AB Cap Fund, Inc.

N-CSR 1 d210695dncsr.htm AB CAP FUND, INC. AB Cap Fund, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-01716

AB CAP FUND, INC.

(Exact name of registrant as specified in charter)

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: June 30, 2016

Date of reporting period: June 30, 2016

ITEM 1.

REPORTS TO STOCKHOLDERS.

JUN^06.30.16

LOGO

ANNUAL REPORT

AB CONCENTRATED GROWTH FUND

Investment Products Offered

• Are Not FDIC Insured

• May Lose Value

• Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AB’s website at www.abfunds.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AB at (800) 227-4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. AB publishes full portfolio holdings for the Fund monthly at www.abfunds.com.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AB family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the Adviser of the funds.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein^® is a registered service mark used by permission of the owner, AllianceBernstein L.P.

August 5, 2016

Annual Report

This report provides management’s discussion of fund performance for AB Concentrated Growth Fund (the “Fund”), for the annual reporting period ended June 30, 2016. Effective as of the close of business on February 28, 2014, the W.P. Stewart Growth Fund, Inc. (the “Predecessor Fund”) was converted into the Fund and the Predecessor Fund’s shares were converted into Advisor Class shares of the Fund. The inception date for Class A, C, R, K, I and Z shares is February 28, 2014. The inception date of the Predecessor Fund is February 28, 1994.

Investment Objective and Policies

The Fund’s investment objective is to earn capital gains. AllianceBernstein L.P. (the “Adviser”) seeks to achieve the Fund’s investment objective of capital gains (i.e., growth in the value of the Fund’s shares) by investing primarily in common stocks of listed US companies. The Adviser employs an appraisal method that attempts to measure each prospective company’s quality and growth rate by numerous factors. Such factors include: a company’s record and projections of profit and earnings growth, accuracy and availability of information with respect to the company, success and experience of management, accessibility of management to the Fund’s Adviser, product lines and competitive position both in the United States and abroad, lack of cyclicality, large market capitalization and liquidity of the company’s securities. The Adviser compares these results to the general stock markets to determine the relative attractiveness of each company at a

given time. The Adviser weighs economic, political and market factors in making investment decisions; this appraisal technique attempts to measure each investment candidate not only against other stocks of the same industry group, but also against a broad spectrum of investments. The Fund primarily invests in large-market capitalization companies, which the Adviser defines as companies that have market capitalizations of $5 billion or more (“large-cap”).

The Fund invests in a relatively small number of individual stocks. The Fund is considered to be “non-diversified”, which means that the securities laws do not limit the percentage of its assets that it may invest in any one company (subject to certain limitations under the Internal Revenue Code of 1986, as amended).

Although the Fund primarily invests in large-cap stocks, it may also invest in the stocks of mid-capitalization companies, which the Adviser defines, with respect to the Fund, as companies that have market capitalizations of $3 billion to $5 billion (“mid-cap”). Mid-cap stocks may be more volatile and less liquid than large-cap stocks.

Investment Results

The table on page 4 shows the Fund’s performance compared to its benchmark, the Standard & Poor’s (“S&P”) 500 Index. Also included in the table are returns for the Fund’s peer group, as represented by the Lipper Multi-Cap Growth Funds Average (the “Lipper Average”). Funds in the Lipper Average have generally similar


AB CONCENTRATED GROWTH FUND •			1

investment mandates to the Fund, although some may have different investment policies and sales and management fees and fund expenses.

All share classes of the Fund underperformed the benchmark and the Lipper Average for the 12-month period, before sales charges. Top absolute contributors to performance included ADP, Hershey and Precision Castparts. Sector selection was negative. While an underweight in the financials and energy sectors helped performance, this was offset by underweights in the staples, utilities and telecommunications sectors, relative to the benchmark. While stock selection within consumer staples and materials was positive, this was offset by negative security selection within consumer discretionary and technology. Top absolute detractors included Sensata Technologies, Ralph Lauren and Abbott Laboratories. This underperformance has been driven by value performing significantly better than growth, health care not acting as defensively as it should and internationally exposed companies underperforming domestically oriented companies.

All share classes of the Fund underperformed the benchmark and the Lipper Average for the six-month period, before sales charges. Top absolute contributors to performance included Hershey, ADP and Yum! Brands. Sector and stock selection were

negative. Top absolute detractors included Ralph Lauren, Charles Schwab and Sensata Technologies. Two themes that worked exceptionally well in the six-month period—stocks with robust dividend yields and cyclical shares. This hurt performance, as the Fund was meaningfully underweight the six best performing sectors and overweight the four sectors that have lagged. This was more a function of investing where the growth is, rather than a sector allocation decision.

The Fund did not utilize derivatives during either period.

Market Review and Investment Strategy

While equity markets posted positive returns during the six- and 12-month periods, volatility emerged. In this environment, the Fund’s Senior Investment Management Team (the “Team”) remained focused on sustainably growing the underlying earnings power of the Fund. With improving gross domestic product, robust job gains and strengthening wages, the Team believes the prospects for the US economy remain promising. In the Team’s view, this economic growth should drive continued, but potentially more modest, earnings growth over time. That said, the Team believes a selective investment approach is more appropriate, especially if margin gains are more limited in the next couple of years. The Team believes the Fund is well positioned for the current environment.


2		• AB CONCENTRATED GROWTH FUND

DISCLOSURES AND RISKS

Benchmark Disclosure

The S&P^® 500 Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The S&P 500 Index includes 500 US stocks and is a common representation of the performance of the overall US stock market. An investor cannot invest directly in an index or average, and their results are not indicative of the performance for any specific investment, including the Fund.

A Word About Risk

Market Risk: The value of the Fund’s assets will fluctuate as the equity markets fluctuate. The value of the Fund’s investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events that affect large portions of the market.

Focused Portfolio Risk: Investments in a limited number of companies may have more risk because changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value (“NAV”).

Non-diversification Risk: The Fund is a “non-diversified” investment company, which means that the Fund may invest a larger portion of its assets in fewer companies than a diversified investment company. This increases the risks of investing in the Fund since the performance of each stock has a greater impact on the Fund’s performance. To the extent that the Fund invests a relatively high percentage of its assets in securities of a limited number of companies, the Fund may also be more susceptible than a diversified investment company to any single economic, political or regulatory occurrence.

Management Risk: The Fund is subject to management risk because it is an actively managed investment fund. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results.

These risks are fully discussed in the Fund’s prospectus. As with all investments, you may lose money by investing in the Fund.

An Important Note About Historical Performance

All fees and expenses related to the operation of the Fund have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Fund’s quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 4.25% maximum front-end sales charge for Class A shares and a 1% 1-year contingent deferred sales charge for Class C shares. Returns for the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.


AB CONCENTRATED GROWTH FUND •			3

Disclosures and Risks

HISTORICAL PERFORMANCE



THE FUND VS. ITS BENCHMARK PERIODS ENDED JUNE 30, 2016 (unaudited)	NAV Returns
	6 Months		12 Months
AB Concentrated Growth Fund
Class A		-4.30%		-6.38%

Class C		-4.66%		-7.10%

Advisor Class*		-4.21%		-6.16%

Class R*		-4.43%		-6.62%

Class K*		-4.30%		-6.38%

Class I*		-4.17%		-6.12%

Class Z*		-4.17%		-6.12%

S&P 500 Index		3.84%		3.99%

Lipper Multi-Cap Growth Funds Average		-2.16%		-4.43%

* These share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

See Disclosures, Risks and Note about Historical Performance on page 3.

(Historical Performance continued on next page)


4		• AB CONCENTRATED GROWTH FUND

Historical Performance

HISTORICAL PERFORMANCE

(continued from previous page)

GROWTH OF A $10,000 INVESTMENT IN THE FUND

6/30/06 TO 6/30/16 (unaudited)

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Concentrated Growth Fund Advisor Class shares (from 6/30/2006 to 6/30/2016) as compared to the performance of the Fund’s benchmark. The chart assumes the reinvestment of dividends and capital gains distributions.

See Disclosures, Risks and Note about Historical Performance on page 3.

(Historical Performance continued on next page)


AB CONCENTRATED GROWTH FUND •			5

Historical Performance

HISTORICAL PERFORMANCE

(continued from previous page)


AVERAGE ANNUAL RETURNS AS OF JUNE 30, 2016 (unaudited)
	NAV Returns			SEC Returns (reflects applicable sales charges)

Class A Shares
1 Year		-6.38	%		-10.37	%
Since Inception*		4.54	%		2.62	%

Class C Shares
1 Year		-7.10	%		-8.00	%
Since Inception*		3.77	%		3.77	%

Advisor Class Shares^†
1 Year		-6.16	%		-6.16	%
5 Years		11.63	%		11.63	%
10 Years		7.17	%		7.17	%

Class R Shares^†
1 Year		-6.62	%		-6.62	%
Since Inception*		4.27	%		4.27	%

Class K Shares^†
1 Year		-6.38	%		-6.38	%
Since Inception*		4.54	%		4.54	%

Class I Shares^†
1 Year		-6.12	%		-6.12	%
Since Inception*		4.82	%		4.82	%

Class Z Shares^†
1 Year		-6.12	%		-6.12	%
Since Inception*		4.79	%		4.79	%

The Fund’s prospectus fee table shows the Fund’s total annual operating expense ratios as 1.39%, 2.14%, 1.12%, 1.60%, 1.35%, 1.09% and 1.08% for Class A, Class C, Advisor Class, Class R, Class K, Class I and Class Z shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratios exclusive of acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs to 1.24%, 1.99%, 0.99%, 1.49%, 1.24%, 0.99% and 0.99% for Class A, Class C, Advisor Class, Class R, Class K, Class I and Class Z shares, respectively. These waivers/reimbursements may not be terminated before October 31, 2016. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

Inception date: 2/28/2014.

^†

These share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

See Disclosures, Risks and Note about Historical Performance on page 3.

(Historical Performance continued on next page)


6		• AB CONCENTRATED GROWTH FUND

Historical Performance

HISTORICAL PERFORMANCE

(continued from previous page)


SEC AVERAGE ANNUAL RETURNS AS OF THE MOST RECENT CALENDAR QUARTER-END JUNE 30, 2016 (unaudited)
	SEC Returns (reflects applicable sales charges)

Class A Shares
1 Year		-10.37	%
Since Inception*		2.62	%

Class C Shares
1 Year		-8.00	%
Since Inception*		3.77	%

Advisor Class Shares^†
1 Year		-6.16	%
5 Years		11.63	%
10 Years		7.17	%

Class R Shares^†
1 Year		-6.62	%
Since Inception*		4.27	%

Class K Shares^†
1 Year		-6.38	%
Since Inception*		4.54	%

Class I Shares^†
1 Year		-6.12	%
Since Inception*		4.82	%

Class Z Shares^†
1 Year		-6.12	%
Since Inception*		4.79	%

Inception date: 2/28/2014.

^†

See Disclosures, Risks and Note about Historical Performance on page 3.


AB CONCENTRATED GROWTH FUND •			7

Historical Performance

EXPENSE EXAMPLE

(unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


	Beginning Account Value January 1, 2016		Ending Account Value June 30, 2016		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	957.00	$	6.13		1.26	%
Hypothetical**	$	1,000	$	1,018.60	$	6.32		1.26	%
Class C
Actual	$	1,000	$	953.40	$	9.76		2.01	%
Hypothetical**	$	1,000	$	1,014.87	$	10.07		2.01	%
Advisor Class
Actual	$	1,000	$	957.90	$	4.97		1.02	%
Hypothetical**	$	1,000	$	1,019.79	$	5.12		1.02	%
Class R
Actual	$	1,000	$	955.70	$	7.29		1.50	%
Hypothetical**	$	1,000	$	1,017.40	$	7.52		1.50	%
Class K
Actual	$	1,000	$	957.00	$	6.08		1.25	%
Hypothetical**	$	1,000	$	1,018.65	$	6.27		1.25	%
Class I
Actual	$	1,000	$	958.30	$	4.82		0.99	%
Hypothetical**	$	1,000	$	1,019.94	$	4.97		0.99	%
Class Z
Actual	$	1,000	$	958.30	$	4.77		0.98	%
Hypothetical**	$	1,000	$	1,019.99	$	4.92		0.98	%

Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

Assumes 5% annual return before expenses.


8		• AB CONCENTRATED GROWTH FUND

Expense Example

PORTFOLIO SUMMARY

June 30, 2016 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $322.8

LOGO

TEN LARGEST HOLDINGS^†

June 30, 2016 (unaudited)


Company	U.S. $ Value		Percent of Net Assets
Amphenol Corp. – Class A	$	23,027,340		7.1	%
Quintiles Transnational Holdings, Inc.		22,847,760		7.1
Automatic Data Processing, Inc.		22,227,028		6.9
Abbott Laboratories		21,531,934		6.7
Priceline Group, Inc. (The)		21,046,944		6.5
Ecolab, Inc.		20,069,018		6.2
MasterCard, Inc. – Class A		19,414,500		6.0
Verisk Analytics, Inc. – Class A		15,867,518		4.9
Yum! Brands, Inc.		15,680,172		4.9
Hershey Co. (The)		15,638,922		4.8
	$	197,351,136		61.1	%

All data are as of June 30, 2016. The Fund’s sector breakdown is expressed as a percentage of total investments and may vary over time.

^†

Long-term investments.

Please note: The sector classifications presented herein are based on the Global Industry Classification Standard (GICS) which was developed by Morgan Stanley Capital International and Standard & Poor’s. The components are divided into sector, industry group, and industry sub-indices as classified by the GICS for each of the market capitalization indices in the broad market. These sector classifications are broadly defined. The “Portfolio of Investments” section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Fund’s prospectus.


AB CONCENTRATED GROWTH FUND •			9

Portfolio Summary and Ten Largest Holdings

PORTFOLIO OF INVESTMENTS

June 30, 2016


Company	Shares		U.S. $ Value


COMMON STOCKS – 98.8%
Information Technology – 31.6%
Electronic Equipment, Instruments & Components – 7.1%
Amphenol Corp. – Class A		401,663	$	23,027,340


Internet Software & Services – 4.8%
Alphabet, Inc. – Class C^(a)		22,215		15,375,001


IT Services – 12.9%
Automatic Data Processing, Inc.		241,940		22,227,028
MasterCard, Inc. – Class A		220,469		19,414,500

				41,641,528

Software – 2.1%
ANSYS, Inc.^(a)		76,038		6,900,449


Technology Hardware, Storage & Peripherals – 4.7%
Apple, Inc.		158,507		15,153,269

				102,097,587

Health Care – 23.3%
Biotechnology – 4.7%
Celgene Corp.^(a)		155,368		15,323,946


Health Care Equipment & Supplies – 6.7%
Abbott Laboratories		547,747		21,531,934


Life Sciences Tools & Services – 7.1%
Quintiles Transnational Holdings, Inc.^(a)		349,782		22,847,760


Pharmaceuticals – 4.8%
Zoetis, Inc.		328,015		15,567,592

				75,271,232

Consumer Discretionary – 23.2%
Auto Components – 4.8%
Delphi Automotive PLC		246,730		15,445,298


Hotels, Restaurants & Leisure – 7.8%
Chipotle Mexican Grill, Inc. – Class A^(a)		23,790		9,581,660
Yum! Brands, Inc.		189,100		15,680,172

				25,261,832

Internet & Catalog Retail – 6.5%
Priceline Group, Inc. (The)^(a)		16,859		21,046,944


Textiles, Apparel & Luxury Goods – 4.1%
VF Corp.		214,087		13,164,210

				74,918,284

Materials – 6.2%
Chemicals – 6.2%
Ecolab, Inc.		169,216		20,069,018


10		• AB CONCENTRATED GROWTH FUND

Portfolio of Investments


Company	Shares		U.S. $ Value


Industrials – 4.9%
Professional Services – 4.9%
Verisk Analytics, Inc. – Class A^(a)		195,702	$	15,867,518


Consumer Staples – 4.9%
Food Products – 4.9%
Hershey Co. (The)		137,800		15,638,922


Financials – 4.7%
Capital Markets – 4.7%
Charles Schwab Corp. (The)		598,435		15,146,390


Total Common Stocks (cost $320,159,322)				319,008,951


SHORT-TERM INVESTMENTS – 1.2%
Investment Companies – 1.2%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.25%^(b)(c) (cost $3,772,379)		3,772,379		3,772,379


Total Investments – 100.0% (cost $323,931,701)				322,781,330
Other assets less liabilities – 0.0%				(18,661	)


Net Assets – 100.0%			$	322,762,669

(a)

Non-income producing security.

(b)

Investment in affiliated money market mutual fund. The rate shown represents the 7-day yield as of period end.

(c)

To obtain a copy of the fund’s financial statements, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

See notes to financial statements.


AB CONCENTRATED GROWTH FUND •			11

Portfolio of Investments

STATEMENT OF ASSETS & LIABILITIES

June 30, 2016


Assets
Investments in securities, at value
Unaffiliated issuers (cost $320,159,322)	$	319,008,951
Affiliated issuers (cost $3,772,379)		3,772,379
Receivable for investment securities sold		1,615,384
Receivable for capital stock sold		897,228
Dividends receivable		290,719

Total assets		325,584,661

Liabilities
Payable for investment securities purchased		1,775,393
Payable for capital stock redeemed		718,708
Advisory fee payable		170,368
Distribution fee payable		22,826
Administrative fee payable		16,765
Transfer Agent fee payable		6,348
Accrued expenses and other liabilities		111,584

Total liabilities		2,821,992

Net Assets	$	322,762,669

Composition of Net Assets
Capital stock, at par	$	1,235
Additional paid-in capital		329,245,307
Accumulated net investment loss		(1,556	)
Accumulated net realized loss on investment transactions		(5,331,946	)
Net unrealized depreciation on investments		(1,150,371	)

	$	322,762,669

Net Asset Value Per Share—21 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

A	$	30,437,652		1,169,020	$	26.04	*

C	$	19,616,498		766,871	$	25.58

Advisor	$	227,787,358		8,701,367	$	26.18

R	$	33,419		1,291.24	$	25.88

K	$	99,230		3,811	$	26.04

I	$	24,711		942.95	$	26.21

Z	$	44,763,801		1,709,466	$	26.19

The maximum offering price per share for Class A shares was $27.20 which reflects a sales charge of 4.25%.

See notes to financial statements.


12		• AB CONCENTRATED GROWTH FUND

Statement of Assets & Liabilities

STATEMENT OF OPERATIONS

Year Ended June 30, 2016


Investment Income
Dividends
Unaffiliated issuers	$	3,370,089
Affiliated issuers		12,528		$	3,382,617

Expenses
Advisory fee (see Note B)		2,600,268
Distribution fee—Class A		62,619
Distribution fee—Class C		178,546
Distribution fee—Class R		129
Distribution fee—Class K		195
Transfer agency—Class A		17,896
Transfer agency—Class C		12,387
Transfer agency—Advisor Class		158,746
Transfer agency—Class R		15
Transfer agency—Class K		39
Transfer agency—Class I		4
Transfer agency—Class Z		8,246
Custodian		122,937
Registration fees		121,722
Administrative		59,331
Legal		41,635
Audit and tax		37,846
Printing		35,418
Directors’ fees		21,937
Miscellaneous		15,557

Total expenses		3,495,473
Less: expenses waived and reimbursed by the Adviser (see Note B)		(47,910	)

Net expenses					3,447,563

Net investment loss					(64,946	)

Realized and Unrealized Loss on Investment Transactions
Net realized loss on investment transactions					(1,084,373	)
Net change in unrealized appreciation/depreciation of investments					(19,156,207	)

Net loss on investment transactions					(20,240,580	)

Net Decrease in Net Assets from Operations				$	(20,305,526	)

See notes to financial statements.


AB CONCENTRATED GROWTH FUND •			13

Statement of Operations

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended June 30, 2016			Year Ended June 30, 2015
Increase (Decrease) in Net Assets from Operations
Net investment loss	$	(64,946	)	$	(249,344	)
Net realized gain (loss) on investment transactions		(1,084,373	)		7,671,365
Net change in unrealized appreciation/depreciation of investments		(19,156,207	)		8,300,783

Net increase (decrease) in net assets from operations		(20,305,526	)		15,722,804
Distributions to Shareholders from
Net realized gain on investment transactions
Class A		(628,838	)		(96,573	)
Class C		(574,644	)		(80,799	)
Advisor Class		(7,302,389	)		(2,366,806	)
Class R		(1,002	)		(317	)
Class K		(2,424	)		(317	)
Class I		(734	)		(320	)
Class Z		(1,294,334	)		(874,981	)
Capital Stock Transactions
Net increase		101,027,695			176,434,293

Total increase		70,917,804			188,736,984
Net Assets
Beginning of period		251,844,865			63,107,881

End of period (including accumulated net investment loss of ($1,556) and ($186,186), respectively)	$	322,762,669		$	251,844,865

See notes to financial statements.


14		• AB CONCENTRATED GROWTH FUND

Statement of Changes in Net Assets

NOTES TO FINANCIAL STATEMENTS

June 30, 2016

NOTE A

Significant Accounting Policies

AB Cap Fund, Inc. (the “Company”), which is a Maryland corporation, is registered under the Investment Company Act of 1940 as an open-end management investment company. The Company operates as a series company currently comprised of 27 portfolios. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB Concentrated Growth Fund (the “Fund”), a non-diversified portfolio. The Fund has authorized the issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I and Class Z shares. Class B shares are not currently offered. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Class R and Class K shares are sold without an initial or contingent deferred sales charge. Advisor Class, Class I and Class Z shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eight classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Fund’s Board of Directors (the “Board”).

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by


AB CONCENTRATED GROWTH FUND •			15

Notes to Financial Statements

reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g. last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for 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 when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Such factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. 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.


16		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

•

Level 1—quoted prices in active markets for identical investments

•

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation.


AB CONCENTRATED GROWTH FUND •			17

Notes to Financial Statements

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of June 30, 2016:

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks^(a)

319,008,951

– 0

–

– 0

–

319,008,951

Short-Term Investments

3,772,379

– 0

–

– 0

–

3,772,379

Total Investments in Securities

322,781,330

– 0

–

– 0

–

322,781,330

Other Financial Instruments^(b)

– 0

–

– 0

–

– 0

–

– 0

–

Total^(c)

322,781,330

– 0

–

– 0

–

322,781,330

^(a)

See Portfolio of Investments for sector classifications.

^(b)

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/depreciation on the instrument.

^(c)

There were no transfers between any levels during the reporting period.

The Fund recognizes all transfers between levels of the fair value hierarchy assuming the financial instruments were transferred at the beginning of the reporting period.

The Adviser established the Committee to oversee the pricing and valuation of all securities held in the Fund. The Committee operates under pricing and valuation policies and procedures established by the Adviser and approved by the Board, including pricing policies which set forth the mechanisms and processes to be employed on a daily basis to implement these policies and procedures. In particular, the pricing policies describe how to determine market quotations for securities and other instruments. The Committee’s responsibilities include: 1) fair value and liquidity determinations (and oversight of any third parties to whom any responsibility for fair value and liquidity determinations is delegated), and 2) regular monitoring of the Adviser’s pricing and valuation policies and procedures and modification or enhancement of these policies and procedures (or recommendation of the modification of these policies and procedures) as the Committee believes appropriate.

The Committee is also responsible for monitoring the implementation of the pricing policies by the Adviser’s Pricing Group (the “Pricing Group”) and a third party which performs certain pricing functions in accordance with the pricing policies. The Pricing Group is responsible for the oversight of the third party on a day-to-day basis. The Committee and the Pricing Group perform a series of activities to provide reasonable assurance of the accuracy of prices including: 1) periodic vendor due diligence meetings, review of methodologies, new developments and processes at vendors, 2) daily comparison of security valuation versus prior day for all securities that exceeded established thresholds, and 3) daily review of unpriced, stale, and variance reports with exceptions reviewed by senior management and the Committee.


18		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

In addition, several processes outside of the pricing process are used to monitor valuation issues including: 1) performance and performance attribution reports are monitored for anomalous impacts based upon benchmark performance, and 2) portfolio managers review all portfolios for performance and analytics (which are generated using the Adviser’s prices).

3. Currency Translation

Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange contracts are translated into U.S. dollars at the mean of the quoted bid and ask prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued.

Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of foreign currency denominated assets and liabilities.

4. Taxes

It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current tax year and the prior tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily and includes amortization of premiums and accretions of discounts as adjustments to interest


AB CONCENTRATED GROWTH FUND •			19

Notes to Financial Statements

income. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.

6. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.

7. Dividends and Distributions

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of 1.00% of the Fund’s average daily net assets. The Adviser has contractually agreed to waive .20% of the management fee until October 31, 2016. The fee is accrued daily and paid monthly. The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses (excluding expenses associated with acquired fund fees and expenses other than the advisory fees of any AB Mutual Funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs), on an annual basis (the “Expense Caps”) to 1.24%, 1.99%, .99%, 1.49%, 1.24%, .99% and .99% of daily average net assets for Class A, Class C, Advisor Class, Class R, Class K, Class I and Class Z shares, respectively. The Expense Caps will remain in effect until October 31, 2016 and will be automatically extended for one-year periods thereafter unless terminated by the Adviser upon 60 days’ notice to the Fund prior to that date. For the year ended June 30, 2016, such waiver/reimbursement amounted to $47,602.

Pursuant to the investment advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended June 30, 2016, the reimbursement for such services amounted to $59,331.


20		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $68,709 for the year ended June 30, 2016.

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has retained front-end sales charges of $12,666 from the sale of Class A shares and received $2,450 and $6,332 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A and Class C shares, respectively, for the year ended June 30, 2016.

The AB Fixed-Income Shares, Inc.—Government STIF Portfolio (the “Government STIF Portfolio”), prior to June 1, 2016, was offered as a cash management option to mutual funds and other institutional accounts of the Adviser, and was not available for direct purchase by members of the public. Prior to June 1, 2016, the Government STIF Portfolio paid no investment management fees but did bear its own expenses. As of June 1, 2016, the Government STIF Portfolio, which was renamed “AB Government Money Market Portfolio” (the “Government Money Market Portfolio”), has a contractual investment management fee rate of .20% and continues to bear its own expenses. In connection with the investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive its investment management fee from the Fund in an amount equal to Government Money Market Portfolio’s effective management fee. For the year ended June 30, 2016, such waiver amounted to $308. A summary of the Fund’s transactions in shares of the Government Money Market Portfolio for the year ended June 30, 2016 is as follows:

Market Value

June 30, 2015

(000)

Purchases
at Cost
(000)

Sales
Proceeds
(000)

Market Value
June 30, 2016
(000)

Dividend
Income
(000)

2,428

141,113

139,769

3,772

Brokerage commissions paid on investment transactions for the year ended June 30, 2016 amounted to $152,736, of which $0 and $0, respectively, was paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (“the Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A, Class C, Class R and Class K. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .25%


AB CONCENTRATED GROWTH FUND •			21

Notes to Financial Statements

of the Fund’s average daily net assets attributable to Class A shares, 1% of the Fund’s average daily net assets attributable to Class C shares, .50% of the Fund’s average daily net assets attributable to Class R shares, and .25% of the Fund’s average daily net assets attributable to Class K shares. There are no distribution and servicing fees on the Advisor Class, Class I and Class Z shares. The fees are accrued daily and paid monthly. Since the commencement of the Fund’s operations, the Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $138,996, $-0- and $-0- for Class C, Class R and Class K shares, respectively. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund’s shares.

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended June 30, 2016 were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	230,051,873		$	141,227,762
U.S. government securities		– 0	–		– 0	–

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows:


Cost	$	324,686,738

Gross unrealized appreciation	$	13,962,938
Gross unrealized depreciation		(15,868,346	)

Net unrealized appreciation	$	(1,905,408	)

1. Derivative Financial Instruments

The Fund may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, “investment purposes”), or to hedge or adjust the risk profile of its portfolio.

The Fund did not engage in derivatives transactions for the year ended June 30, 2016.


22		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

2. Currency Transactions

The Fund may invest in non-U.S. Dollar-denominated securities on a currency hedged or unhedged basis. The Fund 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 and options on futures, swaps, and other options. The Fund 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 Fund 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).

NOTE E

Capital Stock

Each class consists of 3,000,000,000 authorized shares. Transactions in capital shares for each class were as follows:



	Shares						Amount
	Year Ended June 30, 2016			Year Ended June 30, 2015			Year Ended June 30, 2016			Year Ended June 30, 2015

Class A
Shares sold		1,023,118			543,820		$	27,881,994		$	15,195,992

Shares issued in reinvestment of distributions		18,527			3,516			513,394			95,300

Shares redeemed		(354,535	)		(67,557	)		(9,281,867	)		(1,910,660	)

Net increase		687,110			479,779		$	19,113,521		$	13,380,632


Class C
Shares sold		535,050			378,795		$	14,558,072		$	10,464,660

Shares issued in reinvestment of distributions		18,795			2,804			513,848			75,566

Shares redeemed		(162,974	)		(7,377	)		(4,238,657	)		(208,464	)

Net increase		390,871			374,222		$	10,833,263		$	10,331,762


Advisor Class
Shares sold		5,982,902			6,238,315		$	162,726,403		$	172,690,899

Shares issued in reinvestment of distributions		237,527			84,367			6,610,381			2,290,571

Shares redeemed		(4,243,284	)		(992,409	)		(112,617,016	)		(27,790,815	)

Net increase		1,977,145			5,330,273		$	56,719,768		$	147,190,655


AB CONCENTRATED GROWTH FUND •			23

Notes to Financial Statements


	Shares						Amount
	Year Ended June 30, 2016			Year Ended June 30, 2015			Year Ended June 30, 2016			Year Ended June 30, 2015

Class R
Shares sold		864			– 0	–	$	24,660		$	–0	–

Shares issued in reinvestment of distributions		25			– 0	–^(a)		684			– 0	–

Net increase		889			– 0	–	$	25,344		$	–0	–


Class K
Shares sold		3,768			– 0	–	$	100,456		$	– 0	–

Shares issued in reinvestment of distributions		76			– 0	–^(a)		2,106			– 0	–

Shares redeemed		(436	)		– 0	–		(11,663	)		– 0	–

Net increase		3,408			– 0	–	$	90,899		$	– 0	–


Class I
Shares sold		521			– 0	–	$	14,959		$	– 0	–

Shares issued in reinvestment of distributions		15			– 0	–^(a)		413			– 0	–

Shares redeemed		– 0	–		(1,002,000	)		– 0	–		(27,484,860	)

Net increase (decrease)		536			(1,002,000	)	$	15,372		$	(27,484,860	)


Class Z
Shares sold		645,565			1,171,230		$	17,935,419		$	32,212,632

Shares issued in reinvestment of distributions		46,502			30,545			1,294,147			829,303

Shares redeemed		(183,880	)		(899	)		(5,000,038	)		(25,831	)

Net increase		508,187			1,200,876		$	14,229,528		$	33,016,104

^(a)

Amount is less than one share.

NOTE F

Risks Involved in Investing in the Fund

Focused Portfolio Risk—Investments in a limited number of companies may have more risk because changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value, or NAV.

Non-Diversification Risk—The Fund is a “non-diversified” investment company, which means that the Fund may invest a larger portion of its assets in fewer companies than a diversified investment company. This increases the risks of investing in the Fund since the performance of each stock has a greater impact on the Fund’s performance. To the extent that the Fund invests a relatively high percentage of its assets in securities of a limited number of companies, the Fund may also be more susceptible than a diversified investment company to any singe economic, political or regulatory occurrence.


24		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

Indemnification Risk—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote.

NOTE G

Joint Credit Facility

A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $280 million revolving credit facility (the “Facility”) intended to provide short-term financing, if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the year ended June 30, 2016.

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended June 30, 2016 and June 30, 2015 were as follows:


	2016			2015
Distributions paid from:
Ordinary income	$	– 0	–	$	1,200,078
Net long-term capital gains		9,804,365			2,220,035

Total taxable distributions paid	$	9,804,365		$	3,420,113

As of June 30, 2016, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Accumulated capital and other losses	$	(4,578,465	)^(a)
Unrealized appreciation/(depreciation)		(1,905,408	)^(b)

Total accumulated earnings/(deficit)	$	(6,483,873	)

^(a)

At June 30, 2016, the Fund had a qualified late-year ordinary loss deferral of $1,556, a post-October short-term capital loss deferral of $4,296,156 and a post-October long-term capital loss deferral of $280,753. These losses are deemed to arise on July 1, 2016.

^(b)

The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales.

For tax purposes, net capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses incurred for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of June 30, 2016, the Fund did not have any capital loss carryforwards.


AB CONCENTRATED GROWTH FUND •			25

Notes to Financial Statements

During the current fiscal period, permanent differences primarily due to the utilization of a net operating loss to offset capital gains, net operating losses disallowed and dividend overdistribution resulted in a net decrease in accumulated net investment loss, a net increase in accumulated net realized loss on investment transactions, and a net decrease in additional paid-in capital. These reclassifications had no effect on net assets.

NOTE I

Stock Split

The Predecessor Fund had a 10 for 1 stock split with ex and payable dates of May 2, 2011, to shareholders of record as of April 29, 2011. This resulted in an increase in shares outstanding from 106,689 to 1,066,895 and a decrease in net asset value from $167.21 to $16.72.

NOTE J

New Accounting Pronouncement

In May 2015, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2015-07 (the “ASU”) which removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The ASU also removes the requirement to make certain disclosures for investments that are eligible to be measured at fair value using the net asset value per share practical expedient but do not utilize that practical expedient. The ASU is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. At this time, management is evaluating the implications of these changes on the financial statements.

NOTE K

Subsequent Events

At a meeting held on August 2-3, 2016, the Board of Directors of the Fund approved an amendment to the Fund’s investment objective and certain modifications to the investment strategies of the Fund. The following changes to the Fund’s investment objective and principal investment strategies, which do not require stockholder approval, will be effective on November 1, 2016: i) The Fund’s investment objective is long-term growth of capital and ii) While the Fund primarily invests in companies that have market capitalizations of $5 billion or more, it may invest in companies that have market capitalizations of $3 billion to $5 billion. Also effective November 1, 2016, the Fund will pay the Adviser an advisory fee at an annual rate of 0.80% of the Fund’s average daily net assets.

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no other material events that would require disclosure in the Fund’s financial statements through this date.


26		• AB CONCENTRATED GROWTH FUND

Notes to Financial Statements

FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class A
	Year Ended June 30,						February 28, 2014^(a) to June 30,
	2016			2015			2014


Net asset value, beginning of period		$ 28.61			$ 26.26			$ 24.85

Income From Investment Operations
Net investment loss^(b)(c)		(.05	)		(.10	)		(.01	)
Net realized and unrealized gain (loss) on investment transactions		(1.73	)		3.24			1.42

Net increase (decrease) in net asset value from operations		(1.78	)		3.14			1.41

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		– 0	–

Net asset value, end of period		$ 26.04			$ 28.61			$ 26.26

Total Return
Total investment return based on net asset value^(d)		(6.38	)%		12.12	%		5.67	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$30,438			$13,785			$56
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.24	%		1.24	%		1.24	%^{^}
Expenses, before waivers/reimbursements		1.27	%		1.39	%		2.58	%^{^}
Net investment loss^(c)		(.19	)%		(.37	)%		(.20	)%^{^}
Portfolio turnover rate		44	%		23	%		17	%

See footnote summary on page 33.


AB CONCENTRATED GROWTH FUND •			27

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class C
	Year Ended June 30,						February 28, 2014^(a) to June 30, 2014
	2016			2015			February 28, 2014^(a) to June 30, 2014


Net asset value, beginning of period		$ 28.33			$ 26.20			$ 24.85

Income From Investment Operations
Net investment loss^(b)(c)		(.25	)		(.32	)		(.05	)
Net realized and unrealized gain (loss) on investment transactions		(1.71	)		3.24			1.40

Net increase (decrease) in net asset value from operations		(1.96	)		2.92			1.35

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		– 0	–

Net asset value, end of period		$ 25.58			$ 28.33			$ 26.20

Total Return
Total investment return based on net asset value^(d)		(7.10	)%		11.29	%		5.43	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$19,617			$10,652			$47
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.99	%		1.99	%		1.99	%^{^}
Expenses, before waivers/reimbursements		2.01	%		2.14	%		3.54	%^{^}
Net investment loss^(c)		(.94	)%		(1.15	)%		(.93	)%^{^}
Portfolio turnover rate		44	%		23	%		17	%

See footnote summary on page 33.


28		• AB CONCENTRATED GROWTH FUND

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Advisor Class
	Year Ended June 30,						January 1, 2014 to, June 30, 2014^(e)			Year Ended December 31,
	2016			2015			January 1, 2014 to, June 30, 2014^(e)			2013			2012			2011


Net asset value, beginning of period		$ 28.69			$ 26.28			$ 25.80			$ 18.91			$ 16.32			$ 16.19	^(f)

Income From Investment Operations
Net investment income (loss)^(b)(c)		.01			(.04	)		(.01	)		(.03	)		(.06	)		(.07	)
Net realized and unrealized gain (loss) on investment transactions		(1.73	)		3.24			1.04			6.92			2.65			.20

Net increase (decrease) in net asset value from operations		(1.72	)		3.20			1.03			6.89			2.59			.13

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		(.55	)		– 0	–		– 0	–		– 0	–

Redemption Fees		– 0	–		– 0	–		– 0	–		.00	^(g)		.00	^(g)		.00	^(g)

Net asset value, end of period		$ 26.18			$ 28.69			$ 26.28			$ 25.80			$ 18.91			$ 16.32

Total Return
Total investment return based on net asset value^(d)		(6.16	)%		12.34	%		4.11	%		36.44	%		15.87	%		.82	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$227,787			$192,909			$36,630			$25,170			$18,433			$16,557
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		.99	%		.99	%		1.06	%^{^}		1.23	%		1.23	%		1.32	%
Expenses, before waivers/reimbursements		1.01	%		1.12	%		2.26	%^{^}		1.90	%		1.93	%		2.01	%
Net investment income (loss)^(c)		.05	%		(.13	)%		(.06	)%^{^}		(.14	)%		(.30	)%		(.42	)%
Portfolio turnover rate		44	%		23	%		17	%		42	%		34	%		37	%

See footnote summary on page 33.


AB CONCENTRATED GROWTH FUND •			29

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class R
	Year Ended June 30,						February 28, 2014^(a) to June 30,
	2016			2015			2014


Net asset value, beginning of period		$ 28.51			$ 26.24			$ 24.85

Income From Investment Operations
Net investment loss^(b)(c)		(.12	)		(.17	)		(.03	)
Net realized and unrealized gain (loss) on investment transactions		(1.72	)		3.23			1.42

Net increase (decrease) in net asset value from operations		(1.84	)		3.06			1.39

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		– 0	–

Net asset value, end of period		$ 25.88			$ 28.51			$ 26.24

Total Return
Total investment return based on net asset value^(d)		(6.62	)%		11.82	%		5.59	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$33			$11			$10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.49	%		1.49	%		1.49	%^{^}
Expenses, before waivers/reimbursements		1.50	%		1.60	%		2.79	%^{^}
Net investment loss^(c)		(.45	)%		(.62	)%		(.41	)%^{^}
Portfolio turnover rate		44	%		23	%		17	%

See footnote summary on page 33.


30		• AB CONCENTRATED GROWTH FUND

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class K
	Year Ended June 30,					February 28, 2014^(a) to June 30,
		2016		2015			2014


Net asset value, beginning of period		$ 28.61		$ 26.26			$ 24.85

Income From Investment Operations
Net investment loss^(b)(c)		(.05	)	(.10	)		(.01	)
Net realized and unrealized gain (loss) on investment transactions		(1.73	)	3.24			1.42

Net increase (decrease) in net asset value from operations		(1.78	)	3.14			1.41

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)	(.79	)		– 0	–

Net asset value, end of period		$ 26.04		$ 28.61			$ 26.26

Total Return
Total investment return based on net asset value^(d)		(6.38	)%	12.12	%		5.67	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$99		$12			$10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.24	%	1.24	%		1.24	%^{^}
Expenses, before waivers/reimbursements		1.24	%	1.35	%		2.58	%^{^}
Net investment loss^(c)		(.18	)%	(.38	)%		(.15	)%^{^}
Portfolio turnover rate		44	%	23	%		17	%

See footnote summary on page 33.


AB CONCENTRATED GROWTH FUND •			31

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class I
	Year Ended June 30,						February 28, 2014^(a) to June 30,
	2016			2015			2014


Net asset value, beginning of period		$ 28.71			$ 26.28			$ 24.85

Income From Investment Operations
Net investment income (loss)^(b)(c)		.02			(.02	)		(.02	)
Net realized and unrealized gain (loss) on investment transactions		(1.73	)		3.24			1.45

Net increase (decrease) in net asset value from operations		(1.71	)		3.22			1.43

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		– 0	–

Net asset value, end of period		$ 26.21			$ 28.71			$ 26.28

Total Return
Total investment return based on net asset value^(d)		(6.12	)%		12.42	%		5.75	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$25			$12			$26,344
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		.98	%		.99	%		.99	%^{^}
Expenses, before waivers/reimbursements		.98	%		1.09	%		1.95	%^{^}
Net investment income (loss)^(c)		.07	%		(.07	)%		(.27	)%^{^}
Portfolio turnover rate		44	%		23	%		17	%

See footnote summary on page 33.


32		• AB CONCENTRATED GROWTH FUND

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class Z
	Year Ended June 30,						February 28, 2014^(a) to June 30, 2014
	2016			2015			February 28, 2014^(a) to June 30, 2014


Net asset value, beginning of period		$ 28.69			$ 26.28			$ 24.85

Income From Investment Operations
Net investment income (loss)^(b)(c)		.02			(.04	)		.01
Net realized and unrealized gain (loss) on investment transactions		(1.73	)		3.24			1.42

Net increase (decrease) in net asset value from operations		(1.71	)		3.20			1.43

Less: Distributions
Distributions from net realized gain on investment transactions		(.79	)		(.79	)		– 0	–

Net asset value, end of period		$ 26.19			$ 28.69			$ 26.28

Total Return
Total investment return based on net asset value^(d)		(6.12	)%		12.34	%		5.75	%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$44,764			$34,464			$11
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		.96	%		.99	%		.99	%^{^}
Expenses, before waivers/reimbursements		.96	%		1.08	%		2.25	%^{^}
Net investment income (loss)^(c)		.07	%		(.15	)%		.09	%^{^}
Portfolio turnover rate		44	%		23	%		17	%

(a)

Commencement of operations.

(b)

Based on average shares outstanding.

(c)

Net of fees and expenses waived/reimbursed by the Adviser.

(d)

Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.

(e)

The Predecessor Fund changed its fiscal year end from December 31 to June 30.

(f)

The Predecessor Fund had a 10-1 stock split with ex and payable dates of May 2, 2011 (See Note I). The per share table has been adjusted for the earlier periods presented to reflect the stock split.

(g)

Amount is less than $0.005.

Annualized.

See notes to financial statements.


AB CONCENTRATED GROWTH FUND •			33

Financial Highlights

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors of AB Cap Fund, Inc. and the

Shareholders of AB Concentrated Growth Fund

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of AB Concentrated Growth Fund (the “Fund”), one of the funds constituting the AB Cap Fund, Inc., as of June 30, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and the period January 1, 2014 to June 30, 2014. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the periods presented prior to January 1, 2014 were audited by other auditors whose report dated February 28, 2014 expressed an unqualified opinion on those statements and financial highlights.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2016 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AB Concentrated Growth Fund, one of the funds constituting the AB Cap Fund, Inc., at June 30, 2016, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and the period January 1, 2014 to June 30, 2014, in conformity with U.S. generally accepted accounting principles.

LOGO

New York, New York

August 25, 2016


34		• AB CONCENTRATED GROWTH FUND

Report of Independent Registered Public Accounting Firm

2016 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the earnings of the Fund for the taxable period ended June 30, 2016.

For such taxable period, the Fund designates $3,300,805 as the maximum amount that may be considered qualified dividend income for individual shareholders.

Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2017.


AB CONCENTRATED GROWTH FUND •			35

BOARD OF DIRECTORS

Marshall C. Turner, Jr.⁽¹⁾, Chairman

John H. Dobkin⁽¹⁾

Michael J. Downey⁽¹⁾

William H. Foulk, Jr.⁽¹⁾

D. James Guzy⁽¹⁾

Nancy P. Jacklin⁽¹⁾

Robert M. Keith, President and Chief Executive Officer

Carol C. McMullen⁽¹⁾

Garry L. Moody⁽¹⁾

Earl D. Weiner⁽¹⁾



OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer James Tierney⁽²⁾ , Vice President Emilie D. Wrapp, Secretary		Joseph J. Mantineo, Treasurer and Chief Financial Officer Phyllis J. Clarke, Controller Vincent S. Noto, Chief Compliance Officer


Custodian and Accounting Agent State Street Bank and Trust Company State Street Corporation CCB/5 1 Iron Street Boston, MA 02210		Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036
Principal Underwriter AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105		Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004
Transfer Agent AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-Free (800) 221-5672

(1)

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

(2)

The day-to-day management of, and investment decisions for, the Fund’s Portfolio are made by Mr. James Tierney.


36		• AB CONCENTRATED GROWTH FUND

Board of Directors

MANAGEMENT OF THE FUND


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INTERESTED DIRECTOR
Robert M. Keith, # 1345 Avenue of the Americas New York, NY 10105 56 (2014)	Senior Vice President of AllianceBernstein L.P. (the “Adviser”) and the head of AllianceBernstein Investments, Inc. (“ABI”) since July 2008; Director of ABI and President of the AB Mutual Funds. Previously, he served as Executive Managing Director of ABI from December 2006 to June 2008. Prior to joining ABI in 2006, Executive Managing Director of Bernstein Global Wealth 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.		108	None

DISINTERESTED DIRECTORS
Marshall C. Turner, Jr., ## Chairman of the Board 74 (2014)	Private Investor since prior to 2011. Former Chairman and CEO of Dupont Photomasks, Inc. (components of semi-conductor manufacturing). He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture 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 Funds since February 2014.		108	Xilinx, Inc. (programmable logic semi-conductors) since 2007


AB CONCENTRATED GROWTH FUND •			37

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
John H. Dobkin, ## 74 (2014)	Independent Consultant since prior to 2011. Formerly, President of Save Venice, Inc. (preservation organization) from 2001–2002; Senior Advisor from June 1999-June 2000 and President of Historic Hudson Valley (historic preservation) from December 1989-May 1999. Previously, Director of the National Academy of 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.		108	None

Michael J. Downey, ## 72 (2014)	Private Investor since prior to 2011. Formerly, managing partner of Lexington Capital, LLC (investment advisory firm) from December 1997 until December 2003. He served as a Director 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.		108	Asia Pacific Fund, Inc. (registered investment company) since prior to 2011


38		• AB CONCENTRATED GROWTH FUND

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
William H. Foulk, Jr., ## 83 (2014)	Investment Adviser and an Independent Consultant since prior to 2011. Previously, he was Senior Manager of Barrett Associates, Inc., a registered investment adviser. He was formerly Deputy Comptroller and Chief Investment Officer of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. 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.		108	None

D. James Guzy, ## 80 (2014)	Chairman of the Board of SRC Computers, Inc. (semi-conductors), with which he has been associated since prior to 2011. He served as Chairman of the Board of PLX Technology (semi-conductors) since prior to 2011 until November 2013. 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.		108	None


AB CONCENTRATED GROWTH FUND •			39

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Nancy P. Jacklin, ## 68 (2014)	Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford 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.		108	None


40		• AB CONCENTRATED GROWTH FUND

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Carol C. McMullen, ## 61 (2016)	Managing Director and Advisor, Leadership Development, Strategy, Corporate Social Responsibility of Slalom Consulting (consulting) since 2014; Director of Graebel Companies, Inc. (relocation services) and member of the Risk Management, Audit and Compliance Committees since 2014; Director and member of Finance/Investment and Audit Committees of Norfolk & Dedham Group (property and casualty insurance) since 2011. She is also lead investment director for business and family assets at Sydney Associates (real estate development) from prior to 2011 to present and serves on a number of non-profit boards. Formerly, Principal and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has served as a director or trustee of the AB Funds since June 2016.		108	None


AB CONCENTRATED GROWTH FUND •			41

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Garry L. Moody, ## 64 (2014)	Independent Consultant. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for the accounting, pricing, custody and reporting for the Fidelity mutual funds; and 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.		108	None


42		• AB CONCENTRATED GROWTH FUND

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Earl D. Weiner, ## 77 (2014)	Of Counsel, and Partner prior to January 2007, of the law firm Sullivan & Cromwell LLP and is a former member of the ABA Federal Regulation of Securities Committee Task Force to draft editions of the Fund Director’s Guidebook. He also serves as a director or trustee of various non-profit organizations 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.		108	None

The address for each of the Fund’s disinterested 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 Fund’s Directors.

***

The information above includes each Director’s principal occupation during the last five years and other information relating to the experience, attributes and skills relevant to each Director’s qualifications to serve as a Director, which led to the conclusion that each Director should serve as a Director for the Fund.

Mr. Keith is an “interested person” of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

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


AB CONCENTRATED GROWTH FUND •			43

Management of the Fund

Officer Information

Certain information concerning the Fund’s Officers is listed below.


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST 5 YEARS
Robert M. Keith 56	President and Chief Executive Officer	See biography above.

Philip L. Kirstein 71	Senior Vice President and Independent Compliance Officer	Senior Vice President and Independent Compliance Officer of the AB Funds, with which he has been associated since October 2004. Prior thereto, he was Of Counsel to Kirkpatrick & Lockhart, LLP from October 2003 to October 2004, and General Counsel of Merrill Lynch Investment Managers, L.P. since prior to March 2003.

James Tierney, 49	Vice President	Senior Vice President of the Adviser and Chief Investment Officer of Concentrated US Growth since December 2013. Prior thereto, he was Chief Investment Officer of W.P. Stewart and Co. Ltd. (“WPS”) (2010-2013) and Portfolio Manager/Analyst and Senior Vice President of WPS since prior to 2011.

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

Joseph J. Mantineo, 57	Treasurer and Chief Financial Officer	Senior Vice President of ABIS,** with which he has been associated since prior to 2011.

Vincent S. Noto 51	Chief Compliance Officer	Senior Vice President since 2015 and 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.

Phyllis J. Clarke, 55	Controller	Vice President of ABIS,** with which she 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 the Fund.

The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Directors and Officers and is available without charge upon request. Contact your financial representative or AB at 1-800-227-4618, or visit www.ABFunds.com, for a free prospectus or SAI.


44		• AB CONCENTRATED GROWTH FUND

Management of the Fund

Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested directors (the “directors”) of AB Cap Fund, Inc. (the “Company”) unanimously approved the continuance of the Company’s Advisory Agreement with the Adviser in respect of AB Concentrated Growth Fund (the “Fund”) at a meeting held on May 3-5, 2016 (the “Meeting”).

Prior to approval of the continuance of the Advisory Agreement, the directors had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed continuance of the Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The directors also reviewed an independent evaluation prepared by the Company’s Senior Officer (who is also the Company’s Independent Compliance Officer) of the reasonableness of the advisory fee, in which the Senior Officer concluded that the contractual fee for the Fund was reasonable. The directors also discussed the proposed continuance in private sessions with counsel and the Company’s Senior Officer.

The directors considered their knowledge of the nature and quality of the services provided by the Adviser to the Fund gained from their experience as directors or trustees of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AB Funds. The directors noted that they have four regular meetings each year, at each of which they receive presentations from the Adviser on the investment results of the Fund and review extensive materials and information presented by the Adviser.

The directors also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the directors did not identify any particular information that was all-important or controlling, and different directors may have attributed different weights to the various factors. The directors determined that the selection of the Adviser to manage the Fund and the overall arrangements between the Fund and the Adviser, as provided in the Advisory Agreement, including the advisory fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their business


AB CONCENTRATED GROWTH FUND •			45

judgment. The material factors and conclusions that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services Provided

The directors considered the scope and quality of services provided by the Adviser under the Advisory Agreement, including the quality of the investment research capabilities of the Adviser and the other resources it has dedicated to performing services for the Fund. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Adviser. The directors also considered that the Advisory Agreement provides that the Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services to the Fund by employees of the Adviser or its affiliates. Requests for these reimbursements are made on a quarterly basis and subject to approval by the directors. Reimbursements, to the extent requested and paid, result in a higher rate of total compensation from the Fund to the Adviser than the fee rate stated in the Advisory Agreement. The directors noted that the methodology used to determine the reimbursement amounts had been reviewed by an independent consultant retained by the Company’s Senior Officer. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of the Fund’s other service providers, also was considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided to the Fund under the Advisory Agreement.

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues, expenses and related notes indicating the profitability of the Fund to the Adviser for the period ended December 31, 2014 and for calendar year 2015 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Company’s Senior Officer. The directors noted the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and understood that there are a number of potentially acceptable allocation methodologies for information of this type. The directors noted that the profitability information reflected all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to its subsidiaries that provide transfer agency, distribution and brokerage services to the Fund. The directors recognized that it is difficult to make comparisons of the profitability of the Advisory Agreement with the profitability of advisory contracts for unaffiliated funds because comparative information is not generally publicly available and is affected by numerous factors. The directors focused on the profitability of the Adviser’s relationship with the Fund before taxes and distribution expenses. The directors noted that the Fund was not profitable to the Adviser for 2014. The directors concluded that the Adviser’s level of profitability from its relationship with the Fund in 2015 was not unreasonable.


46		• AB CONCENTRATED GROWTH FUND

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their relationships with the Fund, including, but not limited to, benefits relating to soft dollar arrangements (whereby investment advisers receive brokerage and research services from brokers that execute agency transactions for their clients); 12b-1 fees and sales charges received by the Fund’s principal underwriter (which is a wholly owned subsidiary of the Adviser) in respect of certain classes of the Fund’s shares; brokerage commissions paid by the Fund to brokers affiliated with the Adviser; and transfer agency fees paid by the Fund to a wholly owned subsidiary of the Adviser. The directors recognized that the Adviser’s profitability would be somewhat lower without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

In addition to the information reviewed by the directors in connection with the Meeting, the directors receive detailed performance information for the Fund at each regular Board meeting during the year.

At the Meeting, the directors reviewed information prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an analytical service that is not affiliated with the Adviser, showing the performance of the Class A Shares of the Fund against a peer group and a peer universe selected by Broadridge, and information prepared by the Adviser showing performance of the Class A Shares against a broad-based securities market index, in each case for the 1-year period ended February 29, 2016 and (in the case of comparisons with the broad-based securities market index) the period since inception. Based on their review, the directors concluded that the Fund’s investment performance was acceptable.

Advisory Fees and Other Expenses

The directors considered the advisory fee rate paid by the Fund to the Adviser and information prepared by Broadridge concerning advisory fee rates paid by other funds in the same Broadridge category as the Fund at a common asset level. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees paid by other funds. The directors considered the Fund’s pro forma contractual advisory fee rate reflecting a 20 basis point advisory fee waiver by the Adviser effective since March 1, 2014 against a peer group median and took into account the impact on the advisory fee rate of the administrative expense reimbursement paid to the Adviser in the latest fiscal year. The directors also noted that the Adviser’s agreement to waive 20 basis points so the Fund’s net advisory fee would be 80 basis points expires on October 31, 2016. The directors discussed with the Adviser the potential for extending the existing advisory fee waiver agreement or making it permanent, and approved continuance of the


AB CONCENTRATED GROWTH FUND •			47

Advisory Agreement contingent on the Adviser either reducing the contractual fee to 80 basis points or agreeing to extend the waiver for at least another one year period when it expires on October 31, 2016.

The directors also considered the Adviser’s fee schedule for institutional clients pursuing a similar investment style. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and the evaluation from the Company’s Senior Officer and noted the differences between the Fund’s fee schedule, on the one hand, and the institutional fee schedule and the schedule of fees charged to any offshore funds and any sub-advised funds, on the other. The directors noted that the Adviser may, in some cases, agree to fee rates with large institutional clients that are lower than those reviewed by the directors and that they had previously discussed with the Adviser its policies in respect of such arrangements.

The Adviser reviewed with the directors the significantly greater scope of the services it provides to the Fund relative to institutional, offshore fund and sub-advised fund clients. In light of the substantial differences in services rendered by the Adviser to institutional, offshore fund and sub-advised fund clients as compared to funds such as the Fund, the directors considered these fee comparisons inapt and did not place significant weight on them in their deliberations.

The directors noted that the Fund may invest in shares of exchange-traded funds (“ETFs”), subject to the restrictions and limitations of the Investment Company Act of 1940 as these may be varied as a result of exemptive orders issued by the SEC. The directors also noted that ETFs pay advisory fees pursuant to their advisory contracts. The directors concluded, based on the Adviser’s explanation of how it may use ETFs when they are the most cost-effective way to obtain desired exposures for a fund or to temporarily “equitize” cash inflows pending purchases of underlying securities, that the advisory fee for the Fund would be paid for services that would be in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.

The directors also considered the total expense ratio of the Class A shares of the Fund in comparison to a peer group and a peer universe selected by Broadridge. The Class A expense ratio of the Fund was based on the Fund’s latest fiscal year. The directors noted the effects of any fee waivers and/or expense reimbursements as a result of an undertaking by the Adviser. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s Broadridge category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Fund by others. Based on their review, the directors concluded that the Fund’s expense ratio was acceptable.


48		• AB CONCENTRATED GROWTH FUND

Economies of Scale

The directors noted that the advisory fee schedule for the Fund does not contain breakpoints and that they had discussed their strong preference for breakpoints in advisory contracts with the Adviser. The directors took into consideration prior presentations by an independent consultant on economies of scale in the mutual fund industry and for the AB Funds, and by the Adviser concerning certain of its views on economies of scale. The directors also had requested and received from the Adviser certain updates on economies of scale in advance of the Meeting. The directors believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The directors noted that there is no established methodology for setting breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many funds do not have breakpoints at all. The directors informed the Adviser that they would monitor the Fund’s assets (which were well below the level at which they would anticipate adding an initial breakpoint) and its profitability to the Adviser and anticipated revisiting the question of breakpoints in the future if circumstances warranted doing so.


AB CONCENTRATED GROWTH FUND •			49

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT¹

The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and AB Cap Fund, Inc. (the “Fund”), in respect of AB Concentrated Growth Fund (the “Portfolio”),² prepared by Philip L. Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by the August 2004 agreement between the Adviser and the New York State Attorney General (the “NYAG”). The Senior Officer’s evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the “40 Act”) and applicable state law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Portfolio which was provided to the Directors in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement.

The Senior Officer’s evaluation considered the following factors:

Advisory fees charged to institutional and other clients of the Adviser for like services;

Advisory fees charged by other mutual fund companies for like services;

Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit;

Profit margins of the Adviser and its affiliates from supplying such services;

Possible economies of scale as the Portfolio grows larger; and

Nature and quality of the Adviser’s services including the performance of the Portfolio.

The Senior Officer’s fee evaluation was completed on April 21, 2016 and discussed with the Board of Directors in May 3-5, 2016.

Future references to the Fund and the Portfolio do not include “AB.” References in the fee summary pertaining to performance and expense ratios refer to Class A shares of the Portfolio.


50		• AB CONCENTRATED GROWTH FUND

of what Section 36(b) requires: to face liability under Section 36(b), “an investment adviser must charge a fee that is so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s length bargaining.” Jones v. Harris Associates L.P., 130 S. Ct. 1418 (2010). In the Jones decision, the Court stated the Gartenberg approach fully incorporates the correct understanding of fiduciary duty within the context of Section 36(b) and noted with approval that “Gartenberg insists that all relevant circumstances be taken into account” and “uses the range of fees that might result from arm’s length bargaining as the benchmark for reviewing challenged fees.”³

ADVISORY FEES, NET ASSETS, & EXPENSE RATIOS

The Adviser proposed that the Portfolio pays the advisory fee set forth below for receiving the services to be provided pursuant to the Investment Advisory Agreement.⁴ Also shown are the Portfolio’s net assets on March 31, 2016.


Portfolio	Advisory Fee Based on % of Average Daily Net Assets	Net Assets 3/31/16 ($MIL)
Concentrated Growth Fund	1.00% of average daily net assets	$363.7

	The Adviser has contractually agreed to waive 0.20% of its advisory fee effective until October 31, 2016.

The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Portfolio. During the Portfolio’s most recently completed fiscal year, the Adviser received $62,489 (0.042% of the Portfolio’s average daily net assets) for such services.

Jones v. Harris at 1427.

Most of the AB Mutual Funds, which the Adviser manages, were affected by the Adviser’s settlement with the NYAG; however, the Portfolio was not in existence at the time of the settlement, and does not follow the fee schedules established at the time.


AB CONCENTRATED GROWTH FUND •			51

Adviser upon 60 days’ prior notice by the Adviser. In addition, set forth below are the Portfolio’s gross expense ratios for the most recent semi-annual period:⁵


Portfolio	Expense Cap Pursuant to Expense Limitation Undertaking			Gross Expense Ratio⁶			Fiscal Year End
Concentrated Growth Fund	Advisor	0.99	%		0.96	%		June 30
	Class A	1.24	%		1.21	%		(ratios as of
	Class C	1.99	%		1.96	%		December 31,
	Class R	1.49	%		1.46	%		2015)
	Class K	1.24	%		1.21	%
	Class I	0.99	%		0.96	%
	Class Z	0.99	%		0.94	%

I.	ADVISORY FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS.

The advisory fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Portfolio that are not provided to non-investment company clients and sub-advised investment companies include providing office space and personnel to serve as Fund Officers, who among other responsibilities make the certifications required under the Sarbanes-Oxley Act of 2002, and coordinating with and monitoring the Portfolio’s third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Portfolio are more costly than those for institutional assets due to the greater complexities and time required for investment companies, although the Adviser is reimbursed for providing some of these services. Also, retail mutual funds managed by the Adviser are widely held. Servicing the Portfolio’s investors is more time consuming and labor intensive compared to institutional clients since the Adviser needs to communicate with a more extensive network of financial intermediaries and shareholders. The Adviser also believes that it incurs substantial entrepreneurial risk when offering a new mutual fund since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be competitive and assets are acquired one account at a time. In addition, managing the cash flow of an investment company may be more difficult than managing that of a stable pool of assets, such as an institutional account with little cash movement in either direction, particularly, if a fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable pool of assets. Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational

Semi-annual total expense ratios are unaudited.

Annualized.


52		• AB CONCENTRATED GROWTH FUND

damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and reputational risks associated with institutional accounts are greater than previously thought, although still not equal to those related to the mutual fund industry.

Notwithstanding the Adviser’s view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, the Supreme Court has indicated consideration should be given to the advisory fees charged to institutional accounts with a similar investment style as the Portfolio.⁷ In addition to the AB Institutional fee schedule, set forth below is what would have been the effective advisory fee of the Portfolio had the AB Institutional fee schedule been applicable to the Portfolio based on March 31, 2016 net assets.⁸

Portfolio

Net Assets

03/31/16

($MM)

AB Institutional

Fee Schedule

Effective
AB Inst.

Adv. Fee
(%)

Portfolio

Advisory

Fee

(%)

Concentrated Growth Fund

$363.7

Concentrated U.S. Growth

0.80% on 1st $50 million

0.70% on next $50 million

0.60% on the balance

Minimum Account Size: $50m

0.641%

0.800⁹

The Adviser also manages and sponsors retail mutual funds, which are organized in jurisdictions outside the United States, generally Luxembourg and Japan, and sold to non-United States resident investors. The Adviser charges the fees set forth below for Concentrated U.S. Equity Portfolio, a Luxembourg fund that has a somewhat similar investment style as the Portfolio:


Portfolio	Luxembourg Fund	Fee¹⁰
Concentrated Growth Fund	Concentrated U.S. Equity Portfolio
	Class A	1.60%
	Class I (Institutional)	0.80%

The Supreme Court stated that “courts may give such comparisons the weight that they merit in light of the similarities and differences between the services that the clients in question require, but the courts must be wary of inapt comparisons.” Among the significant differences the Supreme Court noted that may exist between services provided to mutual funds and institutional accounts are “higher marketing costs.” Jones v. Harris at 1428.

The Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are negotiated vary based upon each client relationship.

The advisory fee for the Portfolio reflects the 20 basis points advisory fee waiver.

Class A shares of the Luxembourg funds are charged an “all-in” fee, which covers investment advisory and distribution related services.


AB CONCENTRATED GROWTH FUND •			53

The Adviser has represented that it does not provide sub-advisory investment services to other investment companies that have a substantially similar investment style as the Portfolio.

II.

MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.

Broadridge Financial Solutions, Inc. (“Broadridge”), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Portfolio with fees charged to other investment companies for similar services offered by other investment advisers.¹¹^,¹² Broadridge’s analysis included the comparison of the Portfolio’s contractual management fee, estimated at the approximate current asset level of the Portfolio, to the median of the Portfolio’s Broadridge Expense Group (“EG”)¹³ and the Fund’s contractual management fee ranking.¹⁴

Broadridge describes an EG as a representative sample of comparable funds. Broadridge’s standard methodology for screening funds to be included in an EG entails the consideration of several fund criteria, including fund type, Lipper investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, expense components and attributes. An EG will typically consist of seven to twenty funds.

The Portfolio’s original EG had an insufficient number of peers in the view of the Senior Officer and the Adviser. Consequently, Broadridge expanded the EG of the Portfolio to include peers that had a similar but not the same Lipper investment classification/objective.

The Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since “these comparisons are problematic because these fees, like those challenged, may not be the product of negotiations conducted at arm’s length.” Jones v. Harris at 1429.

On June 5, 2015, Broadridge acquired the Fiduciary Services and Competitive Intelligence unit, i.e., the group responsible for providing the Portfolio’s 15(c) reports, from Thomson Reuters’ Lipper division. The group that maintains Lipper’s expense and performance databases and investment classification/objective remains a part of Thomson Reuters’ Lipper division. Accordingly, the Portfolio’s investment classification/objective continued to be determined by Lipper.

Broadridge does not consider average account size when constructing EGs. Funds with relatively small average account sizes tend to have higher transfer agent expense ratios than comparable sized funds that have relatively large average account sizes. There are limitations to Lipper expense category data because different funds categorize expenses differently.

The contractual management fee is calculated by Broadridge using the Fund’s contractual management fee rate at the hypothetical asset level. The hypothetical asset level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Broadridge’s total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of “1” would mean that Fund had the lowest effective fee rate in the Broadridge peer group.


54		• AB CONCENTRATED GROWTH FUND


Portfolio	Contractual Management Fee (%)		Broadridge EG Median (%)		Broadridge EG Rank
Concentrated Growth Fund¹⁵		1.000		0.766	13/14
*pro-forma¹⁶*		*0.800*		*0.766*	*8/14*

However, because Broadridge had expanded the EG of the Portfolio, under Broadridge’s standard guidelines, the Broadridge Expense Universe (“EU”) was also expanded to include the universe of those peers that had a similar but not the same Lipper investment classification/objective. A “normal” EU will include funds that have the same investment classification/objective as the subject Portfolio.¹⁷ Set forth below is Broadridge’s comparison of the Portfolio’s total expense ratio and the median of the Portfolio’s EG and EU. The Portfolio’s total expense ratio rankings are also shown.

Portfolio

Total
Expense

Ratio (%)¹⁸

Broadridge

Median (%)

Broadridge

Group

Rank

Broadridge
EU

Median (%)

Broadridge
EU

Rank

Concentrated Growth Fund¹⁹^,²⁰

1.235

1.208

8/14

1.221

49/90

Based on this analysis, considering pro-forma information where available, the Portfolio has equally favorable rankings on a contractual management fee basis and on a total expense ratio basis.

III.

COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.

The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s profitability in connection with investment advisory services provided to the Portfolio. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and allocations utilized by both profitability systems. See Section IV for additional discussion.

The Portfolio’s EG includes the Portfolio, five other Multi-Cap Growth (“MLGE”) funds, and eight Large-Cap Growth (“LCGE”) funds.

Pro-forma contractual management fee reflects the Portfolio’s a 20 basis points advisory fee waiver, effective until October 31, 2016.

Except for asset (size) comparability, Broadridge uses the same criteria for selecting an EG peer when selecting an EU peer. Unlike the EG, the EU allows for the same adviser to be represented by more than just one fund.

Most recently completed fiscal year total expense ratio. The total expense ratio shown was estimated by Lipper using rounded Form-NSAR data. Accordingly, there may be slight differences in the total expense ratio estimated by Lipper and that of the Adviser on page 4.

The Portfolio’s EU includes the Portfolio, EG, and all other MLGE and LCGE funds, excluding outliers.

The Portfolio’s total expense ratio reflects the 20 basis points advisory fee waiver, since the waiver was in effect throughout the Portfolio’s fiscal year.


AB CONCENTRATED GROWTH FUND •			55

IV.

PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.

The Portfolio’s profitability information, prepared by the Adviser for the Board of Directors, was reviewed by the Senior Officer and the consultant. The Adviser’s profitability from providing investment advisory services to the Portfolio increased during calendar year 2015, relative to 2014.

In addition to the Adviser’s direct profits from managing the Portfolio, certain of the Adviser’s affiliates have business relationships with the Portfolio and may earn a profit from providing other services to the Portfolio. The courts have referred to this type of business opportunity as “fall-out benefits” to the Adviser and indicated that such benefits should be factored into the evaluation of the total relationship between the Portfolio and the Adviser. Neither case law nor common business practice precludes the Adviser’s affiliates from earning a reasonable profit on this type of relationship provided the affiliates’ charges and services are competitive and the relationship otherwise complies with the 40 Act restrictions. These affiliates provide transfer agent, distribution and brokerage related services to the Portfolio, and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent deferred sales charges (“CDSC”) and brokerage commissions. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur.

AllianceBernstein Investments, Inc. (“ABI”), an affiliate of the Adviser, is the Fund’s principal underwriter. ABI and the Adviser have disclosed in the Portfolio’s prospectus that they may make revenue sharing payments from their own resources, in addition to resources derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Portfolio. The total amount paid to a financial intermediary associated with the sale of shares 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 the average daily net assets attributable to that firm over the year. In 2015, ABI paid approximately 0.05% of the average monthly assets of the AB Mutual Funds or approximately $20 million for distribution services and educational support (revenue sharing payments).

During the Portfolio’s most recently completed fiscal year, ABI received from the Portfolio $9,946, $56,233 and $930 in front-end sales charges, Rule 12b-1 and CDSC fees, respectively.

Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc. (“ABIS”), the affiliated transfer agent for the Portfolio, are based on the level of the network account and the class of shares held by the account. ABIS also receives a fee per shareholder sub-account for each account maintained by an intermediary on an omnibus basis. During the Portfolio’s most recently completed fiscal year, ABIS received $26,746 in fees from the Portfolio.


56		• AB CONCENTRATED GROWTH FUND

The Portfolio effected brokerage transactions during the most recently completed fiscal year through the Adviser’s affiliate, Sanford C. Bernstein & Co., LLC (“SCB & Co.”) and/or its U.K. affiliate, Sanford C. Bernstein Limited (“SCB Ltd.”), collectively “SCB,” and paid commissions for such transactions. The Adviser represented that SCB’s profitability from any business conducted with the Portfolio is comparable to the profitability of SCB’s dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks (“ECNs”) derived from trading for its clients. These credits and charges are not being passed onto any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for its clients. These soft dollar benefits reduce the Adviser’s cost of doing business and increase its profitability.

V.	POSSIBLE ECONOMIES OF SCALE.

The Adviser has indicated that economies of scale are being shared with shareholders of the registered investment companies it manages through pricing to scale, breakpoints, fee reductions/waivers and enhancement to services.

In May 2012, an independent consultant, retained by the Senior Officer, provided the Board of Directors information on the Adviser’s firm-wide average costs from 2005 through 2011 and the potential economies of scale. The independent consultant noted that from 2005 through 2007 the Adviser experienced significant growth in assets under management (“AUM”). During this period, operating expenses increased, in part to keep up with growth, and in part reflecting market returns. However, from 2008 through the first quarter of 2009, AUM rapidly and significantly decreased due to declines in market value and client withdrawals. When AUM rapidly decreased, some operating expenses categories, including base compensation and office space, adjusted more slowly during this period, resulting in an increase in average costs. Since 2009, AUM have experienced less significant changes. The independent consultant noted that changes in operating expenses reflect changes in business composition and business practices in response to changes in financial markets. Finally, the independent consultant concluded that the increase in average cost and the decline in net operating margin across the Adviser since late 2008 are inconsistent with the view that there are currently reductions in average costs due to economies of scale that can be shared with the AB Mutual Funds managed by the Adviser through lower fees.


AB CONCENTRATED GROWTH FUND •			57

In February 2008, the independent consultant provided the Board of Directors an update of Deli’s study on advisory fees and various fund characteristics.²¹^,²² The independent consultant first reiterated the results of his previous two dimensional comparison analysis (fund size and family size) with the Board of Directors.²³ The independent consultant then discussed the results of the regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained by various factors, but substantially by fund AUM, family AUM, index fund indicator and investment style. The independent consultant also compared the advisory fees of the AB Mutual Funds to similar funds managed by 19 other large asset managers, regardless of the fund size and each Adviser’s proportion of mutual fund assets to non-mutual fund assets.

VI.

NATURE AND QUALITY OF THE ADVISER’S SERVICES, INCLUDING THE PERFORMANCE OF THE FUND.

With assets under management of approximately $479 billion as of March 31, 2016, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Portfolio.

The information prepared by Broadridge shows the 1 year performance return and rankings²⁴ of the Portfolio relative to its Broadridge Performance Group (“PG”) and Broadridge Performance Universe (“PU”)²⁵ for the period ended February 29, 2016.²⁶

The Deli study, originally published in 2002 based on 1997 data and updated for the February 2008 Presentation, may be of diminished value due to the age of the data used in the presentation and the changes experienced in the industry over the last four years. Source: Deli, Daniel N. “Mutual Fund Advisory Contracts: An Empirical Investigation.” Journal of Finance, 57(1): 109-133 (2002).

As mentioned previously, the Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since the fees may not be the product of negotiations conducted at arm’s length. See Jones V. Harris at 1429.

The two dimensional analysis showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.

The performance returns and rankings of the Portfolio are for the Portfolio’s Class A shares. Performance returns of the Portfolio were provided by Broadridge.

The Portfolio’s PG/PU is not identical to the EG/EU as the criteria for including/excluding a Portfolio from a PG/PU is somewhat different from that of an EG/EU.

The current Lipper investment classification/objective dictates the PG and PU throughout the life of the Portfolio even if the Portfolio had a different investment classification/objective at a different point in time.


58		• AB CONCENTRATED GROWTH FUND

Portfolio
Return (%)

Median (%)

PG Rank

PU Rank

Concentrated Growth Fund

1 year

-9.39

-7.75

-10.27

5/6

40/96

Set forth below are the 1 year and since inception performance returns of the Portfolio (in bold)²⁷ versus its benchmark.²⁸ Portfolio and benchmark volatility and reward-to-variability ratio (“Sharpe Ratio”) information is also shown.²⁹


			Periods Ending February 29, 2016 Annualized Performance
	1		Since		Annualized				Risk Period (Year)
	Year (%)		Inception (%)		Volatility (%)		Sharpe (%)		Risk Period (Year)
Concentrated Growth Fund		-9.39		3.07		12.08		-0.72		1
S&P 500 Index		-6.19		4.09		12.30		-0.44		1
Inception Date: February 28, 2014

CONCLUSION:

The Senior Officer recommended that the Directors consider discussing with the Adviser the extension of the advisory fee waiver. The Senior Officer also noted the Portfolio’s advisory fee schedule lacks potential for sharing of economies of scale through breakpoints, although the net asset level of the Portfolio remains relatively low. The Senior Officer’s conclusion is that the proposed advisory fee for the Portfolio is reasonable and within the range of what would have been negotiated at arm’s-length in light of all the surrounding circumstances. This conclusion in respect of the Portfolio is based on an evaluation of all of these factors and no single factor was dispositive.

Dated: June 2, 2016

The performance returns and risk measures shown in the table are for the Class A shares of the Portfolio.

The Adviser provided Portfolio and benchmark performance return information for periods through February 29, 2016.

Portfolio volatility and Sharpe Ratio information was obtained through Lipper LANA, a database maintained by Lipper. Benchmark volatility and Sharpe Ratio information was calculated by the Senior Officer using standard Lipper methodology. Volatility is a statistical measure of the tendency of a market price or yield to vary over time. A Sharpe Ratio is a risk adjusted measure of return that divides a fund’s return in excess of the riskless return by the fund’s standard deviation. A fund with a greater volatility would be viewed as more risky than a fund with equivalent performance but lower volatility; for that reason, a greater return would be demanded for the more risky fund. A fund with a higher Sharpe Ratio would be viewed as better performing than a fund with a lower Sharpe Ratio.


AB CONCENTRATED GROWTH FUND •			59

THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

AB FAMILY OF FUNDS

US EQUITY

US Core

Core Opportunities Fund

Select US Equity Portfolio

US Growth

Concentrated Growth Fund

Discovery Growth Fund

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

US Value

Discovery Value Fund

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Value Fund

INTERNATIONAL/ GLOBAL EQUITY

International/Global Core

Global Core Equity Portfolio

Global Equity & Covered Call Strategy Fund

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International Portfolio

International Strategic Core Portfolio

Tax-Managed International Portfolio

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Asia ex-Japan Equity Portfolio

International Value Fund

FIXED INCOME

Municipal

High Income Municipal Portfolio

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Intermediate New York Municipal Portfolio

FIXED INCOME (continued)

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Portfolio

National Portfolio

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ALTERNATIVES

All Market Real Return Portfolio

Credit Long/Short Portfolio

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Long/Short Multi-Manager Fund

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Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

Emerging Markets Multi-Asset Portfolio

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MULTI-ASSET (continued)

Target-Date

Multi-Manager Select Retirement Allocation Fund

Multi-Manager Select 2010 Fund

Multi-Manager Select 2015 Fund

Multi-Manager Select 2020 Fund

Multi-Manager Select 2025 Fund

Multi-Manager Select 2030 Fund

Multi-Manager Select 2035 Fund

Multi-Manager Select 2040 Fund

Multi-Manager Select 2045 Fund

Multi-Manager Select 2050 Fund

Multi-Manager Select 2055 Fund

Wealth Strategies

Balanced Wealth Strategy

Conservative Wealth Strategy

Wealth Appreciation Strategy

Tax-Managed Balanced Wealth Strategy

Tax-Managed Conservative Wealth Strategy

Tax-Managed Wealth Appreciation Strategy

CLOSED-END FUNDS

AB Multi-Manager Alternative Fund

Alliance California Municipal Income Fund

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

We also offer Government Exchange Reserves, which serves as the money market fund exchange vehicle for the AB mutual funds. An investment in Government Exchange Reserves is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.


60		• AB CONCENTRATED GROWTH FUND

AB Family of Funds

LOGO

AB CONCENTRATED GROWTH FUND

1345 Avenue of the Americas

New York, NY 10105

800.221.5672

CG-0151-0616 LOGO

JUN^06.30.16

LOGO

ANNUAL REPORT

AB CONCENTRATED
INTERNATIONAL GROWTH
PORTFOLIO

Investment Products Offered

• Are Not FDIC Insured

• May Lose Value

• Are Not Bank Guaranteed

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AB family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the Adviser of the funds.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein^® is a registered service mark used by permission of the owner, AllianceBernstein L.P.

August 9, 2016

Annual Report

This report provides management’s discussion of fund performance for AB Concentrated International Growth Portfolio (the “Fund”), for the annual reporting period ended June 30, 2016.

Investment Objective and Policies

The Fund’s investment objective is to seek long-term growth of capital. AllianceBernstein L.P. (the “Adviser”) seeks to achieve the Fund’s investment objective by investing, under normal circumstances, primarily in common stocks of non-US companies, and in companies in at least three countries other than the United States.

The Fund will invest in companies that are determined by the Adviser to offer favorable long-term growth potential and that are trading at attractive valuations. The Adviser will employ an appraisal method which attempts to measure each prospective company’s quality and growth rate by numerous factors. Such factors will include: a company’s record and projections of profit and earnings growth, accuracy and availability of information with respect to the company, success and experience of management, accessibility of management to the Adviser, product lines and competitive position both in the United States and abroad, lack of cyclicality, large market capitalization and liquidity of the company’s securities. The Adviser will compare these results to the characteristics of the general stock markets to determine the relative attractiveness of each company at a given time. The Adviser will weigh economic, political and market factors in making investment

decisions; this appraisal technique attempts to measure each investment candidate not only against other stocks of the same industry and region, but also against a broad spectrum of investments.

The Fund will invest in a relatively small number of individual stocks, generally 25 to 35 companies. In addition, the Fund is a non-diversified Fund as that term is defined in the Investment Company Act of 1940, which means that it may invest more of its assets in a smaller number of companies than a diversified fund. The Fund will primarily invest in mid- and large-capitalization companies, which are currently defined for the Fund as companies that have market capitalizations of $2.0 billion or more. The Fund’s holdings of non-US companies may include some companies located in emerging markets, and at times emerging-market companies may make up a significant portion of the Fund.

Investment Results

The table on page 5 shows the Fund’s performance compared to its benchmark, the Morgan Stanley Capital International Europe, Australasia, Far East (“MSCI EAFE”) Index (net), for the six- and 12-month periods ended June 30, 2016.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			1

All share classes of the Fund underperformed the benchmark for both periods, before sales charges. During the 12-month period, top absolute contributors to performance included Genmab, Reckitt Benckiser and Hoshizaki. While sector and security selection were positive, currency selection detracted. An underweight in the financials sector helped performance, while security selection in the consumer discretionary sector detracted from performance, relative to the benchmark. Top absolute detractors included Lenovo, Hugo Boss and Vipshop.

During the six-month period, while security selection was positive, sector and currency selection detracted. Top absolute contributors to performance included Genmab, Reckitt Benckiser and Hoshizaki. Sector and stock selection were negative. Top absolute detractors included Lenovo, Azimut and Prudential.

The Fund did not utilize derivatives during either period.

Market Review and Investment Strategy

International equity markets posted negative returns during the six- and 12-month periods, and volatility emerged. In this environment, the Fund’s Senior Investment Management Team (the “Team”) remained focused on sustainably growing the underlying earnings power of the Fund. The Team believes the prospects for the global economy remain promising. In the Team’s view, this economic growth should drive continued, but potentially more modest, earnings growth over time. That said, the Team believes a selective investment approach is more appropriate, especially if margin gains are more limited in the next couple of years. The Team believes the Fund is well positioned for the current environment.

On June 23, 2016, the UK voted to leave the European Union (“EU”) in a popular referendum. At this moment in time, the UK remains a member of the EU and the rules and regulations remain unchanged, as do all the protections in place. Exactly how the UK’s role in the EU will change will become clear over time. The Adviser continues to monitor the heightened market volatility.


2		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

DISCLOSURES AND RISKS

Benchmark Disclosure

The MSCI EAFE Index (net) is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI EAFE Index (free float-adjusted market-capitalization weighted) represents the equity market performance of developed markets, excluding the US & Canada. MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices, any securities or financial products. This report is not approved, reviewed or produced by MSCI. An investor cannot invest directly in an index, and its results are not indicative of the performance for any specific investment, including the Fund.

A Word About Risk

Market Risk: The value of the Fund’s assets will fluctuate as the stock or bond market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events that affect large portions of the market. It includes the risk that a particular style of investing, such as the Fund’s growth approach, may underperform the market generally.

Foreign (Non-US) Risk: Investments in securities of non-US issuers may involve more risk than those of US issuers. These securities may fluctuate more widely in price and may be less liquid due to adverse market, economic, political, regulatory or other factors. These risks may be heightened with respect to investments in emerging-market countries, where there may be an increased amount of economic, political and social instability.

Emerging Market Risk: Investments in emerging-market countries may have more risk because the markets are less developed and less liquid as well as being subject to increased economic, political, regulatory or other uncertainties.

Currency Risk: Fluctuations in currency exchange rates may negatively affect the value of the Fund’s investments or reduce its returns.

Focused Portfolio/Non-Diversification Risk: Investing in a limited number of companies, or investing more of the Fund’s assets in a smaller number of companies, may have more risk because changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value (“NAV”).

Capitalization Risk: Investments in mid-capitalization companies may be more volatile than investments in large-capitalization companies. Investments in mid-capitalization companies may have additional risks because these companies have limited product lines, markets or financial resources.

Management Risk: The Fund is subject to management risk because it is an actively managed investment fund. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Fund, but there is no guarantee that its techniques will produce the intended results.

These risks are fully discussed in the Fund’s prospectus. As with all investments, you may lose money by investing in the Fund.

An Important Note About Historical Performance

The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance shown on the following pages represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.abfunds.com. The Fund has been in operation only for a short period of

(Disclosures, Risks and Note about Historical Performance continued on next page)


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			3

Disclosures and Risks

DISCLOSURES AND RISKS

(continued from previous page)

time, and therefore has a very limited historical performance period. This limited performance period is unlikely to be representative of the performance the Fund will achieve over a longer period.


4		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Disclosures and Risks

HISTORICAL PERFORMANCE



THE FUND VS. ITS BENCHMARK PERIODS ENDED JUNE 30, 2016 (unaudited)	NAV Returns
	6 Months		12 Months
AB Concentrated International Growth Portfolio
Class A		-8.14%		-13.39%

Class C		-8.51%		-13.93%

Advisor Class*		-8.03%		-13.13%

MSCI EAFE Index (net)		-4.42%		-10.16%

* This share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

GROWTH OF A $10,000 INVESTMENT IN THE FUND

4/15/15^* TO 6/30/16 (unaudited)

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Concentrated International Growth Fund Class A shares (from 4/15/2015^* to 6/30/2016) as compared to the performance of the Fund’s benchmark. The chart reflects the deduction of the maximum 4.25% sales charge from the initial $10,000 investment in the Fund and assumes the reinvestment of dividends and capital gains distributions.

Inception date: 4/15/2015.

See Disclosures, Risks and Note about Historical Performance on pages 3-4.

(Historical Performance continued on next page)


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			5

Historical Performance

HISTORICAL PERFORMANCE

(continued from previous page)


AVERAGE ANNUAL RETURNS AS OF JUNE 30, 2016 (unaudited)
	NAV Returns			SEC Returns (reflects applicable sales charges)

Class A Shares
1 Year		-13.39	%		-17.04	%
Since Inception*		-12.91	%		-15.96	%

Class C Shares
1 Year		-13.93	%		-14.79	%
Since Inception*		-13.51	%		-13.51	%

Advisor Class Shares^†
1 Year		-13.13	%		-13.13	%
Since Inception*		-12.69	%		-12.69	%

The Fund’s prospectus fee table shows the Fund’s total annual operating expense ratios as 18.01%, 18.73% and 17.75% for Class A, Class C and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratios exclusive of acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs to 1.30%, 2.05% and 1.05% for Class A, Class C and Advisor Class shares, respectively. These waivers/reimbursements may not be terminated before October 31, 2016. Any fees waived 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. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

Inception date: 4/15/2015.

^†

This share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Fund.

See Disclosures, Risks and Note about Historical Performance on pages 3-4.

(Historical Performance continued on next page)


6		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Historical Performance

HISTORICAL PERFORMANCE

(continued from previous page)


SEC AVERAGE ANNUAL RETURNS AS OF THE MOST RECENT CALENDAR QUARTER-END JUNE 30, 2016 (unaudited)
	SEC Returns (reflects applicable sales charges)

Class A Shares
1 Year		-17.04	%
Since Inception*		-15.96	%

Class C Shares
1 Year		-14.79	%
Since Inception*		-13.51	%

Advisor Class Shares^†
1 Year		-13.13	%
Since Inception*		-12.69	%

Inception date: 4/15/2015.

^†

See Disclosures, Risks and Note about Historical Performance on pages 3-4.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			7

Historical Performance

EXPENSE EXAMPLE

(unaudited)

This Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account Value January 1, 2016		Ending Account Value June 30, 2016		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	918.60	$	6.20		1.30	%
Hypothetical**	$	1,000	$	1,018.40	$	6.52		1.30	%
Class C
Actual	$	1,000	$	914.90	$	9.76		2.05	%
Hypothetical**	$	1,000	$	1,014.67	$	10.27		2.05	%
Advisor Class
Actual	$	1,000	$	919.70	$	5.01		1.05	%
Hypothetical**	$	1,000	$	1,019.64	$	5.27		1.05	%

Expenses are equal to the classes’ annualized expense ratios, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period), respectively.

Assumes 5% annual return before expenses.


8		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Expense Example

PORTFOLIO SUMMARY

June 30, 2016 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $1.7

LOGO

All data are as of June 30, 2016. The Fund’s sector and country breakdowns are expressed as a percentage of total investments and may vary over time.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			9

Portfolio Summary

TEN LARGEST HOLDINGS^*

June 30, 2016 (unaudited)


Company	U.S. $ Value		Percent of Net Assets
Reckitt Benckiser Group PLC	$	90,244		5.3	%
ARM Holdings PLC		87,037		5.1
HDFC Bank Ltd. (ADR)		84,264		5.0
Assa Abloy AB – Class B		73,445		4.3
Roche Holding AG		71,247		4.2
Alibaba Group Holding Ltd. (Sponsored ADR)		69,986		4.1
ASML Holding NV		68,907		4.1
Genmab A/S		67,469		4.0
Prudential PLC		65,670		3.9
BT Group PLC		56,671		3.4
	$	734,940		43.4	%

Long-term investments.


10		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Ten Largest Holdings

PORTFOLIO OF INVESTMENTS

June 30, 2016


Company	Shares		U.S. $ Value


COMMON STOCKS – 98.4%
Information Technology – 23.1%
Electronic Equipment, Instruments & Components – 1.7%
Murata Manufacturing Co., Ltd.		260	$	29,150


Internet Software & Services – 7.1%
Alibaba Group Holding Ltd. (Sponsored ADR)^(a)		880		69,986
Tencent Holdings Ltd.		2,200		50,525

				120,511

IT Services – 2.9%
Worldpay Group PLC^(a)(b)		13,629		49,605


Semiconductors & Semiconductor Equipment – 9.2%
ARM Holdings PLC		5,730		87,037
ASML Holding NV		700		68,907

				155,944

Technology Hardware, Storage & Peripherals – 2.2%
Lenovo Group Ltd.		60,000		36,470

				391,680

Consumer Staples – 15.5%
Beverages – 5.1%
SABMiller PLC (London)		920		53,653
Treasury Wine Estates Ltd.		4,850		33,702

				87,355

Household Products – 8.4%
Reckitt Benckiser Group PLC		900		90,244
Unicharm Corp.		2,300		51,676

				141,920

Personal Products – 2.0%
Kose Corp.		400		33,896

				263,171

Health Care – 15.5%
Biotechnology – 4.0%
Genmab A/S^(a)		370		67,469


Health Care Equipment & Supplies – 1.9%
Coloplast A/S – Class B		440		32,936


Health Care Providers & Services – 2.2%
Fresenius SE & Co. KGaA		501		36,812


Pharmaceuticals – 7.4%
Novo Nordisk A/S – Class B		1,000		53,853
Roche Holding AG		270		71,247

				125,100

				262,317


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			11

Portfolio of Investments


Company	Shares		U.S. $ Value


Consumer Discretionary – 13.0%
Auto Components – 2.2%
Continental AG		200	$	37,845


Hotels, Restaurants & Leisure – 5.9%
Accor SA		1,340		51,344
Merlin Entertainments PLC^(b)		8,290		48,819

				100,163

Multiline Retail – 2.5%
B&M European Value Retail SA		12,450		42,424


Textiles, Apparel & Luxury Goods – 2.4%
HUGO BOSS AG		710		40,365

				220,797

Industrials – 12.5%
Building Products – 4.3%
Assa Abloy AB – Class B		3,570		73,445


Electrical Equipment – 3.2%
Nidec Corp.		700		53,286


Machinery – 1.8%
FANUC Corp.		190		30,908


Trading Companies & Distributors – 3.2%
Ashtead Group PLC		3,737		53,379

				211,018

Financials – 11.2%
Banks – 5.0%
HDFC Bank Ltd. (ADR)		1,270		84,264


Capital Markets – 2.3%
Azimut Holding SpA		2,463		40,186


Insurance – 3.9%
Prudential PLC		3,870		65,670

				190,120

Materials – 4.2%
Chemicals – 1.1%
Essentra PLC		2,750		18,868


Construction Materials – 3.1%
CRH PLC (London)		1,780		52,196

				71,064

Telecommunication Services – 3.4%
Diversified Telecommunication Services – 3.4%
BT Group PLC		10,310		56,671


Total Common Stocks (cost $1,895,048)				1,666,838


12		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Portfolio of Investments


Company	Shares		U.S. $ Value


SHORT-TERM INVESTMENTS – 2.5%
Investment Companies – 2.5%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.25%^(c)(d) (cost $42,492)		42,492	$	42,492


Total Investments – 100.9% (cost $1,937,540)				1,709,330
Other assets less liabilities – (0.9)%				(14,739	)


Net Assets – 100.0%			$	1,694,591

(a)

Non-income producing security.

(b)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2016, the aggregate market value of these securities amounted to $98,424 or 5.8% of net assets.

(c)

Investment in affiliated money market mutual fund. The rate shown represents the 7-day yield as of period end.

(d)

To obtain a copy of the fund’s financial statements, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			13

Portfolio of Investments

STATEMENT OF ASSETS & LIABILITIES

June 30, 2016


Assets
Investments in securities, at value
Unaffiliated issuers (cost $1,895,048)	$	1,666,838
Affiliated issuers (cost $42,492)		42,492
Foreign currencies, at value (cost $3,927)		3,900
Receivable due from Adviser		62,243
Dividends receivable		4,483

Total assets		1,779,956

Liabilities
Audit and tax fee payable		39,943
Custody fee payable		22,138
Legal fee payable		15,673
Printing fee payable		5,538
Transfer Agent fee payable		17
Distribution fee payable		9
Accrued expenses		2,047

Total liabilities		85,365

Net Assets	$	1,694,591

Composition of Net Assets
Capital stock, at par	$	20
Additional paid-in capital		1,996,502
Undistributed net investment income		10,921
Accumulated net realized loss on investment transactions		(84,433	)
Net unrealized depreciation on investments and foreign currency denominated assets and liabilities		(228,419	)

	$	1,694,591

Net Asset Value Per Share—10 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

A	$	8,462		1,000	$	8.46	*

C	$	8,386		1,000	$	8.39

Advisor	$	1,677,743		198,000	$	8.47

The maximum offering price per share for Class A shares was $8.84 which reflects a sales charge of 4.25%.

See notes to financial statements.


14		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Statement of Assets & Liabilities

STATEMENT OF OPERATIONS

Year Ended June 30, 2016


Investment Income
Dividends
Unaffiliated issuers (net of foreign taxes withheld of $3,260)	$	29,106
Affiliated issuers		148		$	29,254

Expenses
Advisory fee (see Note B)		15,228
Distribution fee—Class A		22
Distribution fee—Class C		89
Transfer agency—Class C		5
Transfer agency—Advisor Class		110
Custodian		72,044
Administrative		66,763
Amortization of offering expenses		48,541
Audit and tax		43,245
Legal		29,906
Directors’ fees		21,937
Printing		6,775
Miscellaneous		9,519

Total expenses		314,184
Less: expenses waived and reimbursed by the Adviser (see Note B)		(295,262	)

Net expenses					18,922

Net investment income					10,332

Realized and Unrealized Loss on Investment and Foreign Currency Transactions
Net realized loss on:
Investment transactions					(83,625	)
Foreign currency transactions					(189	)
Net change in unrealized appreciation/depreciation of:
Investments					(182,380	)
Foreign currency denominated assets and liabilities					(229	)

Net loss on investment and foreign currency transactions					(266,423	)

Net Decrease in Net Assets from Operations				$	(256,091	)

See notes to financial statements.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			15

Statement of Operations

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended June 30, 2016			April 15, 2015^(a) to June 30, 2015
Increase (Decrease) in Net Assets from Operations
Net investment income	$	10,332		$	7,567
Net realized loss on investment transactions		(83,814	)		(7,408	)
Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities		(182,609	)		(45,810	)

Net decrease in net assets from operations		(256,091	)		(45,651	)
Dividends and Distributions to Shareholders from
Net investment income
Advisor Class		(3,307	)		– 0	–
Net realized gain on investment transactions
Class A		(2	)		– 0	–
Class C		(2	)		– 0	–
Advisor Class		(356	)		– 0	–
Capital Stock Transactions
Net increase		– 0	–		2,000,000

Total increase (decrease)		(259,758	)		1,954,349
Net Assets
Beginning of period		1,954,349			– 0	–

End of period (including undistributed net investment income of $10,921 and $1,524, respectively)	$	1,694,591		$	1,954,349

(a)

Commencement of operations.

See notes to financial statements.


16		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Statement of Changes in Net Assets

NOTES TO FINANCIAL STATEMENTS

June 30, 2016

NOTE A

Significant Accounting Policies

AB Cap Fund, Inc. (the “Company”), which is a Maryland corporation, is registered under the Investment Company Act of 1940 as an open-end management investment company. The Company operates as a series company currently comprised of 27 portfolios. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB Concentrated International Growth Portfolio (the “Fund”). The Fund has authorized the issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class 1 and Class 2 shares. Class B, Class R, Class K, Class I, Class Z, Class 1 and Class 2 shares are not currently offered. As of June 30, 2016, AllianceBernstein L.P. (the “Adviser”) was the sole shareholder of Class A, Class C and Advisor Class shares. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Advisor Class shares are sold without any initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All ten classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			17

Notes to Financial Statements

the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g. last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for 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 when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Such factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.


18		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Notes to Financial Statements

2. Fair Value Measurements

•

Level 1—quoted prices in active markets for identical investments

•

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			19

Notes to Financial Statements

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of June 30, 2016:

Investments in Securities:

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks:

Information Technology

69,986

321,694

– 0

–

391,680

Consumer Staples

– 0

–

263,171

– 0

–

263,171

Health Care

– 0

–

262,317

– 0

–

262,317

Consumer Discretionary

– 0

–

220,797

– 0

–

220,797

Industrials

– 0

–

211,018

– 0

–

211,018

Financials

84,264

105,856

– 0

–

190,120

Materials

– 0

–

71,064

– 0

–

71,064

Telecommunication Services

– 0

–

56,671

– 0

–

56,671

Short-Term Investments

42,492

– 0

–

– 0

–

42,492

Total Investments in Securities

196,742

1,512,588

^(a)

– 0

–

1,709,330

Other Financial Instruments^(b)

– 0

–

– 0

–

– 0

–

– 0

–

Total^(c)(d)

196,742

1,512,588

– 0

–

1,709,330

^(a)

A significant portion of the Portfolio’s foreign equity investments are categorized as Level 2 investments since they are valued using fair value prices based on third party vendor modeling tools to the extent available, see Note 1.A.

^(b)

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/depreciation on the instrument.

^(c)

An amount of $47,952 was transferred from Level 1 to Level 2 due to the above mentioned foreign equity fair valuation using third party vendor modeling tools during the reporting period.

^(d)

There were no transfers from Level 2 to Level 1 during the reporting period.

The Portfolio recognizes all transfers between levels of the fair value hierarchy assuming the financial instruments were transferred at the beginning of the reporting period.

The Committee is also responsible for monitoring the implementation of the pricing policies by the Adviser’s Pricing Group (the “Pricing Group”) and a


20		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Notes to Financial Statements

third party which performs certain pricing functions in accordance with the pricing policies. The Pricing Group is responsible for the oversight of the third party on a day-to-day basis. The Committee and the Pricing Group perform a series of activities to provide reasonable assurance of the accuracy of prices including: 1) periodic vendor due diligence meetings, review of methodologies, new developments and processes at vendors, 2) daily comparison of security valuation versus prior day for all securities that exceeded established thresholds, and 3) daily review of unpriced, stale, and variance reports with exceptions reviewed by senior management and the Committee.

3. Currency Translation

4. Taxes


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			21

Notes to Financial Statements

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current tax year and the prior tax year) and has concluded that no provision for income tax is required in the Fund’s financial statements.

5. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.

6. Class Allocations

7. Dividends and Distributions

8. Offering Expenses

Offering expenses of $58,119 were deferred and amortized on a straight line basis over a one year period starting from April 15, 2015 (commencement of operations).

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .85% of the Fund’s average daily net assets. The fee is accrued daily and paid monthly. The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Mutual Funds in which the Fund may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs) on an annual basis (the “Expense Caps”) to 1.30%, 2.05%, and 1.05% of daily average net assets for Class A, Class C, and Advisor Class shares, respectively. Any fees waived and expenses borne by the Adviser through June 30, 2015 are subject to repayment by the Fund until June 30, 2018; any fees waived and expenses borne by the Adviser


22		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Notes to Financial Statements

from July 1, 2015 through June 30, 2016 are subject to repayment by the Fund until June 30, 2019; such waivers that are subject to repayment amounted to $56,163 and $228,495, respectively. In any case, no repayment will be made that would cause the Fund’s total annual operating expenses to exceed the net fee percentages set forth above. The Expense Caps may not be terminated by the Adviser prior to one year from the date the Fund’s shares are first offered to the public. For the year ended June 30, 2016, such reimbursements/waivers amounted to $228,495.

Pursuant to the investment advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended June 30, 2016, the Adviser voluntarily agreed to waive such fees amounting to $66,763.

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has retained front-end sales charges of $-0- from the sale of Class A shares and received $-0- and $-0- in contingent deferred sales charges imposed upon redemptions by shareholders of Class A and Class C shares, respectively, for the year ended June 30, 2016.

The AB Fixed-Income Shares, Inc.—Government STIF Portfolio (the “Government STIF Portfolio”), prior to June 1, 2016, was offered as a cash management option to mutual funds and other institutional accounts of the Adviser, and was not available for direct purchase by members of the public. Prior to June 1, 2016, the Government STIF Portfolio paid no investment management fees but did bear its own expenses. As of June 1, 2016, the Government STIF Portfolio, which was renamed “AB Government Money Market Portfolio” (the “Government Money Market Portfolio”), will have a contractual investment management fee rate of .20% and will continue to bear its own expenses. In connection with the investment by the Fund in the Government Money Market Portfolio, the Adviser will waive its investment management fee from the Fund in an amount equal to Government Money Market Portfolio’s effective management fee. For the year ended June 30, 2016, such waiver amounted to $4.

A summary of the Fund’s transactions in shares of the Government Money Market Portfolio for the year ended June 30, 2016 is as follows:

Market Value

June 30, 2015

(000)

Purchases
at Cost
(000)

Sales
Proceeds
(000)

Market Value
June 30, 2016
(000)

Dividend
Income
(000)

429

485

– 0

–*

Amount is less than $500.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			23

Notes to Financial Statements

Brokerage commissions paid on investment transactions for the year ended June 30, 2016 amounted to $1,143, of which $0 and $0, respectively, was paid to Sanford C. Bernstein & Co. LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .25% of each Fund’s average daily net assets attributable to Class A shares and 1% of the Fund’s average daily net assets attributable to Class C shares. There are no distribution and servicing fees on the Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Since the commencement of the Fund’s operations, the Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amount of $-0- for Class C shares. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund’s shares.

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended June 30, 2016 were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	802,835		$	721,855
U.S. government securities		– 0	–		– 0	–

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation (excluding foreign currency transactions) are as follows:


Cost	$	1,937,540

Gross unrealized appreciation	$	58,042
Gross unrealized depreciation		(286,252	)

Net unrealized appreciation	$	(228,210	)


24		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Notes to Financial Statements

1. Derivative Financial Instruments

The Fund did not engage in derivatives transactions for the year ended June 30, 2016.

2. Currency Transactions

NOTE E

Capital Stock

Each class consists of 1,000,000,000 authorized shares. Transactions in capital shares for each class were as follows:

Shares

Amount

Year Ended
June 30,
2016

April 15, 2015^(a)
June 30,
2015

Year Ended

June 30,
2016

April 15, 2015^(a)
June 30,
2015

Class A

Shares sold

– 0

–

1,000

– 0

–

10,000

Net increase

– 0

–

1,000

– 0

–

10,000

Class C

Shares sold

– 0

–

1,000

– 0

–

10,000

Net increase

– 0

–

1,000

– 0

–

10,000

Advisor Class

Shares sold

– 0

–

198,000

– 0

–

1,980,000

Net increase

– 0

–

198,000

– 0

–

1,980,000

^(a)

Commencement of operations.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			25

Notes to Financial Statements

NOTE F

Risks Involved in Investing in the Fund

Foreign (Non-U.S.) Risk—Investment in securities of non-U.S. issuers may involve more risk than those of U.S. issuers. These securities may fluctuate more widely in price and may be less liquid due to adverse market, economic, political, regulatory or other factors. These risks may be heightened with respect to investments in emerging market countries, where there may be an increased amount of economic, political and social instability.

Emerging Market Risk—Investments in emerging market countries may have more risk because the markets are less developed and less liquid as well as being subject to increased economic, political, regulatory or other uncertainties.

Currency Risk—Fluctuations in currency exchange rates may negatively affect the value of the Fund’s investments or reduce its returns.

Focused Portfolio/Non-Diversification Risk—Investing in a limited number of companies, or investing more of the Fund’s assets in a smaller number of companies, may have more risk because changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value, or NAV.

Capitalization Risk—Investments in mid-capitalization companies may be more volatile than investments in large-capitalization companies. Investments in mid-capitalization companies may have additional risks because these companies have limited product lines, markets or financial resources.

NOTE G

Joint Credit Facility


26		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Notes to Financial Statements

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal year ended June 30, 2016 and the period ended June 30, 2015 was as follows:


	2016		2015
Distributions paid from:
Ordinary income	$	3,667	$	– 0	–

Total distributions paid		3,667	$	– 0	–

As of June 30, 2016, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Undistributed ordinary income	$	10,921
Accumulated capital and other losses		(84,433	)^(a)
Unrealized appreciation/(depreciation)		(228,419	)

Total accumulated earnings/(deficit)		(301,931	)

^(a)

As of June 30, 2016, the Fund had a net capital loss carryforward of $84,433.

During the current fiscal year, permanent differences primarily due to foreign currency reclassifications, the tax treatment of offering costs, and the redesignation of dividends resulted in a net increase in accumulated net investment income, a net decrease in accumulated net realized loss on investment and foreign currency transactions, and a net decrease in additional paid in capital. These reclassifications had no effect on net assets.

NOTE I

New Accounting Pronouncement

NOTE J

Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			27

Notes to Financial Statements

FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class A
	Year Ended June 30, 2016			April 15 2015^(a) to June 30, 2015


Net asset value, beginning of period		$ 9.77			$ 10.00

Income From Investment Operations
Net investment income^(b)(c)		.03			.03
Net realized and unrealized loss on investment transactions		(1.34	)		(.26	)

Net decrease in net asset value from operations		(1.31	)		(.23	)

Less: Dividends and Distributions
Dividends from net investment income		(.00	)^(d)		– 0	–
Distributions from net realized gain on investment transactions		(.00	)^(d)		– 0	–

Net asset value, end of period		$ 8.46			$ 9.77

Total Return
Total investment return based on net asset value^(e)		(13.39	)%		(2.30	)%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$9			$10
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.30	%		1.30	%^{^}
Expenses, before waivers/reimbursements		17.79	%		18.01	%^{^}
Net investment income^(c)		.34	%		1.58	%^{^}
Portfolio turnover rate		42	%		2	%

See footnote summary on page 30.


28		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Class C
	Year Ended June 30, 2016			April 15 2015^(a)to June 30, 2015


Net asset value, beginning of period		$ 9.75			$ 10.00

Income From Investment Operations
Net investment income (loss)^(b)(c)		(.04	)		.02
Net realized and unrealized loss on investment transactions		(1.32	)		(.27	)

Net decrease in net asset value from operations		(1.36	)		(.25	)

Less: Distributions
Distributions from net realized gain on investment transactions		(.00	)^(d)		– 0	–

Net asset value, end of period		$ 8.39			$ 9.75

Total Return
Total investment return based on net asset value^(e)		(13.93	)%		(2.50	)%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$8			$9
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		2.05	%		2.05	%^{^}
Expenses, before waivers/reimbursements		18.58	%		18.73	%^{^}
Net investment income (loss)^(c)		(.43	)%		.81	%^{^}
Portfolio turnover rate		42	%		2	%

See footnote summary on page 30.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			29

Financial Highlights

Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period


	Advisor Class
	Year Ended June 30, 2016			April 15 2015^(a) to June 30, 2015


Net asset value, beginning of period		$ 9.77			$ 10.00

Income From Investment Operations
Net investment income^(b)(c)		.05			.04
Net realized and unrealized loss on investment transactions		(1.33	)		(.27	)

Net decrease in net asset value from operations		(1.28	)		(.23	)

Less: Dividends and Distributions
Dividends from net investment income		(.02	)		– 0	–
Distributions from net realized gain on investment transactions		(.00	)^(d)		– 0	–

Total dividends and distributions		(.02	)		– 0	–

Net asset value, end of period		$ 8.47			$ 9.77

Total Return
Total investment return based on net asset value^(e)		(13.13	)%		(2.30	)%
Ratios/Supplemental Data
Net assets, end of period (000’s omitted)		$1,678			$1,935
Ratio to average net assets of:
Expenses, net of waivers/reimbursements		1.05	%		1.05	%^{^}
Expenses, before waivers/reimbursements		17.53	%		17.75	%^{^}
Net investment income^(c)		.58	%		1.81	%^{^}
Portfolio turnover rate		42	%		2	%

(a)

Commencement of operations.

(b)

Based on average shares outstanding.

(c)

Net of expenses waived and reimbursed by the Adviser.

(d)

Amount is less than $0.005.

(e)

Annualized.

See notes to financial statements.


30		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Financial Highlights

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors of AB Cap Fund, Inc. and

the Shareholders of AB Concentrated International Growth Fund

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of AB Concentrated International Growth Fund (the “Fund”), one of the funds constituting the AB Cap Fund, Inc., as of June 30, 2016, and the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for the year then ended and the period April 15, 2015 (commencement of operations) to June 30, 2015. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AB Concentrated International Growth Fund, one of the funds constituting the AB Cap Fund, Inc., at June 30, 2016, and the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the year then ended and the period April 15, 2015 (commencement of operations) to June 30, 2015, in conformity with U.S. generally accepted accounting principles.

LOGO

New York, New York

August 25, 2016


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			31

Report of Independent Registered Public Accounting Firm

2016 FEDERAL TAX INFORMATION

(Unaudited)

For Federal income tax purposes, the following information is furnished with respect to the earnings of the Fund for the taxable period ended June 30, 2016. For such taxable period, the Fund designates $29,388 as the maximum amount that may be considered qualified dividend income for individual shareholders.

The Fund intends to make an election to pass through foreign taxes to its shareholders. For the taxable year ended June 30, 2016, $2,564 of foreign taxes may be passed through and the associated foreign source income for information reporting purposes is $32,367.


32		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

BOARD OF DIRECTORS

Marshall C. Turner, Jr.⁽¹⁾, Chairman

John H. Dobkin⁽¹⁾

Michael J. Downey⁽¹⁾

William H. Foulk, Jr.⁽¹⁾

D. James Guzy⁽¹⁾

Nancy P. Jacklin⁽¹⁾

Robert M. Keith, President and Chief Executive Officer

Carol C. McMullen⁽¹⁾

Garry L. Moody⁽¹⁾

Earl D. Weiner⁽¹⁾



OFFICERS
Philip L. Kirstein, Senior Vice President and Independent Compliance Officer Mark Phelps⁽²⁾, Vice President Debasashi (Dev) Chakrabarti⁽²⁾, Vice President Emilie D. Wrapp, Secretary		Joseph J. Mantineo, Treasurer and Chief Financial Officer Phyllis J. Clarke, Controller Vincent S. Noto, Chief Compliance Officer


Custodian and Accounting Agent State Street Bank and Trust Company State Street Corporation CCB/5 1 Iron Street Boston, MA 02210		Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036
Principal Underwriter AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105		Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004
Transfer Agent AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-Free (800) 221-5672

(1)

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

(2)

The day-to-day management of, and investment decisions for, the Fund’s Portfolio are made by the Investment Policy Team. Messrs. Phelps and Chakrabarti are the persons with the most significant responsibility for day-to-day management of the Fund’s portfolio.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			33

Board of Directors

MANAGEMENT OF THE FUND


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INTERESTED DIRECTOR
Robert M. Keith, # 1345 Avenue of the Americas New York, NY 10105 56 (2015)	Senior Vice President of AllianceBernstein L.P. (the “Adviser”) and the head of AllianceBernstein Investments, Inc. (“ABI”) since July 2008; Director of ABI and President of the AB Mutual Funds. Previously, he served as Executive Managing Director of ABI from December 2006 to June 2008. Prior to joining ABI in 2006, Executive Managing Director of Bernstein Global Wealth 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.		108	None


34		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS
Marshall C. Turner, Jr., ## Chairman of the Board 74 (2015)	Private Investor since prior to 2011. Former Chairman and CEO of Dupont Photomasks, Inc. (components of semi-conductor manufacturing). He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture 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 Funds since February 2014.		108	Xilinx, Inc. (programmable logic semi-conductors) since 2007

John H. Dobkin, ## 74 (2015)	Independent Consultant since prior to 2011. Formerly, President of Save Venice, Inc. (preservation organization) from 2001-2002; Senior Advisor from June 1999-June 2000 and President of Historic Hudson Valley (historic preservation) from December 1989-May 1999. Previously, Director of the National Academy of 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 Funds from 2001-2008.		108	None


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			35

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Michael J. Downey, ## 72 (2015)	Private Investor since prior to 2011. Formerly, managing partner of Lexington Capital, LLC (investment advisory firm) from December 1997 until December 2003. He served as a Director 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.		108	Asia Pacific Fund, Inc. (registered investment company) since prior to 2011

William H. Foulk, Jr., ## 83 (2015)	Investment Adviser and an Independent Consultant since prior to 2011. Previously, he was Senior Manager of Barrett Associates, Inc., a registered investment adviser. He was formerly Deputy Comptroller and Chief Investment Officer of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. 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.		108	None


36		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
D. James Guzy, ## 80 (2015)	Chairman of the Board of SRC Computers, Inc. (semi-conductors), with which he has been associated since prior to 2011. He served as Chairman of the Board of PLX Technology (semi-conductors) since prior to 2010 until November 2013. 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.		108	None

Nancy P. Jacklin, ## 68 (2015)	Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford 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.		108	None


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			37

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Carol C. McMullen, ## 61 (2016)	Managing Director and Advisor, Leadership Development, Strategy, Corporate Social Responsibility of Slalom Consulting (consulting) since 2014; Director of Graebel Companies, Inc. (relocation services) and member of the Risk Management, Audit and Compliance Committees since 2014; Director and member of Finance/Investment and Audit Committees of Norfolk & Dedham Group (property and casualty insurance) since 2011. She is also lead investment director for business and family assets at Sydney Associates (real estate development) from prior to 2011 to present and serves on a number of non-profit boards. Formerly, Principal and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has served as a director or trustee of the AB Funds since June 2016.		108	None


38		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Garry L. Moody, ## 64 (2015)	Independent Consultant. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for the accounting, pricing, custody and reporting for the Fidelity mutual funds; and 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.		108	None


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			39

Management of the Fund


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER RELEVANT QUALIFICATIONS***	PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)
Earl D. Weiner, ## 76 (2015)	Of Counsel, and Partner prior to January 2007, of the law firm Sullivan & Cromwell LLP and is a former member of the ABA Federal Regulation of Securities Committee Task Force to draft editions of the Fund Director’s Guidebook. He also serves as a director or trustee of various non-profit organizations 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.		108	None

The address for each of the Fund’s disinterested 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 Fund’s Directors.

***

Mr. Keith is an “interested person” of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

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


40		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Management of the Fund

Officer Information

Certain information concerning the Fund’s Officers is listed below.


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST 5 YEARS
Robert M. Keith 56	President and Chief Executive Officer	See biography above.

Philip L. Kirstein 71	Senior Vice President and Independent Compliance Officer	Senior Vice President and Independent Compliance Officer of the AB Funds, with which he has been associated since October 2004. Prior thereto, he was Of Counsel to Kirkpatrick & Lockhart, LLP from October 2003 to October 2004, and General Counsel of Merrill Lynch Investment Managers, L.P. since prior to March 2003.

Mark Phelps 56	Vice President	Senior Vice President of the Adviser**, and Head of Concentrated Global Growth, with which he as been associated since December 2013, when the adviser acquired WPS Advisors, Inc. (“WPS”). Prior thereto, he was President and managing director of Global Investments at W.P. Stewart & Co. from September 2008 to June 2013. He also served as W.P. Stewart’s chief executive officer since prior to 2011.

Debasashi (Dev) Chakrabarti 39	Vice President	Senior Vice President of the Adviser and Portfolio Manager and Senior Research Analyst for Concentrated Global Growth. Prior to joining the Adviser in December 2013, he was a portfolio manager/analyst on the global equity research and portfolio-management team at WPS Advisors since prior to 2011.

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

Joseph J. Mantineo, 57	Treasurer and Chief Financial Officer	Senior Vice President of ABIS,** with which he has been associated since prior to 2011.

Vincent S. Noto 51	Chief Compliance Officer	Senior Vice President since 2015 and 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.

Phyllis J. Clarke, 55	Controller	Vice President of ABIS,** with which she 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 Fund’s Advisor, ABI and ABIS are affiliates of the fund.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			41

Management of the Fund

The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Directors and Officers and is available without charge upon request. Contact your financial representative at AB at 1-800-227-4618, or visit www.ABfunds.com for a free prospectus or SAI.


42		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Management of the Fund

Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested directors (the “directors”) of AB Cap Fund, Inc. (the “Company”) unanimously approved the continuance of the Company’s Advisory Agreement with the Adviser in respect of AB Concentrated International Growth Portfolio (the “Fund”) at a meeting held on May 3-5, 2016 (the “Meeting”).


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			43

judgment. The material factors and conclusions that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services Provided

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues, expenses and related notes indicating the profitability of the Fund to the Adviser for the period ended December 31, 2015 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Company’s Senior Officer. The directors noted the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and understood that there are a number of potentially acceptable allocation methodologies for information of this type. The directors noted that the profitability information reflected all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to its subsidiaries that provide transfer agency, distribution and brokerage services to the Fund. The directors recognized that it is difficult to make comparisons of the profitability of the Advisory Agreement with the profitability of advisory contracts for unaffiliated funds because comparative information is not generally publicly available and is affected by numerous factors. The directors focused on the profitability of the Adviser’s relationship with the Fund before taxes and distribution expenses. The directors noted that the Fund was not profitable to the Adviser in the period reviewed.


44		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their relationships with the Fund, including, but not limited to, benefits relating to soft dollar arrangements (whereby investment advisers receive brokerage and research services from brokers that execute agency transactions for their clients); 12b-1 fees and sales charges received by the Fund’s principal underwriter (which is a wholly owned subsidiary of the Adviser) in respect of certain classes of the Fund’s shares; brokerage commissions paid by the Fund to brokers affiliated with the Adviser; and transfer agency fees paid by the Fund to a wholly owned subsidiary of the Adviser. The directors recognized that the Fund’s unprofitability to the Adviser would be exacerbated without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

Advisory Fees and Other Expenses


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			45

institutional clients that are lower than those reviewed by the directors and that they had previously discussed with the Adviser its policies in respect of such arrangements.

The directors noted that the Fund may invest in shares of exchange-traded funds (“ETFs”), subject to the restrictions and limitations of the Investment Company Act of 1940 as these may be varied as a result of exemptive orders issued by the SEC. The directors also noted that ETFs pay advisory fees pursuant to their advisory contracts. The directors concluded, based on the Adviser’s explanation of how it may use ETFs when they are the most cost-effective way to obtain desired exposures or to “equitize” cash inflows pending purchases of underlying securities, that the advisory fee for the Fund would be paid for services that would be in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.

Economies of Scale


46		• AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO

methodology for setting breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many funds do not have breakpoints at all. The directors informed the Adviser that they would monitor the Fund’s assets (which were well below the level at which they would anticipate adding an initial breakpoint) and its profitability (currently unprofitable) to the Adviser and anticipated revisiting the question of breakpoints in the future if circumstances warranted doing so.


AB CONCENTRATED INTERNATIONAL GROWTH PORTFOLIO •			47

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT¹

The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and AB Cap Fund, Inc. (the “Fund”) in respect of AB Concentrated International Growth Fund (the “Portfolio”),² prepared by Philip L. Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by the August 2004 agreement between the Adviser and the New York State Attorney General (the “NYAG”). The Senior Officer’s evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors of the Fund to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the “40 Act”) and applicable state law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Portfolio which was provided to the Directors in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement.