                   $ 19,022                         .30%
Discovery Value(3)               $ 87,246                         .35%
International Value(4)           $ 44,003                        1.00%
Core Opportunities(5)            $ 32,560                         .40%
Global Risk Allocation(6)        $ 84,701                        1.00%
Equity Income(7)                 $ 61,575                        1.00%
Global Real Estate(8)            $ 14,945                        1.00%

--------
(1)   $139,915 was used to offset the distribution services fees paid in prior
      years with respect to Class B for Growth and Income.

(2)   Net of $13,315, which was waived by the distributor.

(3)   Net of $56,710, which was waived by the distributor.

(4)   $23,888 was used to offset the distribution services fees paid in prior
      years with respect to Class B for International Value.

(5)   Net of $19,536, which was waived by the distributor.

(6)   $36,531 was used to offset the distribution services fees paid in prior
      years with respect to Class B for Global Risk Allocation.

(7)   $31,400 was used to offset the distribution services fees paid in prior
      years with respect to Class B for Equity Income.

(8)   $7,252 was used to offset the distribution services fees paid in prior
      years with respect to Class B for Global Real Estate.

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income
and Global Real Estate, expenses incurred by each Fund and costs allocated to
each Fund in connection with activities primarily intended to result in the sale
of Class B shares were as follows:




                                                                                                                      Global
                        Growth and    Value      Discovery     International      Core        Global Risk   Equity      Real
Category of Expense      Income       Fund       Value            Value      Opportunities    Allocation   Income     Estate
-------------------     ----------    -----     ---------     -------------  -------------    ----------   ------     ------
                                                                                               
Advertising/           $    740      $   31     $   140        $    66        $    53       $   133       $    98     $   24
Marketing

Printing and           $     46      $   28     $   268        $    65        $    48       $   124       $    91     $   22
Mailing of
Prospectuses and
Semi-Annual and
Annual Reports to
Other than Current
Shareholders

Compensation to        $113,489      $6,850     $26,257        $14,110        $10,516       $37,914       $21,588     $5,968
Underwriters

Compensation to        $  9,856      $  973     $ 4,950        $ 2,150        $ 1,285       $ 2,535       $ 3,207     $  352
Dealers

Compensation to        $    856      $  904     $ 3,917        $ 1,984        $ 1,496       $ 4,105       $ 2,748     $  733
Sales Personnel

Interest, Carrying     $      0      $    6     $    29        $    15        $    11       $    28       $    20     $    5
or Other Financing
Charges

Other (Includes        $ 12,277      $  749     $ 3,434        $ 1,726        $ 1,283       $ 3,331       $ 2,423     $  589
Personnel costs of
those home office
employees involved
in the
distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)

Totals                 $137,264      $9,541     $38,995        $20,116        $14,692       $48,170       $30,175     $7,693



      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income,
Global Real Estate, Small Cap Value and All Market Income, with respect to Class
C shares, the distribution services fees for expenditures payable to ABI were as
follows:

                                                              Percentage per
                                                              annum of the
                                                              aggregate average
                                                              daily net assets
                          Distribution services fees for      attributable to
Fund                      expenditures payable to ABI         Class C shares
----                      ---------------------------         ---------------

Growth and Income                $2,169,237                          1.00%
Value Fund                       $  171,679                          1.00%
Discovery Value                  $1,644,214                          1.00%
International Value              $  657,235                          1.00%
Core Opportunities               $  317,357                          1.00%
Global Risk Allocation           $  541,951                          1.00%
Equity Income                    $1,453,614                          1.00%
Global Real Estate               $  219,732                          1.00%
Small Cap Value                  $      262                          1.00%
All Market Income                $       96                          1.00%

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income,
Global Real Estate, Small Cap Value and All Market Income, expenses incurred by
each Fund and costs allocated to each Fund in connection with activities
primarily intended to result in the sale of Class C shares were as follows:




                             Growth and        Value                               International          Core
Category of Expense            Income          Fund        Discovery Value         Value          Opportunities
-------------------          -----------       -----       ---------------      -------------      -------------
                                                                                    
Advertising/                 $    5,915        $    287     $    2,762          $   1,103          $     535
Marketing

Printing and Mailing of      $      377        $    252     $    5,170          $     961          $     464
Prospectuses and
Semi-Annual and Annual
Reports to Other than
Current Shareholders

Compensation to              $2,219,828        $170,825     $1,576,848          $ 650,091          $ 309,500
Underwriters

Compensation to Dealers      $   77,250        $ 11,914     $  112,168          $  45,934          $  19,376

Compensation to Sales        $    5,690        $  8,238     $   91,611          $  37,422          $  18,910
Personnel

Interest, Carrying or        $        0        $     56     $      538          $     215          $     104
Other Financing Charges

Other (Includes Personnel    $   95,749        $  6,772     $   64,934          $  25,971          $  12,539
costs of those home
office employees involved
in the distribution
effort and the
travel-related expenses
incurred by the marketing
personnel conducting
seminars)

Totals                       $2,404,809        $198,344     $1,854,031          $ 761,697          $ 361,428






                             Global Risk                       Global Real                            All Market
Category of Expense           Allocation      Equity Income      Estate         Small Cap Value        Income
-------------------           ----------      -------------     ----------      ---------------       -----------
                                                                                         
Advertising/                 $    910         $    2,466       $    370         $  0                    $0
Marketing

Printing and Mailing of      $    795         $    2,125       $    323         $  0                    $0
Prospectuses and
Semi-Annual and Annual
Reports to Other than
Current Shareholders

Compensation to              $534,610         $1,457,287       $221,345         $130                    $0
Underwriters

Compensation to Dealers      $ 37,523         $   90,220       $ 14,048         $ 17                    $5

Compensation to Sales        $ 30,001         $  120,325       $ 13,722         $  7                    $0
Personnel

Interest, Carrying or        $    177         $      474       $     72         $  0                    $0
Other Financing Charges

Other (Includes Personnel    $ 21,415         $   57,467       $  8,685         $  6                    $0
costs of those home
office employees involved
in the distribution
effort and the
travel-related expenses
incurred by the marketing
personnel conducting
seminars)

Totals                       $625,431         $1,730,364       $258,565         $160                    $5



      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income
and Global Real Estate, with respect to Class R shares, the distribution
services fees for expenditures payable to ABI were as follows:

                                                              Percentage per
                                                              annum of the
                                                              aggregate average
                                                              daily net assets
                          Distribution services fees for      attributable to
Fund                      expenditures payable to ABI         Class R shares
----                      ---------------------------         ---------------

Growth and Income               $ 31,655                          .50%
Value Fund                      $  7,901                          .50%
Discovery Value                 $614,899                          .50%
International Value             $106,439                          .50%
Core Opportunities              $ 21,002                          .50%
Global Risk Allocation          $ 20,623                          .50%
Equity Income                   $ 86,300                          .50%
Global Real Estate              $ 26,236                          .50%

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for the Value Fund, Discovery
Value, International Value, Core Opportunities, Global Risk Allocation, Equity
Income and Global Real Estate, expenses incurred by each Fund and costs
allocated to each Fund in connection with activities primarily intended to
result in the sale of Class R shares were as follows:




                       Growth                                                                    Global                    Global
                        and           Value       Discovery     International       Core            Risk         Equity       Real
Category of Expense    Income         Fund        Value           Value        Opportunities    Allocation     Income      Estate
-------------------    ------         -----     ----------    --------------   -------------    ----------     ------      --------
                                                                                                   
Advertising/          $   168        $    25     $    647     $    353         $    68          $    70       $    290     $   170
Marketing

Printing and          $    10        $    23     $  1,208     $    308         $    62          $    61       $    253     $   149
Mailing of
Prospectuses and
Semi-Annual and
Annual Reports to
Other than Current
Shareholders

Compensation to       $25,500        $ 7,610     $ 73,056     $102,195         $20,556          $20,450       $ 85,982     $50,601
Underwriters

Compensation to       $ 2,251        $ 1,109     $ 27,430     $ 15,140         $ 3,012          $ 2,963       $ 12,391     $ 7,289
Dealers

Compensation to       $ 1,536        $ 1,396     $ 28,305     $ 17,307         $ 6,642          $ 3,593       $ 13,346     $ 9,868
Sales Personnel

Interest, Carrying    $     0        $     5     $    125     $     69         $    14          $    13       $     56     $    33
or Other Financing
Charges

Other (Includes       $ 2,799        $   610     $ 15,109     $  8,334         $ 1,653          $ 1,631       $  6,818     $ 4,013
Personnel costs of
those home office
employees involved
in the distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)

Totals                $32,264        $10,778     $145,880     $143,706         $32,007          $28,781       $119,136     $72,123



      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income
and Global Real Estate, with respect to Class K shares, the distribution
services fees for expenditures payable to ABI were as follows:

                                                              Percentage per
                                                              annum of the
                                                              aggregate average
                                                              daily net assets
                          Distribution services fees for      attributable to
Fund                      expenditures payable to ABI         Class K shares
----                      ---------------------------         ---------------

Growth and Income              $ 13,682                           .25%
Value Fund                     $ 29,680                           .25%
Discovery Value                $166,764                           .25%
International Value            $ 34,971                           .25%
Core Opportunities             $  9,712                           .25%
Global Risk Allocation         $  5,098                           .25%
Equity Income                  $ 15,095                           .25%
Global Real Estate             $ 28,325                           .25%

      During the fiscal year ended October 31, 2015, for Growth and Income and
during the fiscal year ended November 30, 2015, for Value Fund, Discovery Value,
International Value, Core Opportunities, Global Risk Allocation, Equity Income
and Global Real Estate, expenses incurred by each Fund and costs allocated to
each Fund in connection with activities primarily intended to result in the sale
of Class K shares were as follows:




                       Growth                                                                    Global                    Global
                        and           Value       Discovery     International       Core            Risk         Equity       Real
Category of Expense    Income         Fund        Value           Value        Opportunities    Allocation     Income      Estate
-------------------    ------         -----     ----------    --------------   -------------    ----------     ------      --------
                                                                                                   
Advertising/           $   143        $   13    $    647      $   160           $    58          $   30        $    64     $    41
Marketing

Printing and           $     8        $   12    $  1,208      $   140           $    49          $   27        $    59     $    36
Mailing of
Prospectuses and
Semi-Annual and
Annual Reports to
Other than Current
Shareholders

Compensation to        $15,336        $    0    $ 73,056      $12,629           $ 7,552          $3,991        $ 4,528     $     0
Underwriters

Compensation to        $ 1,956        $  601    $ 27,430      $ 6,826           $ 2,475          $1,304        $ 2,796     $ 1,772
Dealers

Compensation to        $   462        $  624    $ 28,305      $ 7,258           $ 7,390          $1,518        $ 3,016     $ 2,471
Sales Personnel

Interest, Carrying     $     0        $    3    $    125      $    31           $    11          $    6        $    13     $     8
or Other Financing
Charges

Other (Includes        $ 2,432        $  329    $ 15,109      $ 3,760           $ 1,365          $  718        $ 1,537     $   976
Personnel costs of
those home office
employees involved
in the distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)

Totals                 $20,337        $1,582    $145,880      $30,804           $18,900          $7,594        $12,013     $ 5,304



      Since the commencement of each Fund's operations, for Growth and Income,
Value Fund, Discovery Value, International Value, Core Opportunities, Global
Risk Allocation, Equity Income, Global Real Estate, Small Cap Value and All
Market Income, the Distributor has incurred expenses in excess of the
distribution expenses incurred and carried over for reimbursement in future
years in respect of the Class B, Class C, Class R and Class K shares of each
Fund as follows:



                       AMOUNT OF UNREIMBURSED DISTRIBUTION EXPENSES CARRIED OVER
                              (AS A PERCENTAGE OF THE CLASS' NET ASSETS)
                       ---------------------------------------------------------

                          CLASS B             CLASS C             CLASS R        CLASS K
                          -------             -------             -------        -------
                                                                       
Value Fund                $   506,402        $   935,794        $  139,918        $   81,785
                              (34.34%)            (6.01%)          (12.41%)           (0.79%)

Discovery Value           $   173,584        $ 3,203,513        $1,973,946        $  651,753
                              (2.88%)            (2.08%)           (1.85%)           (1.04%)

International Value       $ 1,519,863        $ 6,355,050        $2,253,832        $2,371,852
                             (66.41%)           (10.86%)          (11.75%)          (19.80%)

Growth and Income         $19,703,275        $11,234,604        $  208,302        $   83,891
                             (81.39%)            (5.29%)           (3.55%)           (1.59%)

Core Opportunities        $    85,769        $ 1,899,194        $  220,620        $   56,751
                              (3.03%)            (6.07%)           (6.89%)           (1.65%)

Global Risk Allocation    $   807,491        $ 3,406,052        $  405,166        $  246,832
                             (13.39%)            (6.74%)           (9.55%)          (12.73%)

Equity Income             $ 5,765,159        $ 3,033,363        $  217,341        $  154,625
                            (136.21%)            (2.12%)           (1.29%)           (2.93%)

Global Real Estate        $ 8,955,996        $ 2,305,047        $  316,722        $  146,659
                            (791.19%)           (10.85%)           (3.30%)           (1.40%)

Small Cap Value                  N/A         $         0             N/A               N/A
                                                   (0.00%)

All Market Income                N/A         $         0             N/A               N/A
                                                   (0.00%)



Transfer Agency Agreement
-------------------------

      ABIS acts as the transfer agent for each Fund. ABIS registers the
transfer, issuance and redemption of Fund shares and disburses dividends and
other distributions to Fund shareholders.

      ABIS, an indirect wholly-owned subsidiary of the Adviser, located
principally 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, Class B, Class C,
Class R, Class K, Class I and Advisor Class shares of each Fund, plus
reimbursement for out-of-pocket expenses. For the fiscal year ended October 31,
2015 for Growth and Income and for the fiscal year ended November 30, 2015 for
Value Fund, Discovery Value, International Value, Core Opportunities, Global
Risk Allocation, Equity Income, Global Real Estate, Small Cap Value and All
Market Income, the Funds paid ABIS $1,372,609, $148,890, $981,765, $302,015,
$113,284, $279,252, $288,107, $109,741, $16,532 and $7,616 respectively, for
transfer agency services.

      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,
a 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. Each Fund, ABI and/or the Adviser pay to these financial
intermediaries, including those that sell shares of the AB Mutual Funds, fees
for sub-transfer agency and related recordkeeping services in amounts ranging up
to $19 per share 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 Funds, 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 a
Fund, they are included in the Funds' Prospectus in the Fund expense tables
under "Fees and Expenses of the Fund". 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.

--------------------------------------------------------------------------------

                               PURCHASE OF SHARES

--------------------------------------------------------------------------------


      The following information supplements that set forth in your Prospectus
under the heading "Investing in the Funds".

      Effective January 31, 2009, sales of Class B shares of the Funds to new
investors were suspended. Class B shares are only issued (i) upon the exchange
of Class B shares from another AB Fund, (ii) for purposes of dividend
reinvestment, (iii) through the Fund's Automatic Investment Program for accounts
that established the Program prior to January 31, 2009, and (iv) for purchase of
additional Class B shares by Class B shareholders as of January 31, 2009. The
ability to establish a new Automatic Investment Program for accounts containing
Class B shares was suspended as of January 31, 2009.

General
-------

      Shares of each 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 respect to the Funds except Small Cap Value and All Market
Income, 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"), with respect to Discovery
Value, Growth and Income, Equity Income and Core Opportunities, to group
retirement plans, as defined below, eligible to purchase Class Z shares, without
any initial sales charge or CDSC ("Class Z 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 accounts
are held on the books of a Fund. All classes of shares of the Funds, except
Class I, Class Z and Advisor Class shares, are subject to Rule 12b-1 asset-based
sales charges. Shares of a Fund that are offered subject to a sales charge are
offered through (i) investment dealers that are members of the Financial
Industry Regulatory Authority (FINRA) 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 Funds 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 of each Fund made through such
financial intermediary. Such financial intermediaries 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 Funds, including
requirements as to the classes of shares available through that financial
intermediary and the minimum initial and subsequent investment amounts. The
Funds are not responsible for, and have no control over, the decision of any
financial intermediary to impose such differing requirements. Sales personnel of
financial intermediaries distributing the Funds' shares may receive differing
compensation for selling different classes of shares.

      In order to open your account, a 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.

Frequent Purchases and Sales of Fund Shares
-------------------------------------------

      The Boards have 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. There is no guarantee that the Funds will be able
to detect excessive or short-term trading or to identify shareholders engaged in
such practices, particularly with respect to transactions in omnibus accounts.
Shareholders should be aware that application of these policies may have adverse
consequences, as described below, and avoid frequent trading in Fund shares
through purchases, sales and exchanges of shares. 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 and cause a Fund to sell shares at
inopportune times to raise cash to accommodate redemptions relating to
short-term trading. 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. In
addition, a Fund may incur increased administrative and other expenses due to
excessive or short-term trading, including increased brokerage costs and
realization of taxable capital gains.

      Funds that may invest significantly in securities of foreign issuers may
be particularly susceptible to short-term trading strategies. This is because
securities of foreign issuers are typically traded on markets that close well
before the time a Fund ordinarily 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 securities of foreign issuers established
some time before a 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 securities of foreign issuers 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, each 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.

      A shareholder engaging in a short-term trading strategy may also target a
Fund that does not invest primarily in securities of foreign issuers. 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"). The Funds may be
adversely affected by price arbitrage.

      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
seek to prevent such practices to the extent they are detected by the procedures
described below, subject to the Funds' ability to monitor purchase, sale and
exchange activity. 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 60-day period or
            purchases of shares followed by a sale within 60 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. With respect to
            managed or discretionary accounts for which the account owner gives
            his/her broker, investment adviser or other third party authority to
            buy and sell Fund shares, the Funds may consider trades initiated by
            the account owner, such as trades initiated in connection with a
            bona fide cash management purposes, separately in their analysis.
            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.

      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 Funds will
            take remedial action that may include issuing a warning, revoking
            certain account-related privileges (such as the ability to place
            purchase, sale and exchange orders over the internet or by phone) or
            prohibiting or "blocking" future purchase or exchange activity.
            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. As a result, unless the shareholder redeems his
            or her shares, which may have consequences if the shares have
            declined in value, a CDSC is applicable or adverse tax consequences
            may result, and the shareholder may be "locked" into an unsuitable
            investment. A blocked account will generally remain blocked for 90
            days. Subsequent detections of excessive or short-term trading may
            result in an indefinite account block or an account block 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     Application 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 apply their
            surveillance procedures to these omnibus account arrangements. As
            required by SEC rules, the Funds have entered into agreements with
            all of its financial intermediaries that require the financial
            intermediaries to provide the Funds, upon the request of the Funds
            or their agents, with individual account level information about
            their transactions. If the Funds detect excessive trading through
            their monitoring of omnibus accounts, including trading at the
            individual account level, the financial intermediaries will also
            execute instructions from the Funds to take actions 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).

Purchase of 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.
If a 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 each Fund is its NAV, plus, in the
case of Class A shares of each Fund, a sales charge. On each Fund business day
on which a purchase or redemption order is received by a Fund and trading in the
types of securities in which a Fund invests might materially affect the value of
that Fund's shares, the NAV per share is computed as of the Fund Closing Time,
which is the close of regular trading on each day the Exchange is open
(ordinarily 4:00 p.m., Eastern time, but sometimes earlier, as in the case of
scheduled half-day trading or unscheduled suspensions of trading) by dividing
the value of the total assets attributable to a class, 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 each Fund are
expected to be substantially the same. However, the NAVs of the Class B, Class
C, Class R and Class Z shares of each Fund will generally be slightly lower than
the NAVs of the Class A, Class K, Class I and Advisor Class shares of each Fund,
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 Funds will accept unconditional orders for their 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
Fund Closing Time are priced at the NAV computed as of the Fund Closing Time
(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 Fund Closing Time. The financial intermediary is
responsible for transmitting such orders by a prescribed time to a Fund or its
transfer agent. If the financial intermediary fails to do so, the investor will
not receive the day's NAV. If the financial intermediary receives the order
after the Fund Closing Time, the price received by the investor will be based on
the NAV determined as of the Fund Closing Time on the next business day.

      A Fund may, at its sole option, accept securities as payment for shares of
the Fund, including from certain affiliates of the Fund in accordance with the
Fund's procedures, if the Adviser believes that the securities are appropriate
investments for the Fund. The securities are valued by the method described
under "Net Asset Value" below as of the date the Fund receives the securities
and corresponding documentation necessary to transfer the securities to the
Fund. This is a taxable transaction to the shareholder.

      Following the initial purchase of a Fund's shares, a shareholder may place
orders to purchase additional shares by telephone if the shareholder has
completed the appropriate portion of the Mutual Fund Application or an "Autobuy"
application, both of which may be 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 the
Fund Closing Time on a Fund business day to receive that day's public offering
price. Telephone purchase requests received after the Fund Closing 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 Fund
Closing Time 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 a Fund, the Funds will not issue share certificates representing
shares of a Fund. Ownership of a Fund's shares will be shown on the books of
that Fund's transfer agent.

      Each class of shares of each Fund represents an interest in the same
portfolio of investments of the relevant Fund, has the same rights and is
identical in all respects, except that (i) Class A shares of each Fund bear the
expense of the initial sales charge (or CDSC, when applicable) and Class B and
Class C shares bear the expense of the CDSC, (ii) depending on the Fund, Class B
shares, Class C shares and Class R shares typically each bear the expense of a
higher distribution services fee than that borne by Class A shares and Class K
shares of each Fund, and Class I shares, Class Z shares and Advisor Class shares
do not bear such a fee (iii) Class B shares are subject to a conversion feature
and will convert to Class A shares under certain circumstances, and (iv) each of
Class A, Class B, Class C, Class R and Class K shares of each Fund has exclusive
voting rights with respect to provisions of the 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 a Fund submits to
a vote of the Class A shareholders, an amendment to the Plan that would
materially increase the amount to be paid thereunder with respect to the Class A
shares of that Fund, then such amendment will also be submitted to the Class B
shareholders of that Fund (if applicable), because the Class B shares convert to
Class A shares under certain circumstances and the Class A and Class B
shareholders will vote separately by class. Each class has different exchange
privileges and certain different shareholder service options available.

      The Directors of the Funds have determined that currently no conflict of
interest exists between or among the classes of shares of any respective Fund.
On an ongoing basis, the Directors of the Funds, 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 of each
Fund (as applicable), 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 and Tax-Deferred Accounts" below. These
alternative purchase arrangements permit an investor to choose the method of
purchasing shares that is most beneficial given the amount of 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 a 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. 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 of a Fund are subject to a lower distribution services fee
and, accordingly, pay correspondingly higher dividends per share than Class B
shares or Class C shares of that Fund. However, because initial sales charges
are deducted at the time of purchase, most investors purchasing Class A shares
of a Fund would not have all of 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 of a Fund because the accumulated
continuing distribution charges on Class B shares or Class C shares of that Fund
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 of 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 of a Fund in order to
have all of 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 of a
Fund would have to hold his or her investment approximately seven years for the
Class C distribution services fee of that Fund 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 of a Fund.

Compensation Paid to Principal Underwriter
------------------------------------------

      During Value Fund's fiscal years ended November 30, 2015, November 30,
2014 and November 30, 2013, the aggregate amount of underwriting commission
payable with respect to shares of the Fund was $41,430, $50,959 and $34,001,
respectively. Of these amounts, ABI received $2,412, $3,107 and $1,601,
respectively, representing that portion of the sales charges paid on shares of
the Fund sold during the year which was not reallocated to selected dealers (and
was, accordingly, retained by ABI).

      During Discovery Value's fiscal years ended November 30, 2015, November
30, 2014 and November 30, 2013, the aggregate amount of underwriting commission
payable with respect to shares of the Fund was $189,485, $317,430 and $369,740,
respectively. Of these amounts, ABI received $7,201, $14,347 and $18,084,
respectively, representing that portion of the sales charges paid on shares of
the Fund sold during the year which was not reallocated to selected dealers (and
was, accordingly, retained by ABI).

      During International Value's fiscal years ended November 30, 2015,
November 30, 2014 and November 30, 2013, the aggregate amount of underwriting
commission payable with respect to shares of the Fund was $55,995, $76,894 and
$77,597, respectively. Of these amounts, ABI received $2,651, $3,617 and $3,111,
respectively, representing that portion of the sales charges paid on shares of
the Fund sold during the year which was not reallocated to selected dealers (and
was, accordingly, retained by ABI).

      During Growth and Income's fiscal years ended October 31, 2015, October
31, 2014 and October 31, 2012 the aggregate amounts of underwriting commission
payable with respect to shares of the Fund were $388,672, $564,003 and $320,363,
respectively. Of that amount, ABI received the amounts of $22,530, $34,233 and
$21,993, respectively, representing that portion of the sales charges paid on
shares of the Fund sold during the year which was not reallocated to selected
dealers (and was, accordingly, retained by ABI).

      During Core Opportunities' fiscal years ended November 30, 2015, November
30, 2014 and November 30, 2013, the aggregate amount of underwriting commission
payable with respect to shares of the Fund was $141,384, $142,623 and $168,314,
respectively. Of that amount ABI received the amount of $8,540, $8,951 and
$9,445, respectively, representing that portion of the sales charges paid on
shares of the Fund sold during the year which was not re-allowed to selected
dealers (and was, accordingly, retained by ABI).

      During Global Risk Allocation's fiscal years ended November 30, 2015,
November 30, 2014 and November 30, 2013, the aggregate amounts of underwriting
commission payable with respect to shares of the Fund were $105,621, $86,781 and
$123,190, respectively. Of that amount ABI received the amounts of $3,691,
$3,763 and $5,825, respectively, representing that portion of the sales charges
paid on shares of the Fund sold during the year which was not re-allowed to
selected dealers (and was, accordingly, retained by ABI).

      During Equity Income's fiscal years ended November 30, 2015, November 30,
2014 and November 30, 2013, the aggregate amounts of underwriting commission
payable with respect to shares of the Fund were $779,881, $905,754 and
$1,197,820, respectively. Of that amount, ABI received the amount of $49,752,
$50,255 and $72,788, respectively, representing that portion of the sales
charges paid on shares of the Fund sold during the year which was not re-allowed
to selected dealers (and was, accordingly, retained by ABI).

      During Global Real Estate's fiscal years ended November 30, 2015, November
30, 2014 and November 30, 2013, the aggregate amount of underwriting commission
payable with respect to shares of the Fund was $37,666, $42,653 and $115,910,
respectively. Of that amount, ABI received $1,878, $2,072 and $7,706,
respectively, representing that portion of the sales charges paid on shares of
the Fund sold during the period which was not re-allowed to selected dealers
(and was, accordingly, retained by ABI).

      During Small Cap Value's fiscal period ended November 30, 2015, the
aggregate amount of underwriting commission payable with respect to shares of
the Fund was $1,265. Of that amount, ABI received $74, representing that portion
of the sales charges paid on shares of the Fund sold during the period which was
not re-allowed to selected dealers (and was, accordingly, retained by ABI).

      During All Market Income's fiscal period ended November 30, 2015, the
aggregate amount of underwriting commission payable with respect to shares of
the Fund was $0. Of that amount, ABI received $0, representing that portion of
the sales charges paid on shares of the Fund sold during the period which was
not re-allowed to selected dealers (and was, accordingly, retained by ABI).

      The following table shows the CDSCs received by ABI from each share class
during the Funds' last three fiscal years or since inception.



Fiscal Year                                         Amounts             Amounts ABI            Amounts
Ended                                               ABI Received        Received In            ABI Received
October 31/                                         In CDSCs From       CDSCs From             In CDSCs From
November 30           Fund                          Class A Shares      Class B Shares         Class C Shares
-----------           ----                          --------------      --------------         --------------
                                                                                      
2015                  Value Fund                    $ 1,084             $   391                 $   394
2014                                                  1,342                 678                     377
2013                                                  2,763                 679                   1,752

2015                  Discovery Value               $16,437             $ 1,298                 $ 5,791
2014                                                 14,027               1,058                   6,749
2013                                                 10,041               2,647                   6,593

2015                  International Value           $ 3,938             $   999                 $ 1,219
2014                                                  4,279               1,162                   1,030
2013                                                  7,247               4,859                   4,109

2015                  Growth and Income             $ 6,443             $11,012                 $ 8,511
2014                                                  7,514              16,959                   6,364
2013                                                  6,951              16,425                   3,424

2015                  Core Opportunities            $ 1,106             $ 1,051                 $ 3,401
2014                                                  4,199                 694                   1,858
2013                                                  1,554               1,079                   4,523

2015                  Global Risk Allocation        $ 4,163             $ 3,514                 $ 1,363
2014                                                 10,080               5,526                     805
2013                                                  5,154               8,535                   6,458

2015                  Equity Income                 $ 9,919             $ 1,203                 $14,104
2014                                                  7,248                 734                  24,976
2013                                                  7,758               1,833                  17,954

2015                  Global Real Estate            $ 1,981             $   719                 $ 1,723
2014                                                  1,036                 999                     873
2013                                                  2,276               2,372                   7,414

2015                  Small Cap Value               $     0                 N/A                 $     0

2015                  All Market Income             $     0                 N/A                 $     0



Class A Shares
--------------

      The public offering price of Class A shares of a Fund is the NAV plus a
sales charge, as set forth below.

                                  Sales Charge
                                  ------------
                                                                  Discount or
                                                                  Commission
                                                                  to Dealers
                               As % of Net     As %               or Agents
Amount of                       Amount         of the Public      as % of
Purchase                       Invested        Offering Price     Offering 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
of a Fund 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". A 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 "re-allowed"
to selected dealers and agents. ABI will re-allow discounts to selected dealers
and agents in the amounts indicated in the table above. In this regard, ABI may
elect to re-allow 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 re-allowance in excess of 90% of such a sales charge may be deemed to
be an "underwriter" under the Securities Act.

      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 "AB 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 AB 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 of a Fund as described below
under "Class B Shares - Conversion Feature".

      Commissions may be paid to selected dealers or agents who initiate or are
responsible for Class A share purchases by a single shareholder of $1,000,000 or
more that are not subject to an initial sales charge at up to the following
rates: 1.00% on purchase amounts up to $3,000,000; plus 0.75% on purchase
amounts over $3,000,000 up to $5,000,000; plus 0.50% on purchase amounts over
$5,000,000. Commissions are paid based on cumulative purchases by a shareholder
over the life of an account with no adjustments for redemptions, transfers or
market declines.

      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. A 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 or domestic partner, 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 services in the nature of investment advisory or
            administrative services, or clients of broker-dealers or other
            financial intermediaries approved by ABI who purchase Class A shares
            for their own accounts through self-directed brokerage accounts with
            the broker-dealers or financial intermediaries that may or may not
            charge a transaction fee to its clients;

      (v)   certain retirement plan accounts, as described under "Alternative
            Purchase Arrangements - Group Retirement Plans and Tax-Deferred
            Accounts"; and

      (vi)  current Class A shareholders of AB Mutual Funds and investors who
            receive a "Fair Funds Distribution" (a "Distribution") resulting
            from an SEC enforcement action against the Adviser and current Class
            A shareholders of AB Mutual Funds who receive a Distribution
            resulting from any SEC enforcement action related to trading in
            shares of AB Mutual Funds who, in each case, purchase shares of an
            AB Mutual Fund from ABI through deposit with ABI of the Distribution
            check.

Class B Shares
--------------

      Effective January 31, 2009, sales of Class B shares to new investors were
suspended. Class B shares will only be issued (i) upon the exchange of Class B
shares from another AB Fund, (ii) for purposes of dividend reinvestment, (iii)
through the Funds' Automatic Investment Program for accounts that established
the Program prior to January 31, 2009, and (iv) for purchases of additional
Class B shares by Class B shareholders as of January 31, 2009. The ability to
establish a new Automatic Investment Program for accounts containing Class B
shares was suspended as of January 31, 2009.

      Investors may purchase Class B shares of a Fund at the public offering
price equal to the NAV per share of the Class B shares of that Fund on the date
of purchase without the imposition of a sales charge at the time of purchase.
The Class B shares of a Fund 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 of a Fund
will automatically convert to Class A shares of that Fund 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 of a Fund
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 shares, Class B shares of a Fund
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 of a Fund in the
shareholder's account (other than those in the sub-account) convert to Class A
shares of that Fund, 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 of a Fund 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 of a Fund
to Class A shares of that Fund 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 of that Fund 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 of a Fund at the public offering
price equal to the NAV per share of the Class C shares of that Fund 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 of a Fund 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 each Fund to
sell its 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 of a Fund do not
convert to any other class of shares of that Fund and incur higher distribution
services fees and transfer agency costs than Class A shares and Advisor Class
shares of the relevant Fund, and will thus have a higher expense ratio and pay
correspondingly lower dividends than Class A shares and Advisor Class shares.

Contingent Deferred Sales Charge
--------------------------------

      Class B shares of a Fund 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%, as are Class A share purchases by certain group
retirement plans (see "Alternative Purchase Arrangements - Group Retirement
Plans and Tax-Deferred Accounts" below). 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 100 Class B shares of a
Fund at $10 per share (at a cost of $1,000) and in the second year after
purchase, the NAV per share is $12 and, during such time, the investor has
acquired 10 additional Class B shares of the Fund upon dividend reinvestment. If
at such time the investor makes his or her first redemption of 50 Class B shares
(proceeds of $600), 10 Class B shares will not be subject to the charge because
of dividend reinvestment. With respect to the remaining 40 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, $400 of the $600 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
of a Fund until the time of redemption of such shares.

                                               Contingent Deferred Sales
                                               Charge for the Fund as a % of
         Year Since Purchase                   Dollar 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 shares and
Class C shares of a Fund, 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 AB Mutual Fund originally purchased by
the shareholder. If you redeem your shares and directly invest the proceeds in
units of CollegeBoundfund, the CDSC will apply to the units of CollegeBoundfund.
The CDSC period begins with the date of your original purchase, not the date of
exchange for the other Class B shares or Class C shares, as applicable, or
purchase of CollegeBoundfund units.

      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 a 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 CDSC and
the distribution services fee enables a 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 who has attained
the age of 70 1/2, (iii) that had been purchased by present or former Directors
of the Funds, 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 for Class A Shares - 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) due to the complete termination of a trust upon the death
of the trustor/grantor, beneficiary or trustee but only if the trust termination
is specifically provided for in the trust document, or (vii) that had been
purchased with proceeds from a Distribution resulting from any SEC enforcement
action related to trading in shares of AB Mutual Funds through deposit with ABI
of the Distribution check. The CDSC is also waived for (i) permitted exchanges
of shares, (ii) holders of Class A shares who purchased $1,000,000 or more of
Class A shares where the participating broker or dealer involved in the sale of
such shares waived the commission it would normally receive from ABI or (iii)
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
each Fund or, in the case of a group retirement plan, a single account for each
plan, and where no advance commission is paid to any financial intermediary in
connection with the purchase of such shares.

Advisor Class Shares
--------------------

      Advisor Class shares of the Funds 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, (iii) by officers
and present or former Directors of the Funds or other investment companies
managed by the Adviser, officers, directors and present or retired full-time
employees and former employees (for subsequent investments in accounts
established during the course of their employment) of the Adviser, ABI, ABIS and
their affiliates, or the relatives of any such person, or any trust, individual
retirement account or retirement plan for the benefit of any such person or (iv)
by the categories of investors described in clauses (i), (iii) and (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 a 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.

Class R Shares
--------------

      Class R shares are offered to certain group retirement plans. 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 and pay correspondingly lower dividends than
Class A shares.

Class K Shares
--------------

      Class K shares are available at NAV to certain group retirement plans.
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 group retirement plans 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.

Class Z Shares
--------------

      Class Z shares are available at 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").

      Class Z shares are also available to certain AllianceBernstein-sponsored
group retirement plans. Class Z 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. Class Z
shares are not currently available to group retirement plans in the
AllianceBernstein-sponsored programs known as the "Informed Choice" programs.

      Class Z 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.

Alternative Purchase Arrangements - Group Retirement Plans and
Tax-Deferred Accounts
-------------------------------------------------------------------

      The Funds offer 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 Funds, 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 Funds. 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. A 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 eligible at the
beginning of a month for purchases of Class A shares at NAV meets the asset
level or number of employees required for such eligibility, later in that month
all purchases by the plan will be subject to a sales charge until the monthly
measurement of assets and employees. If the plan terminates a Fund as an
investment option within one year, then plan purchases of Class A shares will be
subject to a 1%, 1-year CDSC redemption.

      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. Class R shares are not subject to front-end sales charges or CDSCs, but
are subject to a .50% distribution fee.

      Class K Shares. Class K shares are available to certain group retirement
plans. 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 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 distribution fee.

      Class Z Shares. Class Z shares are available to certain group retirement
plans. Class Z shares are not subject to front-end sales charges or CDSCs or
distribution fees.

      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 a 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
a Fund's share class eligibility criteria before determining whether to invest.

      Currently, the Funds make their Class A shares available at NAV to group
retirement plans. 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 and Class Z
shares have no CDSC or Rule 12b-1 distribution fees, plans should consider
purchasing Class K, Class I or Class Z 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 (0.25%) 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, effective January 31, 2009, sales of Class B shares to
new investors were suspended. While Class B shares were 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, Class I and Class Z
shares have lower expenses, and therefore may have higher returns, than Class B
shares, before determining which class to make available to its plan
participants.

Sales Charge Reduction Programs for Class A Shares
--------------------------------------------------

      The AB 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, a Fund must be notified by the shareholder
or his/her financial intermediary that they qualify for such a reduction. If a
Fund is not notified that a shareholder is eligible for these reductions, the
relevant 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 a Fund (and/or any other AB
Mutual Fund) into a single "purchase." By combining such purchases, a
shareholder 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 a Fund or any other AB
Mutual Fund, including AB Institutional Funds, by (i) an individual, his or her
spouse or domestic partner, or the individual's children under the age of 21
years purchasing shares for his, her or their own account(s), including certain
CollegeBoundfund accounts; (ii) a trustee or other fiduciary purchasing shares
for a single trust, estate or single fiduciary account with one or more
beneficiaries involved; or (iii) 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 which has not been in existence for at least six months or which has no
purpose other than the purchase of shares of a 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 AB Mutual Funds include:

AB Bond Fund, Inc.
      - AB All Market Real Return Portfolio
      - AB Bond Inflation Strategy
      - AB Credit Long/Short Portfolio
      - AB Government Reserves Portfolio
      - AB High Yield Portfolio
      - AB Intermediate Bond Portfolio
      - AB Limited Duration High Income Portfolio
      - AB Municipal Bond Inflation Strategy
      - AB Tax-Aware Fixed Income Portfolio
AB Cap Fund, Inc.
      - AB All Market Alternative Return Portfolio
      - AB All Market Growth Portfolio
      - AB All Market Income Portfolio
      - AB Asia Ex-Japan Equity Portfolio
      - AB Concentrated Growth Fund
      - AB Concentrated International Growth Portfolio
      - AB Emerging Markets Core Portfolio
      - AB Emerging Markets Growth Portfolio
      - AB Emerging Markets Multi-Asset Portfolio
      - AB Global Core Equity Portfolio
      - AB International Strategic Core Portfolio
      - AB Long/Short Multi-Manager Fund
      - AB Multi-Manager Alternative Strategies Fund
      - AB Multi-Manager Select Retirement Allocation Fund
      - AB Multi-Manager Select 2010 Fund
      - AB Multi-Manager Select 2015 Fund
      - AB Multi-Manager Select 2020 Fund
      - AB Multi-Manager Select 2025 Fund
      - AB Multi-Manager Select 2030 Fund
      - AB Multi-Manager Select 2035 Fund
      - AB Multi-Manager Select 2040 Fund
      - AB Multi-Manager Select 2045 Fund
      - AB Multi-Manager Select 2050 Fund
      - AB Multi-Manager Select 2055 Fund.
      - AB Select US Equity Portfolio
      - AB Select US Long/Short Portfolio
      - AB Small Cap Growth Portfolio
      - AB Small Cap Value Portfolio
AB Core Opportunities Fund, Inc.
AB Discovery Growth Fund, Inc.
AB Equity Income Fund, Inc.
AB Exchange Reserves
AB Global Bond Fund, Inc.
AB Global Real Estate Investment Fund, Inc.
AB Global Risk Allocation Fund, Inc.
AB Global Thematic Growth Fund, Inc.
AB Growth and Income Fund, Inc.
AB High Income Fund, Inc.
AB International Growth Fund, Inc.
AB Large Cap Growth Fund, Inc.
AB Municipal Income Fund, Inc.
      - AB California Portfolio
      - AB High Income Municipal Portfolio
      - AB National Portfolio
      - AB New York Portfolio
AB Municipal Income Fund II
      - AB Arizona Portfolio
      - AB Massachusetts Portfolio
      - AB Michigan Portfolio
      - AB Minnesota Portfolio
      - AB New Jersey Portfolio
      - AB Ohio Portfolio
      - AB Pennsylvania Portfolio
      - AB Virginia Portfolio
AB Trust
      - AB Discovery Value Fund
      - AB International Value Fund
      - AB Value Fund
AB Unconstrained Bond Fund, Inc.
The AB Portfolios
      - AB Balanced Wealth Strategy
      - AB Conservative Wealth Strategy
      - AB Growth Fund
      - AB Tax-Managed Balanced Wealth Strategy
      - AB Tax-Managed Conservative Wealth Strategy
      - AB Tax-Managed Wealth Appreciation Strategy
      - AB Wealth Appreciation 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 AB 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 or on the Internet at www.ABglobal.com.

      Cumulative Quantity Discount (Right of Accumulation). An investor's
purchase of additional Class A shares of a 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 higher of cost or NAV (at the close of business on the
                  previous day) of (a) all shares of the relevant Fund held by
                  the investor and (b) all shares held by the investor of any
                  other AB Mutual Fund, including AB Institutional Funds and
                  certain CollegeBoundfund accounts for which the investor, his
                  or her spouse or domestic partner, or child under the age of
                  21 is a participant; and

            (iii) the higher of cost or 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).

      The initial sales charge you pay on each purchase of Class A shares will
take into account your accumulated holdings in all classes of shares of AB
Mutual Funds. Your accumulated holdings will be calculated as (a) the value of
your existing holdings as of the day prior to your additional investment or (b)
the amount you invested including reinvested dividends but excluding
appreciation and less any amount of withdrawals, whichever is higher.

      For example, if an investor owned shares of an AB Mutual Fund that were
purchased for $200,000 and were worth $190,000 at their then current NAV and,
subsequently, purchased Class A shares of a 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 that 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 AB 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.

      Investors qualifying for the Combined Purchase Privilege described above
may purchase shares of the AB Mutual Funds under a single Letter of Intent. The
AB Mutual Funds will use the higher of cost or current NAV of the investor's
existing investments and of those accounts with which investments are combined
via Combined Purchase Privileges toward the fulfillment of the 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 a Fund, the investor and the investor's
spouse or domestic partner each purchase shares of that Fund worth $20,000 (for
a total of $40,000), but the current NAV of all applicable accounts is $45,000
at the time a $100,000 Letter of Intent is initiated, it will only be necessary
to invest a total of $55,000 during the following 13 months in shares of the
Fund or any other AB 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 a 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 shares of a Fund may reinvest all or any portion of the proceeds
from that redemption in Class A shares of any AB Mutual Fund at NAV without any
sales charge, provided that such reinvestment is made within 120 calendar days
after the redemption or repurchase date. 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 relevant Fund at the
address shown on the cover of this SAI.

      Dividend Reinvestment Program. Under a Fund's Dividend Reinvestment
Program, unless you specify otherwise, your dividends and distributions will be
automatically reinvested in the same class of shares of the Fund without an
initial sales charge or CDSC. If you elect to receive your distributions in
cash, you will only receive a check if the distribution is equal to or exceeds
$25.00. Distributions of less than $25.00 will automatically be reinvested in
Fund shares. To receive distributions of less than $25.00 in cash, you must have
bank instructions associated to your account so that distributions can be
delivered to you electronically via Electronic Funds Transfer using the
Automated Clearing House or "ACH". If you elect to receive distributions by
check, your distributions and all subsequent distributions may nonetheless be
reinvested in additional shares of the Fund under the following circumstances:

            (a)   the postal service is unable to deliver your checks to your
                  address of record and the checks are returned to the Fund's
                  transfer agent as undeliverable; or

            (b)   your checks remain uncashed for nine months.

      Additional shares of the Fund will be purchased at the then current NAV.
You should contact the Fund's transfer agent to change your distribution option.
Your request to do so must be received by the transfer agent before the record
date for a distribution in order to be effective for that distribution. No
interest will accrue on amounts represented by uncashed distribution checks.

      Dividend Direction Plan. A shareholder who already maintains accounts in
more than one AB Mutual Fund may direct that income dividends and/or capital
gains paid by one AB Mutual Fund be automatically reinvested, in any amount,
without the payment of any sales or service charges, in shares of any eligible
class of one or more other AB Mutual Fund(s) at which the shareholder maintains
an account. 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 Mutual
Fund Application found in your Prospectus. Current shareholders should contact
ABIS to establish a dividend direction plan.

Systematic Withdrawal Plan
--------------------------

      General. Any shareholder who owns or purchases shares of a 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 a Fund automatically reinvested in additional shares of that
Fund.

      Shares of a Fund owned by a participant in each 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 a 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 a 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 ACH network. Investors wishing to establish a systematic
withdrawal plan in conjunction with their initial investment in shares of a Fund
should complete the appropriate portion of the Mutual Fund 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 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 A, Class B or Class C shares of
a Fund in a shareholder's account may be redeemed free of any CDSC.

      Class B shares of a Fund 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 of a Fund, 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 Funds. These
financial intermediaries employ financial advisors and receive compensation for
selling shares of a Fund. This compensation is paid from various sources,
including any sales charge, CDSC and/or Rule 12b-1 fee that you or a 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 and Class K shares, up to 100% of the Rule 12b-1
fee applicable to Class R and Class K shares each year may be paid to financial
intermediaries, including your financial intermediary, that sell Class R and
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 Funds, ABI
and/or the Adviser in several ways from various sources, which include some or
all of the following:

            o     upfront sales commissions;

            o     Rule 12b-1 fees;

            o     additional distribution support;

            o     defrayal of costs for educational seminars and training; and

            o     payments related to providing shareholder recordkeeping and/or
                  administrative services.

      Please read your Prospectus carefully for information on this
compensation.

Other Payments for Distribution Services and Educational Support
----------------------------------------------------------------

      In addition to the commission 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 AB 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 AB 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 AB 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 2016, ABI's additional payments to these firms for distribution
services and educational support related to the AB Mutual Funds are expected to
be approximately 0.05% of the average monthly assets of the AB Mutual Funds, or
approximately $21 million. In 2015, ABI paid approximately 0.05% of the average
monthly assets of the AB Mutual Funds, or approximately $21 million, for
distribution services and education support related to the AB Mutual Funds.

      A number of factors are considered in determining the additional payments,
including each firm's AB 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 or marketing purposes. In some cases, firms will include the AB
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 AB 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 AB Mutual Fund shares.
Please see "Expenses of the Funds - Transfer Agency Agreement" above. These
expenses paid by the Funds are included in "Other Expenses" under "Fees and
Expenses of the Funds - Annual 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 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 your purchase.

      ABI anticipates that the firms that will receive additional payments for
distribution services and/or educational support include:

      Advisor Group, Inc.
      Ameriprise Financial Services
      AXA Advisors
      Cadaret, Grant & Co.
      Citigroup Global Markets
      Citizens Securities
      Commonwealth Financial Network
      Donegal Securities
      JP Morgan Securities
      Lincoln Financial Advisors Corp.
      Lincoln Financial Securities Corp.
      LPL Financial
      Merrill Lynch
      Morgan Stanley
      Northwestern Mutual Investment Services
      PNC Investments
      Raymond James
      RBC Wealth Management
      Robert W. Baird
      Santander Securities
      SunTrust Bank
      UBS Financial Services
      US Bancorp Investments
      Wells Fargo Advisors

      ABI expects that additional firms may be added to this list from time to
time.

      Although a Fund may use brokers and dealers who sell shares of the Funds
to effect portfolio transactions, the Fund does not consider the sale of AB
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. Similarly, if you are a
shareholder through a group retirement plan, your plan may impose requirements
with respect to the purchase, sale or exchange of shares of a Fund that are
different from those imposed below. Each 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 each 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 relevant Fund.

Redemption
----------

      Subject only to the limitations described below, each Fund will redeem the
shares tendered to them, 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 of a Fund, there is no redemption charge. Payment
of the redemption price normally will be made within seven days after a 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 SEC determines
that trading thereon is restricted, or for any period during which an emergency
(as determined by the SEC) exists as a result of which disposal by a Fund of
securities owned by it is not reasonably practicable or as a result of which it
is not reasonably practicable for a Fund fairly to determine the value of its
net assets, or for such other periods as the SEC may by order permit for the
protection of security holders of a Fund.

      Payment of the redemption price normally will be made in cash but, at the
option of a Fund, may be made in-kind. 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 relevant Fund's portfolio securities at
the time of such redemption or repurchase. Redemption proceeds on Class A, Class
B and Class C shares of a Fund will reflect the deduction of the CDSC, if any.
Payment received by a shareholder upon redemption or repurchase of his or her
shares, assuming the shares constitute capital assets in the shareholder's
hands, will result in long-term or short-term capital gain (or loss) depending
upon the shareholder's holding period and basis in respect of the shares
redeemed.

      To redeem shares of a Fund for which no share certificates have been
issued, the registered owner or owners should forward a letter to the relevant
Fund containing a request for redemption. A Fund may require the signature or
signatures on the letter to be Medallion Signature Guaranteed. Please contact
ABIS to determine whether a Medallion Signature Guarantee is needed.

      To redeem shares of a Fund represented by share certificates, the investor
should forward the appropriate stock certificate or certificates, endorsed in
blank or with blank stock powers attached, to the relevant 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 a 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 relevant Fund. The signature or signatures on the
assignment form must be guaranteed in the manner described above.

      Telephone Redemption by Electronic Funds Transfer. Each shareholder of a
Fund 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 Mutual Fund
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 before the Fund Closing 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 shareholder of a Fund is eligible to
request redemption by check of the relevant Fund shares for which no share
certificates have been issued by telephone at (800) 221-5672 before the Fund
Closing 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 Mutual Fund 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. Each 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 Funds,
the Adviser, ABI nor ABIS will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be genuine. Each
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 a 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.

      A Fund may redeem 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
of a Fund), except that requests placed through financial intermediaries before
the Fund Closing Time will be executed at the NAV determined as of the Fund
Closing Time 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 a Fund to ABI either
directly or through a financial intermediary. None of the Funds nor ABI charges
a fee or commission in connection with the redemption of shares (except for the
CDSC, if any, with respect to Class A, Class B and Class C shares of a Fund).
Normally, if shares of a Fund are offered through a financial intermediary, the
redemption is settled by the shareholder as an ordinary transaction with or
through the financial intermediary, who may charge the shareholder for this
service. The redemption of shares of a Fund as described above with respect to
financial intermediaries is a voluntary service of the Funds and a Fund may
suspend or terminate this practice at any time.

Account Closure
---------------

      Each Fund reserves the right to close out an account that has remained
below $1,000 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 a Fund
recently purchased by check, redemption proceeds will not be made available
until that 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 of a Fund 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. 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 intermediary.

Automatic Investment Program
----------------------------

      Investors may purchase shares of the Funds 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 financial intermediary 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
Mutual Fund Application. As of January 31, 2009, the Automatic Investment
Program is available for purchase of Class B shares only if a shareholder was
enrolled in the Program prior to January 31, 2009. 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 $50 monthly minimum.

Exchange Privilege
------------------

      You may exchange your investment in a Fund for shares of the same class of
other AB Mutual Funds (including AB Exchange Reserves, a money market fund
managed by the Adviser) if the other AB 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 AB Mutual
Fund, (iii) certain employee benefit plans for employees of the Adviser, ABI,
ABIS and their affiliates and (iv) certain 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 may, on a tax-free basis, exchange Class A or Class C
shares of the Fund for Advisor Class shares of the Fund or Class C shares of the
Fund for Class A 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 the Fund Closing Time on that day.

      Shares will continue to age without regard to exchanges for purposes of
determining the CDSC, if any, upon redemption and, in the case of Class B shares
of a Fund, for the purpose of conversion to Class A shares of that Fund. 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
AB 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 AB 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 or
Class C shares of a Fund for Advisor Class shares or Class C shares for Class A
shares of the same 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 AB 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 AB 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 of shares of AB Mutual Funds will generally
result in the realization of a capital gain or loss for federal income tax
purposes.

      Each shareholder of a Fund 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 Mutual Fund
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 the Fund Closing Time on a Fund business day, as defined above. Telephone
requests for exchange received before the Fund Closing 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, 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 AB Mutual Fund.

      None of the AB Mutual Funds, the Adviser, ABI or ABIS will be responsible
for the authenticity of telephone requests for exchanges that a Fund reasonably
believes to be genuine. The Funds 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 a 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 AB
Mutual Funds being acquired may legally be sold. Each AB Mutual Fund reserves
the right, at any time on 60 days' notice to its shareholders, to reject any
orders to acquire its shares through exchange or otherwise to modify, restrict
or terminate the exchange privilege.

Statements and Reports
----------------------

      Each shareholder 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,
Ernst & Young LLP, 5 Times Square, New York, New York 10036, as applicable, 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 of each Fund is calculated at the close of regular trading on any
day the Exchange is open (ordinarily 4:00 p.m., Eastern time, but sometimes
earlier, as in the case of scheduled half-day trading or unscheduled suspensions
of trading) following receipt of a purchase or redemption order by a Fund on
each Fund business day on which such an order is received and on such other days
as the Board deems appropriate or necessary in order to comply with Rule 22c-1
under the 1940 Act. Each Fund's NAV is calculated by dividing the value of that
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.

      Portfolio securities are valued at current market value or, if market
quotations are not readily available or are unreliable, at fair value as
determined in accordance with applicable rules under the 1940 Act and the Funds'
pricing policies and procedures established by and under the general supervision
of the Boards (the "Pricing Policies"). The Boards have delegated to the
Adviser, subject to the Boards' continuing oversight, certain of its duties with
respect to the Pricing Policies. The Adviser has established a Valuation
Committee, which operates under policies and procedures approved by the Boards,
to value a Fund's assets on behalf of the Fund.

      Whenever possible, securities are valued based on market information on
the business day as of which the value is being determined as follows:

      (a) an equity security listed on the Exchange, or on another national or
foreign exchange (other than securities listed on the Nasdaq Stock Exchange
("NASDAQ")), is valued at the last sale price reflected on the consolidated tape
at the close of the exchange. If there has been no sale on the relevant business
day, the security is then valued at the last-traded price;

      (b) an equity security traded on NASDAQ is valued at the NASDAQ Official
Closing Price;

      (c) an OTC equity security is valued at the mid level between the current
bid and asked prices. If the mid price is not available, the security will be
valued at the bid price. An equity security traded on more than one exchange is
valued in accordance with paragraph (a) above by reference to the principal
exchange (as determined by the Adviser) on which the security is traded;

      (d) a listed or OTC put or call option is valued at the mid level between
the current bid and asked prices (for options or futures contracts, see item
(e)). If neither a current bid nor a current ask price is available, the Adviser
will have discretion to determine the best valuation (e.g., last trade price)
and then bring the issue to the Valuation Committee the next day;

      (e) an open futures contract and any option thereon is valued at 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 relevant business
day, the security is valued at the last available closing settlement price;

      (f) a listed right is valued at the last-traded price provided by approved
vendors. If there has been no sale on the relevant business day, the right is
valued at the last-traded price from the previous day. On the following day, the
security is valued in good faith at fair value. For an unlisted right, the
calculation used in determining a value is the price of the reference security
minus the subscription price multiplied by the terms of the right. There may be
some instances when the subscription price is greater than the referenced
security right. In such instances, the right would be valued as worthless;

      (g) a listed warrant is valued at the last-traded price provided by
approved vendors. If there is no sale on the relevant business day, the warrant
is valued at the last-traded price from the previous day. On the following day,
the security is valued in good faith at fair value. All unlisted warrants are
valued in good faith at fair value. Once a warrant has expired, it will no
longer be valued;

      (h) preferred securities are valued based on prices received from approved
vendors that use last trade data for listed preferreds and evaluated bid prices
for non-listed preferreds, as well as for listed preferreds when there is no
trade activity;

      (i) U.S. Government securities and any other debt instrument having 60
days or less remaining until maturity generally are valued at market by an
independent pricing service, if a market price is available. If a market price
is not available, the securities are valued at amortized cost. This methodology
pertains to short-term securities that have an original maturity of 60 days or
less, as well as short term securities that had an original term to maturity
that exceeded 60 days. In instances in which amortized cost is utilized, the
Valuation Committee must reasonably conclude that the utilization of amortized
cost is approximately the same as the fair value of the security. The factors
the Valuation Committee will consider include, but are not limited to, an
impairment of the creditworthiness of the issuer or material changes in interest
rates. The Adviser is responsible for monitoring any instances when a market
price is not applied to a short term security and will report any instances to
the Valuation Committee for review;

      (j) a fixed-income security is typically valued on the basis of bid prices
provided by an approved pricing vendor when the Adviser reasonably believes that
such prices reflect the fair market value of the security. In certain markets,
the market convention may be to use the mid price between bid and offer.
Fixed-income securities may be valued on the basis of mid prices when such
prices reflect the conventions of the particular markets. The prices provided by
an approved pricing vendor may take into account many factors, including
institutional size trading in similar groups of securities and any developments
related to specific securities. If the Adviser determines that an appropriate
pricing vendor does not exist for a security in a market that typically values
such security on the basis of a bid price, the security is valued on the basis
of a quoted bid price or spread over the applicable yield curve (a bid spread)
by a broker/dealer in such security. If the Adviser receives multiple broker
quotes that are deemed to be reliable, then the Adviser will utilize the second
highest broker quote. If an appropriate pricing vendor does not exist for a
security in a market where convention is to use the mid price, the security is
valued on the basis of a quoted mid price by a broker-dealer in such security;

      (k) bank loans are valued on the basis of bid prices provided by a pricing
vendor;

      (l) bridge loans are valued at fair value, which equates to the
outstanding loan amount unless it is determined by the Adviser that any
particular bridge loan should be valued at something other than outstanding loan
amount. This may occur, due to, for example, a significant change in the high
yield market and/or a significant change in the status of any particular issuer
or issuers of bridge loans;

      (m) whole loans: residential and commercial mortgage whole loans and whole
loan pools are market priced by an approved vendor;

      (n) forward and spot currency pricing is provided by an independent
pricing vendor. The rate provided by the approved vendor is a mid price for
forward and spot rates. In most instances whenever both an "onshore" rate and an
"offshore" (i.e., NDF) rate is available, the Adviser will use the offshore
(NDF) rate. NDF contracts are used for currencies where it is difficult (and
sometimes impossible) to take actual delivery of the currency;

      (o) OTC derivatives pricing: various independent pricing vendors are used
to obtain derivatives values or obtain information used to derive a price for
each investment. This information is placed into various pricing models that can
be sourced by the Adviser or from approved vendors (depending on the type of
derivative) to derive a price for each investment. These pricing models are
monitored/reviewed on an ongoing basis by the Adviser;

      (p) mutual funds and other pooled vehicles: the Adviser receives pricing
information for mutual funds and other pooled vehicles from various sources
(including AB Global Fund Administrator and the external custodian banks).
Open-end mutual funds are valued at the closing NAV per share and closed-end
funds and ETFs are valued at the closing market price per share;

      (q) repurchase agreements and reverse repurchase agreements: repurchase
agreements and reverse repurchase agreements will be valued based on their
original cost plus accrued interest;

      (r) hedge funds: hedge funds will be priced at the most recent available
closing NAV per share;

      (s) equity-linked notes: prices are sourced at the end of the pricing day
from approved vendors. The vendor methodology is to source the relevant
underlying non-U.S. dollar exchange closing prices and convert them to U.S.
dollars; and

      (t) credit-linked notes: prices are sourced on the reference bond
consistent with fixed-income security methodology as noted above, which are
passed through as the price on the credit-linked note. Alternatively, broker
marks are obtained.

      If the Adviser becomes aware of any news/market events that would cause
the Valuation Committee to believe the last traded or market-based price, as
applicable, does not reflect fair value, the security is then valued in good
faith at fair value by, or in accordance with, procedures approved by the Board.

      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 a 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.

      Each 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. A 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 each Fund ordinarily 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, a 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.

      Each Fund's Board may suspend the determination of its NAV (and the
offering and sale of shares), subject to the rules of the SEC 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 a 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 SEC by order permits a suspension of
the right of redemption or a postponement of the date of payment on redemption.

      For purposes of determining each 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.

      The assets attributable to the each class of shares are invested together
in a single portfolio for each Fund. 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 each Fund in accordance with Rule 18f-3 under the 1940 Act.

--------------------------------------------------------------------------------

                       DIVIDENDS, DISTRIBUTIONS AND TAXES

--------------------------------------------------------------------------------


      Dividends paid by a Fund, if any, with respect to Class A, Class B, Class
C, Class R, Class K, Class I, Class Z and Advisor Class shares of that Fund 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 Funds and to shareholders of the
Funds. 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 Funds 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 a 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
-------

      Each Fund intends for each taxable year to qualify to be taxed as a
"regulated investment company" under the Code. To so qualify, a 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 (i) securities of any one issuer
(other than U.S. Government securities or securities of other regulated
investment companies), (ii) 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 (iii) securities of one or more "qualified publicly traded
partnerships".

      If a 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.

      Each 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 the shareholders equal to at least the sum of (i) 98% of
its ordinary income for that year; (ii) 98.2% of its capital gain net income and
foreign currency gains for the twelve-month period ending on October 31 of that
year or later, if the Fund is permitted to so elect and so elects; 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 of a given year but actually paid during the
immediately 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 for
the year declared and not for 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 a Fund and assume 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
a 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
---------------------------

      Each Fund intends to make timely distributions of its respective taxable
income (including any net capital gain) so that none of the Funds will be
subject to federal income or excise taxes. Income dividends generally are
distributed annually, except with respect to Global Risk Allocation and Equity
Income which generally distribute quarterly, and All Market Income, which
generally distributes monthly; capital gains distributions for the Funds
generally occur annually in December. Dividends of each Fund's net ordinary
income and distributions of any net realized short-term capital gain will
generally be taxable to shareholders as ordinary income. In the case of
corporate shareholders, such dividends may be eligible for the
dividends-received deduction, except that the amount eligible for the deduction
is limited to the amount of qualifying dividends received by the relevant Fund.

      Some or all of the distributions from the Fund may be treated as
"qualified dividend income", taxable to individuals, trusts and estates at the
reduced tax rates applicable to long-term capital gains. 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 with respect to which the dividend is paid. 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 Funds. Any dividend
or distribution received by a shareholder on shares of a 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 a
Fund.

      After the end of the calendar year, a Fund will notify shareholders of the
federal income tax status of any distributions made by the Fund to shareholders
during such year.

      Tax Qualified Plans. A dividend or capital gains distribution with respect
to shares of a Fund held by a tax-deferred or qualified plan, such as an
individual retirement account, 403(b)(7) retirement account 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 (at a rate of 28%) if
such shareholder fails to provide the relevant Fund with his or her correct
taxpayer identification number, fails to make required certifications, or is
notified by the Internal Revenue Service ("IRS") that he or she is subject to
backup withholding. Corporate shareholders and certain other shareholders
specified in the Code are exempt from such backup withholding. Backup
withholding is not an additional tax; any amounts so withheld may be credited
against a shareholder's U.S. federal income tax liability or refunded by filing
a refund claim with the IRS, provided that the required information is furnished
to the IRS.

      Sales and Redemptions. Any gain or loss arising from a sale or redemption
of Fund shares generally will be a capital gain or loss if a Fund's shares are
held as a capital asset, and will be a long-term capital gain or loss if such
shareholder has held such shares for more than one year at the time of the sale
or redemption; otherwise it will be a short-term capital gain or loss. If a
shareholder has held shares in a 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 a
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
relevant Fund's Dividend Reinvestment Plan would constitute a reacquisition if
made within the period. If a loss is disallowed, then such loss will be
reflected in an upward adjustment to the basis of the shares acquired.

      Cost Basis Reporting. As part of the Energy Improvement and Extension Act
of 2008, mutual funds are required to report to the Internal Revenue Service the
"cost basis" of shares acquired by a shareholder on or after January 1, 2012
("covered shares") and subsequently redeemed. These requirements do not apply to
investments through a tax-deferred arrangement, such as a 401(k) plan or an
individual retirement plan. The "cost basis" of a share is generally its
purchase price adjusted for dividends, return of capital, and other corporate
actions. Cost basis is used to determine whether a sale of the shares results in
a gain or loss. The amount of gain or loss recognized by a shareholder on the
sale or redemption of shares is generally the difference between the cost basis
of such shares and their sale price. If you redeem covered shares during any
year, then the Fund will report the cost basis of such covered shares to the IRS
and you on Form 1099-B along with the gross proceeds received on the redemption,
the gain or loss realized on such redemption and the holding period of the
redeemed shares.

      Your cost basis in your covered shares is permitted to be calculated using
any one of three alternative methods: Average Cost, First In-First Out (FIFO)
and Specific Share Identification. You may elect which method you want to use by
notifying the Fund. This election may be revoked or changed by you at any time
up to the date of your first redemption of covered shares. If you do not
affirmatively elect a cost basis method then the Fund's default cost basis
calculation method, which is currently the Average Cost method - will be applied
to your account(s). The default method will also be applied to all new accounts
established unless otherwise requested.

      If you hold Fund shares through a broker (or another nominee), please
contact that broker (nominee) with respect to the reporting of cost basis and
available elections for your account.

      You are encouraged to consult your tax advisor regarding the application
of the new cost basis reporting rules and, in particular, which cost basis
calculation method you should elect.

      Foreign Taxes. Investment income received by the Funds from sources within
foreign countries may also 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 a 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 each 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.

      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 Funds
--------------------------------------------------

      The following discussion relates to certain significant United States
federal income tax consequences to a Fund with respect to the determination of
its "investment company taxable income" each year. This discussion assumes that
a Fund will be taxed as a regulated investment company for each of its taxable
years.

      Passive Foreign Investment Companies. If a 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. A Fund may also be
subject to additional interest charges in respect of deferred taxes arising from
such distributions or gains. Any tax paid by a 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 production of "passive income". In some
cases, a Fund may be able to elect to "mark-to-market" stock in a PFIC. If a
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. A 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. A 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 a
Fund, would be treated as ordinary loss. A 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 a 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.

      Investments in the Wholly-Owned Subsidiary. As described in the
Prospectus, Global Risk Allocation may gain exposure to the commodities markets
through investments in commodity-linked derivative instruments. On December 16,
2005, the IRS issued Revenue Ruling 2006-1 which held that income derived from
commodity-linked swaps would not be qualifying income. As such, Global Risk
Allocation's ability to utilize commodity-linked swaps as part of its investment
Fund is limited to a maximum of 10 percent of its gross income.

      A subsequent revenue ruling, Revenue Ruling 2006-31, clarified the holding
of Revenue Ruling 2006-1 by providing that income from alternative investment
instruments (such as certain commodity index-linked notes) that create commodity
exposure may be considered qualifying income under the Code. Global Risk
Allocation intends to seek exposure to the commodities markets primarily through
investments in the Subsidiary (as described below). Global Risk Allocation has
received an opinion of counsel that such income should constitute qualifying
income for the purposes of Subchapter M. The IRS has also issued numerous
private letter rulings to other investment companies holding that income derived
from an investment in a subsidiary that invests in commodity-linked derivatives
constitutes qualifying income for the purposes of Subchapter M. These rulings
can only be relied upon by the taxpayer to whom they were issued and therefore
Global Risk Allocation cannot rely on them. In August 2011, the IRS suspended
the issuance of private letter rulings in this area while it considers certain
issues raised by the private letter rulings. Global Risk Allocation intends to
apply for a ruling if the IRS resumes consideration and issuance of the rulings.
Until such time as the IRS issues a ruling to Global Risk Allocation, the Fund
will rely on its opinion of counsel. If the IRS were to change the position
expressed in the earlier private letter rulings, then Global Risk Allocation may
be required to change its investment strategy in order to continue to qualify as
a regulated investment company.

      The Subsidiary will be treated as a controlled foreign corporation
("CFC"). Global Risk Allocation will be treated as a "U.S. shareholder" of the
Subsidiary. As a result, Global Risk Allocation will be required to include in
gross income for U.S. federal income tax purposes all of the Subsidiary's
"subpart F income," whether or not such income is distributed by the Subsidiary.
It is expected that all of the Subsidiary's income will be "subpart F income."
Global Risk Allocation's recognition of the Subsidiary's "subpart F income" will
increase the Fund's tax basis in the Subsidiary. Distributions by the Subsidiary
to Global Risk Allocation will be tax-free, to the extent of its previously
undistributed "subpart F income", and will correspondingly reduce Global Risk
Allocation's tax basis in the Subsidiary. "Subpart F income" is generally
treated as ordinary income, regardless of the character of the Subsidiary's
underlying income. If a net loss is realized by the Subsidiary, such loss is not
generally available to offset the income earned by Global Risk Allocation.

      Foreign corporations, such as the Subsidiary, will generally not be
subject to U.S. federal income taxation unless they are deemed to be engaged in
a U.S. trade or business. It is expected that the Subsidiary will conduct its
activities in a manner so as to meet the requirements of a safe harbor under
Section 864(b)(2) of the Code under which the Subsidiary may engage in trading
in stocks or securities or certain commodities without being deemed to be
engaged in a U.S. trade or business. However, if certain of the Subsidiary's
activities were determined not to be of the type described in the safe harbor
(which is not expected), then the activities of the Subsidiary may constitute a
U.S. trade or business, or be taxed as such.

      In general, foreign corporations, such as the Subsidiary, that do not
conduct a U.S. trade or business are nonetheless subject to tax at a flat rate
of 30 percent (or lower tax treaty rate), generally payable through withholding,
on the gross amount of certain U.S.-source income that is not effectively
connected with a U.S. trade or business. There is presently no tax treaty in
force between the U.S. and the Cayman Islands that would reduce this rate of
withholding tax. It is not expected that the Subsidiary will derive income
subject to such withholding tax.

      Based, in part, on Revenue Ruling 2006-31, IRS guidance and advice of
counsel, Global Risk Allocation will seek to gain exposure to the commodity
markets primarily through investments in commodity-linked derivatives and
through investments in the Subsidiary. The use of commodity-linked derivative
instruments involves specific risks. The Prospectus, under the heading
"Additional Information about the Fund's Risks and Investments - Derivatives"
provide further information regarding commodity-linked derivative instruments,
including the risks associated with these instruments.

      Options, Futures Contracts, and Forward Foreign Currency Contracts.
Certain listed options, regulated futures contracts, and forward foreign
currency contracts are considered "section 1256 contracts" for federal income
tax purposes. Section 1256 contracts held by a 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
foreign currency contracts will be considered 60% long-term and 40% short-term
capital gain or loss. Gain or loss realized by a Fund on forward foreign
currency 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 a Fund's net investment income available to be
distributed to shareholders as ordinary income, as described above. A 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 a Fund on the lapse or sale of put and call
options on foreign currencies which are traded OTC 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 a 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 a 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 a Fund upon termination
of an option held by a Fund). In general, if a Fund exercises such an option on
a foreign currency, or if such an option that a Fund has written is exercised,
gain or loss on the option will be recognized in the same manner as if a Fund
had sold the option (or paid another person to assume a 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 OTC 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 a Fund in conjunction with any other position held by a 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 a 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 a
Fund has unrealized gains with respect to the other position in such straddle;
(ii) a 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 a 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 a 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 a Fund accrues interest or other receivables or accrues
expenses or other liabilities denominated in a foreign currency and the time a
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 a Fund's investment company taxable income available
to be distributed to its shareholders as ordinary income, rather than increasing
or decreasing the amount of a Fund's net capital gain. Because section 988
losses reduce the amount of ordinary dividends a 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 Funds 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 a 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 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 a Fund attributable to long-term and short-term capital gains
and U.S. source portfolio interest income are not subject to this withholding
tax if so designated.

      A foreign shareholder generally would be exempt from Federal income tax on
distributions of a 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 a 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
may 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 Directors, the Adviser is
responsible for the investment decisions and the placing of orders for portfolio
transactions for the Funds. 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, a 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 it is determined in
good faith that the amount of such transaction cost is reasonable in relation to
the value of brokerage, research and statistical services provided by the
executing broker.

      Neither the Funds nor the Adviser has entered into agreements or
understandings with any brokers regarding the placement of securities
transactions because of research services they provide. A broker-dealer may
provide the Adviser with research or related services with an expectation, but
not necessarily an explicit agreement or contract, that the Adviser will use the
broker-dealer to execute client transactions in the future. To the extent that
such persons or firms supply investment information to the Adviser for use in
rendering investment advice to the Funds, 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 Funds. While it is impracticable to
place an actual dollar value on such investment information, the Adviser
believes that its receipt 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) of the Securities Exchange Act of 1934, as amended,
and is designed to augment the Adviser's own internal research and investment
strategy capabilities. Research services furnished by brokers through which the
Funds effect securities transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its clients' accounts
but not all such services may be used by the Adviser in connection with a Fund.

      The extent to which commissions that will be charged by broker-dealers
selected by a 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 a Fund places portfolio transactions, the
Adviser may be relieved of expenses which it might otherwise bear. Research
services furnished by broker-dealers as a result of the placement of portfolio
transactions could be useful and of value to the Adviser in servicing its other
clients as well as the Funds; 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 servicing a Fund.

      A Fund may deal in some instances in securities which are not listed on a
national securities exchange but are traded in the OTC market. It 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 OTC or third market, the Fund will seek to deal
with the primary market makers; but when necessary in order to obtain best
execution, they will utilize the services of others. In all cases, the Fund will
attempt to negotiate best execution.

      Transactions for the Funds in fixed-income securities, including
transactions in listed securities, are executed in the OTC market by
approximately fifteen principal market maker dealers with whom the Adviser
maintains regular contact. These transactions will generally be principal
transactions at net prices and the Funds will incur little or no brokerage
costs. Where possible, securities will be purchased directly from the issuer or
from an underwriter or market maker for the securities unless the Adviser
believes a better price and execution is available elsewhere. Purchases from
underwriters of newly-issued securities for inclusion in a portfolio usually
will include a concession paid to the underwriter by the issuer and purchases
from dealers serving as market makers will include the spread between the bid
and asked price.

      The Funds' portfolio transactions in equity securities may 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 OTC markets (including most fixed-income
securities) are purchased from and sold to dealers acting as principal. OTC
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.

      Investment decisions for a 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 in accordance
with a similar strategy by the 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 a 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 for the Adviser.

      The amount of aggregate brokerage commissions paid by the Funds during the
three most recent fiscal years (or since inception), the related commissions
allocated to persons or firms because of research services provided to the Fund
or the Adviser during the most recent fiscal year and the aggregate amount of
transactions allocated to persons or firms because of research services provided
to the Fund or the Adviser during the most recent fiscal year (or since
inception) are as follows:




                                                                         Aggregate Amount of     Aggregate Brokerage
                                                                         Brokerage Transactions  Commissions Allocated
                                                                         Allocated to Persons    to Persons or Firms
                                                                         or Firms Because of     Because of Research
Fiscal Year Ended                                                        Research Services       Services Provided
October 31/                                 Amount of Aggregate          Provided to the         to the Fund
November 30         Fund                    Brokerage Commissions        Fund or the Adviser     or the Adviser
-----------         ----                    ---------------------        -------------------     ---------------------
                                                                                      

2015                Value Fund                $  326,562                $  391,498,476            $  301,003
2014                                             367,458
2013                                             426,696

2015                Discovery Value           $2,586,231                $1,792,162,346            $2,246,621
2014                                           2,929,270
2013                                           3,256,429

2015                International Value       $  527,488                $  443,514,863            $  444,742
2014                                             618,528
2013                                             792,510

2015                Growth and Income        $ 2,364,634                $3,655,080,045            $2,230,086
2014                                           1,747,038
2013                                           1,562,572

2015                Core Opportunities        $  128,194                $  228,942,211            $  117,355
2014                                             103,759
2013                                             107,623

2015                Global Risk Allocation    $  453,868                $   89,666,679            $   54,374
2014                                             501,930
2013                                             383,183

2015                Equity Income             $1,206,508                $1,581,014,070            $1,039,043
2014                                           1,365,055
2013                                           1,137,393

2015                Global Real Estate        $  293,977                $  220,602,996            $  261,558
2014                                             369,025
2013                                             485,372

2015                Small Cap Value           $      176                $   97,101,577            $  123,518

2015                All Market Income         $   12,600                $   10,727,449            $    6,401




      The Funds may, from time to time, place orders for the purchase or sale of
securities (including listed call options) with SCB & Co. and SCB Limited (a
United Kingdom broker-dealer), affiliates of the Adviser (the "Affiliated
Brokers"). In such instances, the placement of orders with the Affiliated
Brokers would be consistent with each Fund's objective of obtaining best
execution and would not be dependent upon the fact that the Affiliated Brokers
are affiliates of the Adviser. With respect to orders placed with the Affiliated
Brokers 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 Trust), 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.

      The aggregate amount of brokerage commissions paid to the Affiliated
Brokers during each Fund's three most recent fiscal years (or since inception),
and, during the most recent fiscal year (or since inception), the Affiliated
Brokers' percentage of the aggregate brokerage commissions and the aggregate
dollar amount of brokerage transactions, respectively, are set forth below:




                                               Aggregate
                                               Amount of        % of Fund's          % of Fund's Aggregate
                                               Brokerage        Aggregate            Dollar Amount of
Fiscal Year                                    Commissions      Brokerage            Brokerage Transactions
Ended                                          Paid to          Commissions Paid     Involving Payment of
October 31/                                    Affiliated       to Affiliated        Commissions Through
November 30         Fund                       Brokers          Brokers              Affiliated Brokers
-----------         ----                       -------          -------              ------------------
                                                                             

2015                Value Fund                 $    0               0%                     0%
2014                                                0
2013                                                0

2015                Discovery Value            $    0               0%                     0%
2014                                                0
2013                                                0

2015                Equity Income              $    0               0%                     0%
2014                                                0
2013                                                0

2015                International Value        $    0               0%                     0%
2014                                                0
2013                                            1,660

2015                Growth and Income          $    4               0%                     0%
2014                                            5,187
2013                                               53

2015                Core Opportunities         $    0               0%                     0%
2014                                              253
2013                                              167

2015                Global Risk Allocation     $    0               0%                     0%
2014                                                0
2013                                                0

2015                Global Real Estate         $    0               0%                     0%
2014                                            1,188
2013                                            2,626

2015                Small Cap Value            $    0               0%                     0%

2015                All Market Income          $    2             .02%                   .01%



Disclosure of Portfolio Holdings
--------------------------------

      Each 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, each 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 each 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 may post portfolio holdings information on the Adviser's website
(www.ABglobal.com). The Adviser generally posts on the website a complete
schedule of the Fund's portfolio securities, generally 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 a Fund, the market value of the Fund's holdings, and
the percentage of the Fund's assets represented by 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 10-15 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 a 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 a 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
Funds, to facilitate the review of the Funds 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 a 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 a Fund's portfolio
holdings is permitted, however, the Adviser's Chief Compliance Officer (or his
designee) 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 a Fund's portfolio
holdings information is only disclosed in accordance with these policies. Only
the Adviser's Chief Compliance Officer (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 determine that the disclosure serves a
legitimate business purpose of a Fund and is in the best interest of the Fund's
shareholders. The Adviser's Chief Compliance Officer (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 Chief Compliance Officer (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 Chief Compliance Officer (or
his designee) or another member of the compliance team reports all arrangements
to disclose portfolio holdings information to the Fund's Board 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
has been approved to receive information concerning the Funds' 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 assets of the Funds; (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 a Fund's portfolio holdings information unless specifically authorized.

--------------------------------------------------------------------------------

                              GENERAL INFORMATION

--------------------------------------------------------------------------------

The Trust
---------

      The Trust is organized as a Massachusetts business trust under the laws of
The Commonwealth of Massachusetts by an Agreement and Declaration of Trust
("Declaration of Trust") dated December 12, 2000, a copy of which is on file
with the Secretary of State of The Commonwealth of Massachusetts. The Trust is a
"series" company as described in Rule 18f-2 under the 1940 Act. On January 20,
2015, the Trust changed its name from "AllianceBernstein Trust" to "AB Trust."

      The Declaration of Trust permits the Directors to issue an unlimited
number of full and fractional shares of each series and of each class of shares
thereof. The shares of each Fund and each class thereof do not have any
preemptive rights. Upon termination of any Fund or any class thereof, whether
pursuant to liquidation of the Trust or otherwise, shareholders of that Fund or
that class are entitled to share pro rata in the net assets of that Fund or that
class then available for distribution to such shareholders.

      The Declaration of Trust provides for the perpetual existence of the
Trust. The Trust or any Fund, however, may be terminated at any time by vote of
at least two thirds of the outstanding shares of each Fund. The Declaration of
Trust further provides that the Trustees may also terminate the Trust upon
written notice to the shareholders.

      Under Massachusetts law shareholders could, under certain circumstances,
be held personally liable for the obligations of the Funds. However, the
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Funds and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Funds or
the Directors. The Declaration of Trust provides for indemnification out of a
Fund's property for all loss and expense of any shareholder of that Fund held
liable on account of being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund of which he or she was a shareholder
would be unable to meet its obligations.

ACF Funds
---------

SMALL CAP VALUE

      Small Cap Value is a series of AB Cap Fund, Inc., a Maryland Corporation.
The Fund was organized in 2014 under the name "AllianceBernstein Small Cap Value
Portfolio". The Fund changed its name to "AB Small Cap Value Portfolio" on
January 20, 2015.

ALL MARKET INCOME

      All Market Income is a series of AB Cap Fund, Inc., a Maryland
Corporation. The Fund was organized in 2014 under the name "AllianceBernstein
All Market Income Portfolio". The Fund changed its name to "AB All Market Income
Portfolio" on January 20, 2015.

The Companies
-------------

GROWTH AND INCOME

      Growth and Income was organized as a corporation in Maryland in 1932 under
the name "Dividend Shares, Inc." The Fund changed its name to "Alliance Growth
and Income Fund" on October 20, 1989, to "AllianceBernstein Growth and Income
Fund, Inc." on March 31, 2003, and to "AB Growth and Income Fund, Inc." on
January 20, 2015.

CORE OPPORTUNITIES

      Core Opportunities was incorporated under the laws of the State of
Maryland on July 6, 1999, as "Alliance Disciplined Value Fund, Inc." The Fund
changed its name to "AllianceBernstein Disciplined Value Fund, Inc." on February
28, 2001, to "AllianceBernstein Focused Growth & Income Fund, Inc." on December
15, 2004, to "AllianceBernstein Core Opportunities Fund, Inc." on March 1, 2010,
and to "AB Core Opportunities Fund, Inc." on January 20, 2015.

GLOBAL RISK ALLOCATION

      Global Risk Allocation is a Maryland corporation organized in 1932. The
Fund changed its name to "Alliance Balanced Shares" on March 10, 1987, to
"AllianceBernstein Balanced Shares, Inc." on March 31, 2003, to
AllianceBernstein Global Risk Allocation Fund, Inc. on October 5, 2012, and to
"AB Global Risk Allocation Fund, Inc." on January 20, 2015.

EQUITY INCOME

      Equity Income is a Maryland corporation organized in 1980 under the name
"Alliance Utility Income Fund, Inc." The name of the Fund became
"AllianceBernstein Utility Income Fund, Inc." on February 28, 2001. The Fund
changed its name to "AllianceBernstein Equity Income Fund, Inc." on September 1,
2010, and to "AB Equity Income Fund, Inc." on January 20, 2015.

GLOBAL REAL ESTATE

      Global Real Estate is a Maryland corporation organized in 1996 under the
name "Alliance Real Estate Investment Fund, Inc." The Fund changed its name to
"AllianceBernstein Real Estate Investment Fund, Inc." on February 28, 2001, to
"AllianceBernstein Global Real Estate Investment Fund, Inc." on March 1, 2007,
and to "AB Global Real Estate Investment Fund, Inc." on January 20, 2015.

ALL FUNDS
---------

      It is anticipated that annual shareholder meetings will not be held for
the Funds; shareholder meetings will be held only when required by federal or
state law. Shareholders have available certain procedures for the removal of
Directors.

      A shareholder will be entitled to share pro rata with other holders of the
same class of shares all dividends and distributions arising from a 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. A 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 a Fund represents an interest in the
same portfolio of investments, and 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 a Fund bears its own distribution and transfer agency expenses and
Class B 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.

Principal Holders
-----------------

      To the knowledge of each Fund, the following persons owned of record or
beneficially, 5% or more of a class of outstanding shares of the Fund as of
February 16, 2016:




                                                                            No. of                % of
Fund                  Name and Address                                      Shares                Class
----                  ----------------                                      ------                -----
                                                                                         

Value Fund            First Clearing, LLC
                      A/C 1699-0135
Class A               Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           219,736                  5.72%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                             255,791                  6.66%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          559,157                 14.56%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                210,249                  5.47%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           311,719                  8.12%

Value Fund            Charles Schwab & Co.
                      For the Exclusive Benefit of Customers
Class B               Mutual Fund Operations
                      211 Main Street
                      San Francisco, CA 94105-1905                          12,232                 12.92%
                      First Clearing, LLC
                      A/C 1699-0135
                      Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                             5,208                  5.50%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                            5,983                  6.32%

Value Fund            First Clearing, LLC
                      A/C 1699-0135
Class C               Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           101,898                  9.23%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          310,366                 28.11%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                171,174                 15.50%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                            75,385                  6.83%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Dept. Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                              76,783                  6.95%

Value Fund            American United Life Cust.
                      FBO American United Trust
Class R               Separate Accounts Administration
                      P.O. Box 368
                      Indianapolis, IN 46206-0368                           10,867                 11.37%

                      Hartford Life Insurance Company
                      Separate Account 401
                      Attn: UIT Operations
                      P.O. Box 2999
                      Hartford, CT 06104-2999                               22,261                 23.30%

                      Matrix Trust Company Cust. FBO
                      Alliant Integrators, Inc.
                      717 17th Street, Suite 1300
                      Denver, CO 80202-3304                                  5,203                  5.44%

                      Matrix Trust Company Cust. FBO Cape
                      Anesthesia & Pain Management
                      717 17th Street, Suite 1300
                      Denver, CO 80202-3304                                  6,587                  6.89%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr., East. 2nd Floor
                      Jacksonville, FL 32246-6484                           14,139                 14.80%

Value Fund            Ascensus Trust Co. LLC TTEE
                      Stepbrand Enterprises
Class K               401(k) PS Plan & Trust - #223828
                      P.O. Box 10758
                      Fargo, ND 58106-0758                                  38,821                  5.13%

                      Orchard Trust Co. LLC TTEE
                      FBO Nadler, Nadler & Burdman Co.
                      LPA MPPP & Trust
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80222-5002                     111,095                 14.68%

Value Fund            MLPF&S for the Sole Benefit of Its
                      Customers
Class I               Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          137,710                 62.92%

                      Arthur F. Grant, Beda L. Johnson Or Don
                      Taylor TTEES
                      Cadaret, Grant 401K/PSP
                      110 W. Fayette Street, Floor 5
                      Syracuse, NY 13202-1324                               74,839                 34.20%

Discovery             Charles Schwab & Co.
Value                 For the Exclusive Benefit of Customers
                      Mutual Fund Operations
Class A               211 Main Street
                      San Francisco, CA 94105-1905                       2,219,927                  8.26%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        3,503,400                 13.03%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                              2,101,777                  7.82%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                         1,686,478                  6.27%

Discovery             MLPF&S for the Sole Benefit of Its
Value                 Customers
                      Attn: Fund Admin.
Class B               4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           60,955                 21.03%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                            19,645                  6.78%

Discovery             First Clearing, LLC
Value                 A/C 1699-0135
                      Special Custody Account for the Exclusive
Class C               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           778,005                  9.15%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        2,421,785                 28.47%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                              1,045,888                 12.29%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                655,098                  7.70%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           631,623                  7.43%

Discovery             Hartford Life Insurance Company
Value                 Separate Account 401
                      Attn: UIT Operations
Class R               P.O. Box 2999
                      Hartford, CT 06104-2999                            1,503,627                 27.22%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          314,854                  5.70%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                735,200                 13.31%

                      Voya Retirement Insurance and Annuity Co.
                      Qualified Plan
                      1 Orange Way, #B3N
                      Windsor, CT 06095-4773                               358,779                  6.49%

Discovery             John Hancock Trust Company LLC
Value                 Southern California Pipe Trades Def.
                      690 Canton Street, Suite 100
Class K               Westwood, MA 02090-2324                              486,681                 14.83%

                      Nationwide Life Insurance Company
                      QPVA
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                              182,104                  5.55%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                              317,790                  9.68%

                      VRSCO
                      FBO Kelsey-Seybold Health System
                      Attn: Chris Bauman
                      2727-A Allen Parkway, 4-D1
                      Houston, TX 77019-2107                               211,084                  6.43%

Discovery             Charles Schwab & Co.
Value                 For the Exclusive Benefit of Customers
                      Mutual Fund Operations
Class I               211 Main Street
                      San Francisco, CA 94105-1905                       1,691,856                 15.25%

                      FIIOC as Agent for Certain Employee
                      Benefit Plans
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                             828,077                  7.46%

                      Matrix Trust Company as Cust. FBO
                      Paul Hastings LLP Defined Contrib.
                      P.O. Box 52129
                      Phoenix, AZ 85072-2129                             1,287,821                 11.61%

                      MG Trust Company Cust. FBO
                      United of Omaha for Various Ret. Pla.
                      717 17th Street, Suite 1300
                      Denver, CO 80202-3304                                688,603                  6.21%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          727,262                  6.56%

                      PIMS/Prudential Ret. Plan
                      Nominee Trustee Custodian
                      105 Toll Bros. 401(k) Savings Plan
                      250 Gibraltar Rd.
                      Horsham, PA 19044-2323                               944,851                  8.52%

                      Voya Institutional Trust Company
                      Qualified Plan
                      1 Orange Way, #B3N
                      Windsor, CT 06095-4773                             1,822,619                 16.43%

Discovery             MAC & Co. A/C 586347
Value                 Mutual Fund Operations
                      C/O The Bank of New York Mellon
Advisor Class         P.O. Box 3198
                      Rm. 153-3603
                      Pittsburgh, PA 15230-3198                          3,524,187                  5.88%

Discovery Value       CollegeBound Fund
                      CBF - AllianceBernstein Small Cap
Class Z               Customized Allocation 529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                            2,598,463                 20.66%

                      FIIOC As Agent For Certain Employee
                      Benefits Plans
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                           5,989,839                 47.64%

                      Voya Institutional Trust Company as
                      Trustee or Custodian for
                      Core Market Retirement Plans
                      30 Braintree Hill Office Park
                      Braintree, MA 02184-8747                           1,153,462                  9.17%

International         Hartford Life Insurance Company
Value                 Separate Account 401
                      Attn: UIT Operations
Class A               P.O. Box 2999
                      Hartford, CT 06104-2999                              879,656                  6.77%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        1,141,126                  8.79%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                660,070                  5.08%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                              1,765,881                 13.60%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           827,645                  6.37%

International         MLPF&S for the Sole Benefit of Its
Value                 Customers
                      Attn: Fund Admin.
Class B               4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           11,118                  7.33%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                 11,096                  7.31%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                            12,079                  7.96%

International         First Clearing, LLC
Value                 A/C 1699-0135
                      Special Custody Account for the Exclusive
Class C               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           313,213                  6.94%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        1,324,394                 29.35%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                765,166                 16.96%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           259,213                  5.75%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Dept. Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                             286,360                  6.35%

International         Hartford Life Insurance Company
Value                 Separate Account 401
                      Attn: UIT Operations
Class R               P.O. Box 2999
                      Hartford, CT 06104-2999                              599,474                 40.41%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          215,192                 14.50%

                      Reliance Trust Co. Custodian
                      FBO MassMutual Omnibus PPL
                      P.O. Box 48529
                      Atlanta, GA 30362-1529                               164,460                 11.09%

International         Great-West Trust Company LLC TTEE C
Value                 Minnesota Surgical Associates
                      8515 E. Orchard Road, 2T2
Class K               Greenwood Village, CO 80111-5002                      83,397                  8.66%

                      Matrix Trust Company as Trustee FBO
                      EPlan Services Group Trust
                      Bin Number 61859A
                      C/O Mutual Funds
                      P.O. Box 52129
                      Phoenix, AZ 85072-2129                                90,620                  9.41%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                              259,941                 26.99%

International         Arthur F. Grant, Beda L. Johnson or Don
Value                 Taylor TTEES
                      Cadaret, Grant 401K/PSP
Class I               110 W. Fayette St., 5th Floor
                      Syracuse, NY 13202-1324                               25,854                  9.09%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               41,339                 14.54%

                      Sanford Bernstein & Co. LLC
                      032-84727-25
                      One North Lexington Avenue
                      White Plains, NY 10601-1712                           30,728                 10.80%

                      SEI Private Trust Co.
                      C/O ID683 First Tennessee Bank
                      Attn: Mutual Funds
                      One Freedom Valley Drive
                      Oaks, PA 19456-9989                                   79,156                 27.83%

                      TD Ameritrade FBO
                      Voya Institutional Trust Co. As Cust.
                      PSP For Emp. of AllianceBernstein LP
                      FBO Kevin Simms
                      7 S. Farm Road
                      Port Washington, NY 11050-1131                        56,765                 19.96%

                      US Bank
                      FBO SD Electrical Annuity Plan
                      1555 N. Rivercenter Drive, Suite 302
                      Milwaukee, WI 53212-3958                              15,100                  5.31%

International         Charles Schwab & Co.
Value                 For the Exclusive Benefit of Customers
                      Mutual Fund Operations
Advisor Class         211 Main Street
                      San Francisco, CA 94105-1905                         345,970                  5.76%

                      First Clearing, LLC
                      A/C 1699-0135
                      Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           607,166                 10.11%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          525,068                  8.74%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                557,944                  9.29%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           729,126                 12.14%

                      Sanford Bernstein & Co. LLC
                      039-76224-16
                      1 N. Lexington Ave.
                      White Plains, NY 10601-1785                          312,190                  5.20%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd 5th Floor
                      Weehawken, NJ 07086-6761                           1,299,559                 21.64%

Growth and Income     First Clearing, LLC
                      A/C 1699-0135
Class A               Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                        17,713,794                  7.89%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                       22,854,989                 10.18%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                             11,904,450                  5.30%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                        16,620,678                  7.40%

Growth and            Pershing LLC
Income                P.O. Box 2052
                      Jersey City, NJ 07303-2052
Class B                                                                    266,641                  6.54%

Growth and            First Clearing, LLC
Income                A/C 1699-0135
                      Special Custody Account for the Exclusive
Class C               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                         3,871,451                 10.08%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL  32246-6484                       9,541,053                 24.84%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                              5,357,385                 13.95%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ  07303-2502                        2,435,046                  6.34%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                           3,121,718                  8.13%

Growth and Income     Charles Schwab Bank Cust.
                      Professional Emergency Phys. PSP
Class R               2423 East Lincoln Drive, #208770
                      Phoenix, AZ 85016-1215                               298,338                 22.29%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL  32246-6484                         296,163                 22.13%

                      Reliance Trust Co. Custodian
                      FBO MassMutual Omnibus PPL
                      P.O. Box 48529
                      Atlanta, GA 30362-1529                                99,790                  7.46%

Growth and Income     Great-West Trust Company LLC TTEE C John
                      F. Dillon & Company LLC 401K
Class K               8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      85,127                  8.38%

                      Great-West Trust Company LLC TTEE C
                      Minnesota Surgical Associates
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                     174,018                 17.13%

                      Nationwide Trust Company FSB
                      c/o IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               81,246                  8.00%

                      Voya Institutional Trust Company
                      Qualified Plan
                      1 Orange Way, #B3N
                      Windsor, CT 06095-4773                               429,842                 42.31%

Growth and            DCGT Trustee & or Custodian
Income                FBO PLIC Various Retirement Plans Omnibus
                      Attn: NPIO Trade Desk
Class I               711 High Street
                      Des Moines, IA 50392-0001                            199,841                  5.71%

                      Matrix Trust Co. Cust. FBO
                      RG Johnson Co., Inc., 401(k)
                      P.O. Box 52129
                      Phoenix, AZ 85072-2129                               390,570                 11.15%

                      Matrix Trust Company as Cust. FBO
                      Systems Alternatives International
                      P.O. Box 52129
                      Phoenix, AZ 85072-2129                               276,227                  7.89%

                      NFS LLC FEBO
                      State Street Bank Trust Co.
                      TTEE Various Retirement Plans
                      440 Mamaroneck Avenue
                      Harrison, NY 10528-2418                            1,407,945                 40.20%

                      VRSCO
                      FBO AIGFSB Custodian Trustee FBO
                      Oakwood Healthcare 403B
                      2727A Allen Pkwy # 4-D1
                      Houston, TX 77019-2107                               844,978                 24.13%

Growth and            First Clearing, LLC
Income                A/C 1699-0135
                      Special Custody Account for the Exclusive
Advisor Class         Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                         2,253,616                 12.04%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL  32246-6484                       3,384,922                 18.08%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                              4,148,945                 22.16%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ  07303-2502                        1,036,822                  5.54%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                           1,704,867                  9.11%

Growth and            CollegeBound Fund
Income                Age Based Port. 1999-2001
                      Aggressive Growth 529 Plan
Class Z               1345 Avenue of the Americas
                      New York, NY 10105-0302                           15,657,207                  7.13%

                      CollegeBound Fund
                      CBF-Aggressive Growth 2002-2004
                      529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           12,162,741                  5.54%

                      CollegeBound Fund
                      CBF-Aggressive Growth 2005-2007
                      529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           11,421,362                  5.20%

                      CollegeBound Fund
                      CBF-Balanced Portfolio
                      529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           12,822,813                  5.84%

                      CollegeBound Fund
                      CBF-Growth & Income
                      Customized Portfolio 529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           24,566,497                 11.18%

                      CollegeBound Fund
                      CBF-Growth Portfolio
                      529 Plan
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           65,474,085                 29.80%

                      CollegeBound Fund
                      Growth Emphasis
                      Age Based Portfolio 1999-2001
                      1345 Avenue of the Americas
                      New York, NY 10105-0302                           11,564,078                  5.26%

Core Opportunities    First Clearing, LLC
                      A/C 1699-0135
Class A               Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           343,481                  5.65%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                             415,631                  6.84%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          624,792                 10.28%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                399,964                  6.58%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           684,524                 11.26%

Core Opportunities    Ascensus Trust Company
                      David Heating & Cooling, Inc. NDFI
Class B               Stephen T. Allison
                      42 Orchard St.
                      Merrimac, MA 01860-1812                                8,507                  5.33%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           11,917                  7.46%

Core                  First Clearing, LLC
Opportunities         A/C 1699-0135
                      Special Custody Account for the Exclusive
Class C               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           219,745                 10.81%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          419,320                 20.62%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                162,882                  8.01%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                162,448                  7.99%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           305,920                 15.05%

                      Raymond James
                      Omnibus for Mutual Funds
                      House Account Firm 92500015
                      Attn: Courtney Waller
                      880 Carillon Parkway
                      St. Petersburg, FL 33716-1102                        138,518                  6.81%

Core                  American United Life Cust. FBO
Opportunities         American United Trust
                      Separate Accounts Administration
Class R               P.O. Box 368
                      Indianapolis, IN 46206-0368                           29,383                 14.54%

                      American United Life Cust. FBO
                      AUL American Group Retirement Annuity
                      Separate Accounts Administration
                      P.O. Box 368
                      Indianapolis, IN 46206-0368                           37,996                 18.80%

                      Christina Pfleider & Tom Pfleider T FBO
                      Meta Dynamic Inc. 401(k) PSP
                      C/O Fascore LLC
                      8515 E. Orchard Rd., 2T2
                      Greenwood Village, CO 80111-5002                      17,224                  8.52%

                      Mid Atlantic Trust Co. FBO
                      Gates Realty Corp. 401K PSP
                      1251 Waterfront Place, Suite 525
                      Pittsburgh, PA 15222-4228                             11,533                  5.71%

                      MG Trust Co. Cust. FBO
                      Mechanical Contractors Assoc. 401(k) Plan
                      717 17th Street, Suite 1300
                      Denver, CO 80202-3304                                 16,871                  8.35%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           26,540                 13.13%

Core Opportunities    Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
Class K               P.O. Box 182029
                      Columbus, OH 43218-2029                              156,387                 82.06%

Core                  Mid Atlantic Trust Company FBO
Opportunities         Storage Development Inc. 401(k) Prof.
                      1251 Waterfront Place, Suite 525
Class I               Pittsburgh, PA 15222-4228                              2,834                  6.60%

                      Nationwide Trust Co. FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               13,859                 32.30%

                      NFS LLC FEBO
                      FIIOC Agent FBO
                      Qualified Employee
                      Plans (401K) FINOPS-IC Funds
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                              11,863                 27.65%

                      TD Ameritrade FBO
                      Voya Institutional Trust Co. as Cust.
                      PSP For Emp. of AllianceBernstein LP
                      FBO Frank Caruso
                      313 Port Washington Blvd
                      Port Washington, NY 11050-4548                        10,897                 25.39%

Core Opportunities    First Clearing, LLC
                      A/C 1699-0135
Advisor Class         Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           128,436                 20.67%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                              63,580                 10.23%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                 91,328                 14.70%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                            66,316                 10.67%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd, 5th Floor
                      Weehawken, NJ 07086-6761                              55,242                  8.89%

Core Opportunities    FIIOC FBO
                      Kroeschell, Inc. Contributory Profit
Class Z               Sharing /401(k) Plan
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                              14,345                 64.43%

                      Saxon & Co.
                      FBO 20-01-302-9912426
                      VI Omnibus A/C VICA
                      P.O. Box 7780-1888
                      Philadelphia, PA 19182-0001                            7,918                 35.56%

Global Risk           First Clearing, LLC
Allocation            A/C 1699-0135
                      Special Custody Account for the Exclusive
Class A               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                         1,042,063                  6.22%

                      JP Morgan Clearing Corp. Omni Acct.
                      For the Exclusive Benefit of Customers
                      3 Chase Metrotech Center
                      3rd Floor, Mutual Fund Department
                      Brooklyn, NY 11245-0001                            1,266,576                  7.56%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        1,944,293                 11.61%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                         1,530,706                  9.14%

Global Risk           JP Morgan Clearing Corp. Omni Acct.
Allocation            For the Exclusive Benefit of Customers
                      3 Chase Metrotech Center
Class B               3rd Floor, Mutual Fund Department
                      Brooklyn, NY 11245-0001                               27,255                  7.14%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           33,421                  8.75%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                            31,631                  8.28%

Global Risk           Charles Schwab & Co.
Allocation            For the Exclusive Benefit of Customers
                      Mutual Fund Operations
Class C               211 Main Street
                      San Francisco, CA 94105-1905                         199,263                  5.80%

                      First Clearing, LLC
                      A/C 1699-0135
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           413,365                 12.04%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          689,579                 20.09%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                352,568                 10.27%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           213,693                  6.22%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Boulevard, 5th Floor
                      Weehawken, NJ 07086-6761                             220,108                  6.41%

Global Risk           Hartford Life Insurance Company
Allocation            Separate Account 401
                      Attn: UIT Operations
Class R               P.O. Box 2999
                      Hartford, CT 06104-2999                               54,030                 20.07%

                      Mid Atlantic Trust Co. FBO
                      Pikus Concrete & Construction 401(k)
                      1251 Waterfront Place, Suite 525
                      Pittsburgh, PA 15222-4228                             22,894                  8.50%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           20,603                  7.65%

                      Reliance Trust Co.
                      FBO NME3 LLC
                      P.O. Box 48529
                      Atlanta, GA 30362-1529                                82,501                 30.65%

                      TD Ameritrade Trust Company
                      CO# 00LCE
                      P.O. Box 17748
                      Denver, CO 80217-0748                                 26,785                  9.95%

Global Risk           Great-West Trust Company LLC TTEE F
Allocation            Employee Benefits Clients 401K
                      8515 E. Orchard Road, 2T2
Class K               Greenwood Village, CO 80111-5002                      10,599                  8.21%

                      Great-West Trust Company LLC TTEE C
                      Miller, Shpiece & Tischler PC RSP
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                       8,593                  6.65%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               54,513                 42.21%

                      VRSCO
                      Attn: Chris Bauman
                      2727-A Allen Parkway
                      Houston, TX 77019-2107                                17,514                 13.56%

Global Risk           FIIOC FBO
Allocation            Brewster Cheese Company
                      401(k) Profit Sharing Plan
Class I               100 Magellan Way KWIC
                      Covington, KY 41015-1987                              53,601                 65.77%

                      FIIOC FBO
                      Toyota Material Handling Midwest Inc. DBA
                      Prolift Industrial
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                              11,365                 13.95%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               14,386                 17.65%

Global Risk           Great-West Trust Company LLC TTEE C FBO:
Allocation            College of Westchester Business School
                      401K
Advisor Class         C/O Fascore LLC
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      74,456                  5.99%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                149,219                 12.01%

                      NFS LLC FBO
                      Richard S. Levy
                      Barbara G. Levy
                      20 Ocean Park Blvd., Unit 20
                      Santa Monica, CA 90405-3557                           67,100                  5.40%

                      Providence Ear Nose & Throat Assoc. Inc.
                      401K PS Plan
                      Steven W. Fisher TTEE
                      2112 Providence Avenue
                      Chester, PA 19013-5507                               156,036                 12.56%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                             239,376                 19.27%

Equity Income         First Clearing, LLC
                      A/C 1699-0135
Class A               Special Custody Account for the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                         1,346,064                  9.37%

                      JP Morgan Clearing Corp. Omni Acct.
                      For the Exclusive Benefit of Customers
                      3 Chase Metrotech Center
                      3rd Floor, Mutual Fund Department
                      Brooklyn, NY 11245-0001                              993,841                  6.92%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                             828,056                  5.76%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                        1,380,044                  9.60%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                              1,051,851                  7.32%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                         2,007,881                 13.97%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                768,033                  5.35%

Equity Income         MLPF&S For the Sole Benefit of Its
                      Customers
Class B               Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                           23,889                 16.36%

                      National Financial Services LLC
                      For the Exclusive Benefit
                      Of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                 13,187                  9.03%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                             8,280                  5.67%

Equity Income         Capital Bank & Trust Company
                      TTEE F
Class R               Ashok & Yogini Kathari PSP 401K
                      8515 E. Orchard Rd., 2T2
                      Greenwood Village, CO 80111-5002                      45,689                  6.79%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                249,598                 37.10%

                      Voya Retirement Insurance and Annuity Co.
                      Qualified Plan
                      1 Orange Way, #B3N
                      Windsor, CT 06095-4773                                75,984                 11.29%

Equity Income         Great-West Trust Company LLC TTEE C
                      Digestive Healthcare of Georgia PC
Class K               8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      17,958                  8.71%

                      Great-West Trust Co. LLC TTEE
                      FBO Kayne & Tuckman DDS
                      401(k) Profit Sharing Plan
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      12,928                  6.27%

                      Great-West Trust Company LLC TTEE FBO
                      Richardson Kontogouris Emerson LLP 401K
                      Plan
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      20,933                 10.15%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      P.O. Box 182029
                      Columbus, OH 43218-2029                               75,946                 36.81%

Equity Income         Ascensus Trust Company C/F
                      401(k) Plan for the Salaried Employ.
Class I               216612
                      P.O. Box 10758
                      Fargo, ND 58106-0758                                   7,904                  6.95%

                      Emjay Corporation Custodian FBO
                      Plans of Great West Financial
                      8515 E. Orchard Road, 2T2
                      Greenwood VLG, CO 80111-5002                          11,769                 10.36%

                      Lincoln Retirement Services Co.
                      FBO Austin Travis County M H M R
                      P.O. Box 7876
                      Fort Wayne, IN 46801-7876                             26,568                 23.38%

                      Lincoln Retirement Services Co.
                      FBO Austin Travis County M H M R
                      P.O. Box 7876
                      Fort Wayne, IN 46801-7876                             23,336                 20.53%

                      Nationwide Trust Company FSB
                      C/O IPO Portfolio Accounting
                      PO Box 182029
                      Columbus, OH 43218-2029                               12,043                 10.60%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                 11,623                 10.23%

                      TD Ameritrade FBO
                      Voya Institutional Trust Co. as Cust.
                      PSP for Emp. of AllianceBernstein LP
                      FBO William Marsalise
                      23 Woodvale Dr.
                      Syosset, NY 11791-1213                                 9,325                  8.21%

Equity Income         First Clearing, LLC
                      A/C 1699-0135
Advisor Class         Special Custody Account For the Exclusive
                      Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           960,813                 10.03%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          843,083                  8.80%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                         1,236,831                 12.91%

                      PIMS/Prudential Retirement Plan as
                      Nominee for TTEE/Cust. PL 005
                      NYC Health + Hospitals TDA
                      55 Water Street
                      New York, NY 10041-0004                            1,839,837                 19.20%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Dept. Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                             479,668                  5.01%

Equity Income         FIIOC FBO
                      Nanometrics Incorporated 401(k) Plan And
Class Z               Trust
                      100 Magellan Way KWIC
                      Covington, KY 41015-1987                              29,471                 38.12%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                 10,527                 13.62%

                      Voya Retirement Insurance and Annuity Co.
                      Qualified Plan
                      1 Orange Way, #B3N
                      Windsor, CT 06095-4773                                37,317                 48.27%

Global Real           First Clearing, LLC
Estate                A/C 1699-0135
                      Special Custody Account For the Exclusive
Class A               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           319,896                  5.87%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                             459,781                  8.43%

                      MLPF&S for the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          605,343                 11.10%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd., 4th Floor
                      Jersey City, NJ 07310                                894,057             16.40%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           295,979                  5.43%

Global Real           MLPF&S for the Sole Benefit of Its
Estate                Customers
                      Attn: Fund Admin.
Class B               4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                            4,486                  5.70%

                      Raymond James
                      Omnibus for Mutual Funds
                      House Account Firm 92500015
                      Attn: Courtney Waller
                      880 Carillon Parkway
                      St. Petersburg, FL 33716-1102                          4,226                  5.37%

Global Real           First Clearing, LLC
Estate                A/C 1699-0135
                      Special Custody Account for the Exclusive
Class C               Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                            94,502                  6.24%

                      MLPF&S For the Sole Benefit of Its
                      Customers
                      Attn: Fund Admin.
                      4800 Deer Lake Dr. East, 2nd Floor
                      Jacksonville, FL 32246-6484                          266,055                 17.56%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                235,299                 15.53%

                      National Financial Services LLC
                      For the Exclusive Benefit of Our
                      Customers
                      Attn: Mutual Funds Dept.
                      499 Washington Blvd, 4th Floor
                      Jersey City, NJ 07310                                 76,002                  5.02%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           296,430                 19.56%

Global Real           Ascensus Trust Company C/F
Estate                Nagel Precision Inc. PS 401(k) Plan
                      710910
Class R               P.O. Box 10758
                      Fargo, ND 58106-0758                                  34,943                  5.21%

                      Reliance Trust Co. Custodian
                      FBO MassMutual Omnibus PPL
                      PO Box 48529
                      Atlanta, GA 30362-1529                                69,205                 10.32%

                      State Street Bank and Trust as TTEE And/or
                      Cust. FBO ADP Access Product
                      1 Lincoln Street
                      Boston, MA 02111-2901                                183,203                 27.33%

Global Real           Great-West Trust Company LLC TTEE C
Estate                Tristate HVAC Equipment LLP 401K
                      8515 E. Orchard Road, 2T2
Class K               Greenwood Village, CO 80111-5002                      48,240                  6.43%

                      Orchard Trust Co. LLC TTEE
                      FBO Nadler, Nadler & Burdman Co.
                      LPA MPPP & Trust
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      48,613                  6.48%

Global Real           CBNA Cust. FBO Gen'l. Church of New
Estate                Jerusalem DB
                      6 Rhoads Dr., Ste. 7
Class I               Utica, NY 13502-6317                                  91,914                 29.15%

                      Great-West Trust Company LLC TTEE C Webcor
                      Builders 401K PSP
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      87,437                 27.73%

                      Great-West Trust Company LLC TTEE F
                      Employee Benefits Clients 401(k)
                      8515 E. Orchard Road, 2T2
                      Greenwood Village, CO 80111-5002                      46,622                 14.78%

                      Matrix Trust Company as Trustee FBO C/F
                      Bowie Gridley Architects 401(k)
                      P.O. Box 52129
                      Phoenix, AZ 85072-2129                                23,059                  7.31%

                      MG Trust Company Cust FBO
                      Perfection Servo Hydraulics Inc. 4
                      717 17th Street, Suite 1300
                      Denver, CO 80202-3304                                 17,081                  5.42%

Global Real           First Clearing, LLC
Estate                A/C 1699-0135
                      Special Custody Account for the Exclusive
Advisor Class         Benefit of Customer
                      2801 Market Street
                      Saint Louis, MO 63103-2523                           280,789                 14.19%

                      FNB Nominee Co.
                      C/O 1st Commonwealth Trust Co.
                      614 Philadelphia St.
                      Indiana, PA 15701-3904                               107,479                  5.43%

                      LPL Financial
                      Omnibus Customer Account
                      Attn: Mutual Fund Trading
                      4707 Executive Dr.
                      San Diego, CA 92121-3091                             348,762                 17.62%

                      Morgan Stanley Smith Barney
                      Harborside Financial Center
                      Plaza II, 3rd Floor
                      Jersey City, NJ 07311                                208,081                 10.51%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                           180,826                  9.14%

                      UBS WM USA
                      0O0 11011 6100
                      Omni Account M/F
                      Attn: Department Manager
                      1000 Harbor Blvd., 5th Floor
                      Weehawken, NJ 07086-6761                             441,479                 22.31%

Small Cap Value       AllianceBernstein L.P.
                      Attn: Brent Mather-Seed Account
Class C               1 N. Lexington Ave.
                      White Plains, NY 10601-1712                            1,002                 30.62%

                      Ascensus Trust Company
                      C/F Edward E. Fralick IRA
                      13139 Red Creek Rd.
                      Red Creek, NY 13143-3155                                 569                 17.38%

                      Ascensus Trust Company
                      C/F Rita M. Moravek
                      Roth IRA
                      1521 Emerson Ave.
                      Alliance, NE 69301-2443                                  463                 14.14%

                      Ascensus Trust Company
                      C/F Robert R. Moravek
                      Roth IRA
                      1521 Emerson Ave.
                      Alliance, NE 69301-2443                                  464                 14.19%

                      Ascensus Trust Company
                      FBO Jon Klatt Roth IRA
                      1109 SE Michael Dr.
                      Ankey, IA 50021-3825                                     407                 12.43%

                      Vivian L. Shie TOD/DE
                      56 Mohawk Dr.
                      Acton, MA 01720-2335                                     366                 11.18%

Small Cap Value       Sanford Bernstein & Co. LLC
                      032-85416-10
Advisor Class         1 N. Lexington Ave.
                      White Plains, NY 10601-1712                           29,029                 12.90%

                      Sanford Bernstein & Co. LLC
                      032-85512-21
                      1 N. Lexington Ave.
                      White Plains, NY 10601-1712                           13,010                  5.78%

All Market Income     AllianceBernstein L.P.
                      Attn: Brent Mather-Seed Account
Class A               1 N. Lexington Ave.
                      White Plains, NY 10601-1712                            1,001                 54.48%

                      Ascensus Trust Company
                      C/F Dean H. Jensen Roth IRA
                      405 Liguori Rd.
                      Edgerton, WI 53534-9339                                  313                 17.05%

                      Pershing LLC
                      P.O. Box 2052
                      Jersey City, NJ 07303-2052                               522                 28.41%

All Market Income     AllianceBernstein L.P.
                      Attn: Brent Mather-Seed Account
Class C               1 N. Lexington Ave.
                      White Plains, NY 10601-1712                            1,001                 99.98%

All Market Income     AllianceBernstein L.P.
                      Attn: Brent Mather-Seed Account
Advisor Class         1 N. Lexington Ave.
                      White Plains, NY 10601-1712                        1,800,477                 97.35%



Custodian and Accounting Agent
------------------------------

      State Street Bank and Trust Company ("State Street"), c/o State Street
Corporation CCB/5, 1 Iron Street, Boston, MA 02210, acts as the custodian for
the assets of Value Fund, Discovery Value, International Value, Growth and
Income, Core Opportunities, Global Risk Allocation, Equity Income, Small Cap
Value and All Market Income and as their accounting agent but plays no part in
deciding the purchase or sale of portfolio securities. Subject to the
supervision of each Fund's Directors, State Street may enter into sub-custodial
agreements for the holding of each Fund's foreign securities.

      Brown Brothers Harriman & Co. ("Brown Brothers"), 50 Post Office Square,
Boston, MA 02110, acts as the custodian for the assets of Global Real Estate
Investment Fund and as its accounting agent but plays no part in deciding the
purchase or sale of portfolio securities. Subject to the supervision of the
Fund's Directors, Brown Brothers 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, NY 10105, is the Funds' Principal Underwriter
and as such may solicit orders from the public to purchase shares of the Funds.
Under the Distribution Services Agreement, each 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 the Funds
offered hereby are passed upon by Seward & Kissel LLP, 901 K Street NW, Suite
800, Washington, DC 20001.

Independent Registered Public Accounting Firm
---------------------------------------------

      Ernst & Young LLP, 5 Times Square, New York, NY 10036, has been appointed
as the independent registered public accounting firm for each of the Funds.

Code of Ethics and Proxy Voting Policies and Procedures
-------------------------------------------------------

      The Funds, 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 a Fund.

      The Funds have adopted the Adviser's proxy voting policies and procedures.
A description of the Adviser's proxy voting policies and procedures is attached
as Appendix A.

      Information regarding how each Fund voted proxies related to portfolio
securities during the most recent 12-month period ended June 30, 2014 is
available (i) without charge, upon request, by calling (800) 227-4618; or on or
through the Funds' website at www.ABglobal.com; or both; and (ii) on the SEC's
website at www.sec.gov.

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 Funds with the SEC under the Securities
Act. Copies of the Registration Statement may be obtained at a reasonable charge
from the SEC or may be examined, without charge, at the offices of the SEC in
Washington, D.C., or on the internet at www.ABglobal.com




--------------------------------------------------------------------------------

                            FINANCIAL STATEMENTS AND
            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

--------------------------------------------------------------------------------

      The financial statements of each of Value Fund, Discovery Value,
International Value, Core Opportunities, Global Real Estate, Global Risk
Allocation, Equity Income, Small Cap Value and All Market Income for the fiscal
year ended November 30, 2015 and the reports of Ernst & Young LLP, independent
registered public accounting firm, are incorporated herein by reference to each
Fund's annual report. The annual report for each Fund was filed on Form N-CSR
with the SEC on February 3, 2016. The financial statements of Growth and Income
for the fiscal year ended October 31, 2015 and the report of Ernst & Young LLP,
independent registered public accounting firm, are incorporated herein by
reference to the Fund's annual report. The annual report for the Fund was filed
on Form N-CSR with the SEC on January 8, 2016. Each Fund's annual report is
available without charge upon request by calling ABIS at (800) 227-4618 or on
the Internet at www.ABglobal.com.




                                                                      Appendix A


[A/B]
LOGO


                         Proxy Voting Policy Statement

Introduction

As an investment adviser, we are shareholder advocates and have a fiduciary duty
to make investment decisions that are in our clients' best interests by
maximizing the value of their shares. Proxy voting is an integral part of this
process, through which we support strong corporate governance structures,
shareholder rights and transparency.

We have an obligation to vote proxies in a timely manner and we apply the
principles in our Proxy Voting Policy ("Proxy Voting Policy" or "Policy") and
this policy statement to our proxy decisions. We believe a company's
environmental, social and governance ("ESG") practices may have a significant
effect on the value of the company, and we take these factors into consideration
when voting. For additional information regarding our ESG policies and
practices, please refer to our firm's Statement of Policy Regarding Responsible
Investment ("RI Policy").

Our Proxy Voting Policy, which outlines our policies for proxy voting and
includes a wide range of issues that often appear on proxies, applies to all of
AB's investment management subsidiaries and investment services groups investing
on behalf of clients globally. Both this Statement and the Policy are intended
for use by those involved in the proxy voting decision-making process and those
responsible for the administration of proxy voting ("Proxy Managers"), in order
to ensure that our proxy voting policies and procedures are implemented
consistently. Copies of the Policy, the RI Policy and our voting records, as
noted below in "Voting Transparency", can be found on our Internet site
(www.abglobal.com).

We sometimes manage accounts where proxy voting is directed by clients or
newly-acquired subsidiary companies. In these cases, voting decisions may
deviate from the Policy.

Research Underpins Decision Making

As a research-driven firm, we approach our proxy voting responsibilities with
the same commitment to rigorous research and engagement that we apply to all of
our investment activities. The different investment philosophies utilized by our
investment teams may occasionally result in different conclusions being drawn
regarding certain proposals and, in turn, may result in the Proxy Manager making
different voting decisions on the same proposal. Nevertheless, the Proxy Manager
votes proxies with the goal of maximizing the value of the securities in client
portfolios.

In addition to our firm-wide proxy voting policies, we have a Proxy Committee,
which provides oversight and includes senior investment professionals from
Equities, Legal personnel and Operations personnel. It is the responsibility of
the Proxy Committee to evaluate and maintain proxy voting procedures and
guidelines, to evaluate proposals and issues not covered by these guidelines, to
consider changes in policy, and to review this Statement and the Policy no less
frequently than annually. In addition, the Proxy Committee meets at least three
times a year and as necessary to address special situations.

Research Services

We subscribe to the corporate governance and proxy research services of
Institutional Shareholder Services ("ISS"). All our investment professionals can
access these materials via the Proxy Manager and/or Proxy Committee.

Engagement

In evaluating proxy issues and determining our votes, we welcome and seek out
the points of view of various parties. Internally, the Proxy Manager may consult
the Proxy Committee, Chief Investment Officers, Directors of Research, and/or
Research Analysts across our equities platforms, and Portfolio Managers in whose
managed accounts a stock is held. Externally, we may engage with companies in
advance of their Annual General Meeting, and throughout the year. We believe
engagement provides the opportunity to share our philosophy, our corporate
governance values, and more importantly, affect positive change. Also, these
meetings often are joint efforts between the investment professionals, who are
best positioned to comment on company-specific details, and the Proxy
Manager(s), who offer a more holistic view of governance practices and relevant
trends. In addition, we engage with shareholder proposal proponents and other
stakeholders to understand different viewpoints and objectives.

Proxy Voting Guidelines

Our proxy voting guidelines are both principles-based and rules-based. We adhere
to a core set of principles that are described in the Proxy Voting Policy. We
assess each proxy proposal in light of these principles. Our proxy voting
"litmus test" will always be what we view as most likely to maximize long-term
shareholder value. We believe that authority and accountability for setting and
executing corporate policies, goals and compensation generally should rest with
the board of directors and senior management. In return, we support strong
investor rights that allow shareholders to hold directors and management
accountable if they fail to act in the best interests of shareholders.

Our proxy voting guidelines pertaining to specific issues are set forth in the
Policy and include guidelines relating to board and director proposals,
compensation proposals, capital changes and anti-takeover proposals, auditor
proposals, shareholder access and voting proposals, and environmental, social
and disclosure proposals. The following are examples of specific issues within
each of these broad categories:

Board and Director Proposals:
-----------------------------
Election of Directors The election of directors is an important vote. We expect
directors to represent shareholder interests at the company and maximize
shareholder value. We generally vote in favor of the management-proposed slate
of directors while considering a number of factors, including local market best
practice. We believe companies should have a majority of independent directors
and independent key committees. However, we will incorporate local market
regulation and corporate governance codes into our decision making. We may
support more progressive requirements than those implemented in a local market
if we believe more progressive requirements may improve corporate governance
practices. We will generally regard a director as independent if the director
satisfies the criteria for independence (i) espoused by the primary exchange on
which the company's shares are traded, or (ii) set forth in the code we
determine to be best practice in the country where the subject company is
domiciled. We consider the election of directors who are "bundled" on a single
slate on a case-by-case basis considering the amount of information available
and an assessment of the group's qualifications.

Compensation Proposals: Approved Remuneration Reports and Policies
------------------------------------------------------------------
In certain markets, (e.g., Australia, Canada, Germany and the United States),
publicly traded issuers are required by law to submit their company's
remuneration report to a non-binding shareholder vote. The report contains,
among other things, the nature and amount of the compensation of the directors
and certain executive officers as well as a discussion of the company's
performance. In other markets, remuneration policy resolutions are binding.

We evaluate remuneration reports and policies on a case-by-case basis, taking
into account the reasonableness of the company's compensation structure and the
adequacy of the disclosure. Where a company permits retesting of
performance-based awards in its compensation plan, we will evaluate the specific
terms of the plan, including the volatility of the industry and the number and
duration of the retests, before determining whether or not to support the
company's remuneration report. We may abstain or vote against a report if
disclosure of the remuneration details is inadequate or the report is not
provided to shareholders with sufficient time prior to the meeting to consider
its terms.

In markets where remuneration reports are not required for all companies, we
will support shareholder proposals asking the board to adopt a policy (i.e.,
"say on pay") that the company's shareholders be given the opportunity to vote
on an advisory resolution to approve the compensation committee's report.
Although say on pay votes are by nature only broad indications of shareholder
views, they do lead to more compensation-related dialogue between management and
shareholders and help ensure that management and shareholders meet their common
objective: maximizing the value of the company.

Capital Changes and Anti-Takeover Proposals: Authorize Share Repurchase
-----------------------------------------------------------------------
We generally support share repurchase proposals that are part of a
well-articulated and well-conceived capital strategy. We assess proposals to
give the board unlimited authorization to repurchase shares on a case-by-case
basis. Furthermore, we would generally support the use of derivative instruments
(e.g., put options and call options) as part of a share repurchase plan absent a
compelling reason to the contrary. Also, absent a specific concern at the
company, we will generally support a repurchase plan that could be continued
during a takeover period.

Auditor Proposals: Appointment of Auditors
------------------------------------------
We believe that the company is in the best position to choose its accounting
firm, and we generally support management's recommendation.

We recognize that there may be inherent conflicts when a company's independent
auditors perform substantial non-audit related services for the company.
Therefore, in reviewing a proposed auditor, we will consider the amount of fees
paid for non-audit related services performed compared to the total audit fees
paid by the company to the auditing firm, and whether there are any other
reasons for us to question the independence or performance of the firm's auditor
such as, for example, tenure. We generally will deem as excessive the non-audit
fees paid by a company to its auditor if those fees account for 50% or more of
total fees paid. In the UK market, which utilizes a different standard, we
adhere to a non-audit fee cap of 100% of audit fees. Under these circumstances,
we generally vote against the auditor and the directors, in particular the
members of the company's audit committee. In addition, we generally vote against
authorizing the audit committee to set the remuneration of such auditors. We
exclude from this analysis non-audit fees related to IPOs, bankruptcy emergence,
and spin-offs and other extraordinary events. We may vote against or abstain due
to a lack of disclosure of the name of the auditor while taking into account
local market practice.

Shareholder Access and Voting Proposals:  Proxy Access for Annual Meetings
These proposals allow "qualified shareholders" to nominate directors. We
generally vote in favor of management and shareholder proposals for proxy access
that employ guidelines reflecting the SEC framework for proxy access (adopted by
the US Securities and Exchange Commission ("SEC") in 2010, but vacated by the DC
Circuit Court of Appeals in 2011), which would have allowed a single
shareholder, or group of shareholders, who hold at least 3% of the voting power
for at least three years continuously to nominate up to 25% of the current board
seats, or two directors, for inclusion in the subject company's annual proxy
statement alongside management nominees.

We will generally vote against proposals that use requirements that are stricter
than the SEC's framework and against individual board members, or entire boards,
who exclude from their ballot properly submitted shareholder proxy access
proposals or include their own competing, more strict, proposals on the same
ballot.

We will evaluate on a case-by-case basis proposals with less stringent
requirements than the vacated SEC framework.

From time to time we may receive requests to join with other shareholders to
support a shareholder action. We may, for example, receive requests to join a
voting block for purposes of influencing management. If the third parties
requesting our participation are not affiliated with us and have no business
relationships with us, we will consider the request on a case-by-case basis.
However, where the requesting party has a business relationship with us (e.g.,
the requesting party is a client or a significant service provider), agreeing to
such a request may pose a potential conflict of interest. As a fiduciary we have
an obligation to vote proxies in the best interest of our clients (without
regard to our own interests in generating and maintaining business with our
other clients) and given our desire to avoid even the appearance of a conflict,
we will generally decline such a request.

Environmental, Social and Disclosure Proposals: Lobbying and Political Spending
-------------------------------------------------------------------------------
We generally vote in favor of proposals requesting increased disclosure of
political contributions and lobbying expenses, including those paid to trade
organizations and political action committees, whether at the federal, state, or
local level. These proposals may increase transparency.

We generally vote proposals in accordance with these guidelines but, consistent
with our "principles-based" approach to proxy voting, we may deviate from the
guidelines if warranted by the specific facts and circumstances of the situation
(i.e., if, under the circumstances, we believe that deviating from our stated
policy is necessary to help maximize long-term shareholder value). In addition,
these guidelines are not intended to address all issues that may appear on all
proxy ballots. Proposals not specifically addressed by these guidelines, whether
submitted by management or shareholders, will be evaluated on a case-by-case
basis, always keeping in mind our fiduciary duty to make voting decisions that,
by maximizing long-term shareholder value, are in our clients' best interests.

Conflicts of Interest

As a fiduciary, we always must act in our clients' best interests. We strive to
avoid even the appearance of a conflict that may compromise the trust our
clients have placed in us, and we insist on strict adherence to fiduciary
standards and compliance with all applicable federal and state securities laws.
We have adopted a comprehensive Code of Business Conduct and Ethics ("Code") to
help us meet these obligations. As part of this responsibility and as expressed
throughout the Code, we place the interests of our clients first and attempt to
avoid any perceived or actual conflicts of interest.

We recognize that there may be a potential material conflict of interest when we
vote a proxy solicited by an issuer that sponsors a retirement plan we manage
(or administer), that distributes AB-sponsored mutual funds, or with which we or
one or more of our employees have another business or personal relationship that
may affect how we vote on the issuer's proxy. Similarly, we 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. In order to avoid any
perceived or actual conflict of interest, we have established procedures for use
when we encounter a potential conflict to ensure that our voting decisions are
based on our clients' best interests and are not the product of a conflict.
These procedures include compiling a list of companies and organizations whose
proxies may pose potential conflicts of interest (e.g., if such company is our
client) and reviewing our proposed votes for these companies and organizations
in light of the Policy and ISS's recommendations. If our proposed vote is
contrary to, or not contemplated in, the Policy, is consistent with a client's
position and is contrary to ISS's recommendation, we refer to proposed vote to
our Independent Compliance Officer for his determination.

In addition, our Proxy Committee takes reasonable steps to verify that ISS
continues to be independent, including an annual review of ISS's conflict
management procedures. When reviewing these conflict management procedures, we
consider, among other things, whether ISS (i) has the capacity and competency to
adequately analyze proxy issues; and (ii) can offer research in an impartial
manner and in the best interests of our clients.

Voting Transparency

We publish our voting records on our Internet site (www.abglobal.com) quarterly,
30 days after the end of the previous quarter. Many clients have requested that
we provide them with periodic reports on how we voted their proxies. Clients may
obtain information about how we voted proxies on their behalf by contacting
their Advisor. Alternatively, clients may make a written request to the Chief
Compliance Officer.

Recordkeeping

All of the records referenced in our Policy will be kept in an easily accessible
place for at least the length of time required by local regulation and custom,
and, if such local regulation requires that records are kept for less than five
years from the end of the fiscal year during which the last entry was made on
such record, we will follow the U.S. rule of five years. We maintain the vast
majority of these records electronically. We will keep paper records, if any, in
one of our offices for at least two years.