AB Cap Fund, Inc. - AB FlexFee Portfolios

N-CSR 1 d843544dncsr.htm AB CAP FUND, INC. - AB FLEXFEE PORTFOLIOS AB Cap Fund, Inc. - AB FlexFee Portfolios

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: December 31, 2019

Date of reporting period: December 31, 2019

ITEM 1. REPORTS TO STOCKHOLDERS.

DEC^12.31.19

LOGO

ANNUAL REPORT

AB FLEXFEE^TM CORE OPPORTUNITIES PORTFOLIO

LOGO

Beginning January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling the Fund at (800) 221 5672.

You may elect to receive all future reports in paper form free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with the Fund, you can call the Fund at (800) 221 5672. Your election to receive reports in paper form will apply to all funds held in your account with your financial intermediary or, if you invest directly, to all AB Mutual Funds you hold.



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 as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-PORT 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.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB FlexFee Core Opportunities Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

⁺

Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

AB’s global research organization connects and collaborates across platforms and teams to deliver impactful insights and innovative products. Better insights lead to better opportunities—anywhere in the world.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 1

ANNUAL REPORT

February 12, 2020

This report provides management’s discussion of fund performance for AB FlexFee Core Opportunities Portfolio for the annual reporting period ended December 31, 2019.

The Fund’s investment objective is long-term growth of capital.

NAV RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	6 Months		12 Months

AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO

Advisor Class Shares		11.65%		28.83%

S&P 500 Index		10.92%		31.49%

Please keep in mind that high, double-digit returns are highly unusual and cannot be sustained. Investors should also be aware that these returns were primarily achieved during favorable market conditions.

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Standard and Poor’s (“S&P”) 500 Index, for the six- and 12-month periods ended December 31, 2019.

The Fund underperformed the benchmark for the 12-month period but outperformed for the six-month period. The Fund’s performance-based advisory fee was accrued at its minimum rate for the performance period from January 1, 2019 through December 31, 2019. During the 12-month period, an underweight to technology and an overweight to communication services detracted, relative to the benchmark, while an overweight to health care and an underweight to energy contributed. Stock selection within the health care and financials sectors detracted, while selection in industrials and consumer discretionary contributed.

For the six-month period, stock selection within industrials and energy contributed, while selection in technology and consumer staples detracted. An underweight to technology detracted, while an overweight to health care contributed.

The Fund did not utilize derivatives during either period.

MARKET REVIEW AND INVESTMENT STRATEGY

Global equities recorded strong double-digit returns during the 12-month period ended December 31, 2019. After declining sharply at the end of 2018, equity markets rebounded dramatically in January as strong corporate earnings and optimism about a trade truce between the US and China



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calmed investors. Trade-war tensions resurfaced, however, and emerging geopolitical pressures drove market volatility. Tariff wars, restrictive monetary policy and a decline in industrial production stoked recessionary fears throughout the global economy. In response, the world’s central banks implemented accommodative monetary policies to help support capital markets. Late in the third quarter, equity market performance was accompanied by a sharp style rotation in the US. Quality-growth and lower-volatility stocks, which had been strong performers, lagged, and value stocks outperformed. However, for the most part, growth stocks outperformed value over the entire period. From a market-capitalization perspective, large-cap stocks outperformed their small-cap peers. In December, equity markets rallied on news that the US and China had agreed to a preliminary phase-one trade deal due to be signed in January 2020.

The Fund’s Senior Investment Management Team looks for attractively valued companies with competitive advantages and strong fundamentals, including strong cash-flow generation, sustainable growth and healthy balance sheets. The Fund is conservatively positioned in an uncertain environment, with a bias towards companies demonstrating high profitability and dividend growth.

INVESTMENT POLICIES

The Fund invests primarily in the equity securities of US companies that the Adviser believes are attractively valued. The Adviser believes that, over time, a company’s stock price will come to reflect its intrinsic economic value. The Fund may invest in companies of any size and in any industry.

The Adviser depends heavily upon the fundamental analysis and research of its large internal research staff in making investment decisions for the Fund. The research staff follows a primary research universe of approximately 500, largely US, companies. In determining a company’s intrinsic economic value, the Adviser takes into account many factors that it believes bear on the company’s ability to perform in the future, including competitive advantages and fundamentals such as strong cash-flow generation, sustainable growth and healthy balance sheets.

At different times, and as a result of how individual companies are valued in the market, the Fund may be attracted to investments in companies with different market capitalizations (i.e., large-, mid- or small-capitalization) or companies engaged in particular types of business (e.g., banks and other financial institutions), although the Fund does not intend to concentrate in any particular industries or businesses. The Fund’s portfolio emphasis upon particular industries

(continued on next page)



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or sectors will be a by-product of the stock selection process rather than the result of assigned targets or ranges.

The Fund may enter into derivatives transactions, such as options, futures contracts, forwards, and swaps. The Fund may use options strategies involving the purchase and/or writing of various combinations of call and/or put options, including on individual securities and stock indices, futures contracts (including futures contracts on individual securities and stock indices) or shares of exchange-traded funds. These transactions may be used, for example, in an effort to earn extra income, to adjust exposure to individual securities or markets, or to protect all or a portion of the Fund’s portfolio from a decline in value, sometimes within certain ranges.



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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, 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 investments 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 value approach, may be underperforming the market generally.

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

Active Trading Risk: The Fund expects to engage in active and frequent trading of its portfolio securities and its portfolio turnover rate during some periods may exceed 100%. A higher rate of portfolio turnover increases transaction costs, which may negatively affect the Fund’s return. In addition, a high rate of portfolio turnover may result in substantial short-term gains, which may have adverse tax consequences for Fund shareholders.

Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Fund. Derivatives may also be subject to counterparty risk to a greater degree than more traditional investments.

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



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DISCLOSURES AND RISKS (continued)

more or less than their original cost. Performance shown in this report 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.

All fees and expenses related to the operation of the Fund have been deducted. Net asset value (“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. 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.



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HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

6/28/2017¹ TO 12/31/2019

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB FlexFee Core Opportunities Portfolio Advisor Class shares (from 6/28/2017¹ to 12/31/2019) as compared to the performance of the Fund’s benchmark.

1	Inception date: 6/28/2017.



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HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES¹

1 Year		28.83%		28.83%

Since Inception²		14.13%		14.13%

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2019 (unaudited)



	SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES

1 Year		28.83%

Since Inception²		14.13%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 23.00% for Advisor Class shares, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratio exclusive of the Fund’s advisory fees, 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 0.05% for Advisor Class shares. These waivers/reimbursements may not be terminated before April 30, 2020. Any fees waived and expenses borne by the Adviser through December 31, 2018 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 operating expenses to exceed these 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 ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

1	This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns.

2	Inception date: 6/28/2017.



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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 advisory 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 7/1/2019		Ending Account Value 12/31/2019		Expenses Paid During Period*		Annualized Expense Ratio*			Total Expenses Paid During Period+		Total Annualized Expense Ratio+
Advisor Class
Actual	$	1,000	$	1,116.50	$	0.48		0.09	%	$	0.53		0.10	%
Hypothetical**	$	1,000	$	1,024.75	$	0.46		0.09	%	$	0.51		0.10	%



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EXPENSE EXAMPLE (continued)

*	Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

In connection with the Fund’s investments in affiliated/unaffiliated underlying portfolios, the Fund incurs no direct expenses, but bears proportionate shares of the fees and expenses (i.e., operating, administrative and investment advisory fees) of the affiliated/unaffiliated underlying portfolios. The Adviser has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses of the affiliated underlying portfolios. The Fund’s total expenses are equal to the classes’ annualized expense ratio plus the Fund’s pro rata share of the weighted average expense ratio of the affiliated/unaffiliated underlying portfolios in which it invests, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



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PORTFOLIO SUMMARY

December 31, 2019 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $1.2

LOGO

TEN LARGEST HOLDINGS²



Company	U.S. $ Value		Percent of Net Assets

Microsoft Corp.	$	61,030		5.0	%

Alphabet, Inc. – Class C		49,469		4.1

UnitedHealth Group, Inc.		49,389		4.1

Verizon Communications, Inc.		48,874		4.0

Pfizer, Inc.		45,645		3.8

Facebook, Inc. – Class A		41,666		3.4

Walmart, Inc.		37,672		3.1

Comcast Corp. – Class A		36,696		3.0

Berkshire Hathaway, Inc. – Class B		35,787		3.0

Raytheon Co.		35,598		2.9

	$	441,826		36.4	%

1	All data are as of December 31, 2019. The Fund’s sector breakdown is expressed as a percentage of total investments and may vary over time.

2	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.



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PORTFOLIO OF INVESTMENTS

December 31, 2019


Company	Shares		U.S. $ Value

COMMON STOCKS – 93.7%
Health Care – 21.8%
Biotechnology – 6.9%
Alexion Pharmaceuticals, Inc.^(a)		175	$	18,926
Gilead Sciences, Inc.		145		9,422
Regeneron Pharmaceuticals, Inc.^(a)		57		21,403
Vertex Pharmaceuticals, Inc.^(a)		155		33,937

				83,688

Health Care Providers & Services – 7.8%
Anthem, Inc.		56		16,914
Cigna Corp.^(a)		42		8,588
Quest Diagnostics, Inc.		187		19,970
UnitedHealth Group, Inc.		168		49,389

				94,861

Life Sciences Tools & Services – 1.1%
Illumina, Inc.^(a)		41		13,601


Pharmaceuticals – 6.0%
Pfizer, Inc.		1,165		45,645
Roche Holding AG (Sponsored ADR)		660		26,835

				72,480

				264,630

Communication Services – 17.2%
Diversified Telecommunication Services – 7.0%
Comcast Corp. – Class A		816		36,696
Verizon Communications, Inc.		796		48,874

				85,570

Entertainment – 1.3%
Electronic Arts, Inc.^(a)		145		15,589


Interactive Media & Services – 7.5%
Alphabet, Inc. – Class C^(a)		37		49,469
Facebook, Inc. – Class A^(a)		203		41,666

				91,135

Media – 1.4%
Discovery, Inc. – Class A^(a)		500		16,370

				208,664

Information Technology – 14.6%
Communications Equipment – 0.9%
F5 Networks, Inc.^(a)		80		11,172


Electronic Equipment, Instruments & Components – 1.5%
Dolby Laboratories, Inc. – Class A		257		17,682


IT Services – 6.7%
Akamai Technologies, Inc.^(a)		162		13,993
Cognizant Technology Solutions Corp. – Class A		237		14,699



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Euronet Worldwide, Inc.^(a)		55	$	8,666
Leidos Holdings, Inc.		141		13,802
MAXIMUS, Inc.		158		11,754
Visa, Inc. – Class A		100		18,790

				81,704

Software – 5.5%
Microsoft Corp.		387		61,030
Slack Technologies, Inc. – Class A^(a)		237		5,328

				66,358

				176,916

Financials – 12.4%
Banks – 4.4%
JPMorgan Chase & Co.		217		30,250
Wells Fargo & Co.		437		23,510

				53,760

Consumer Finance – 0.6%
Capital One Financial Corp.		70		7,204


Diversified Financial Services – 2.9%
Berkshire Hathaway, Inc. – Class B^(a)		158		35,787


Insurance – 4.5%
Allstate Corp. (The)		166		18,667
Fidelity National Financial, Inc.		406		18,412
Reinsurance Group of America, Inc. – Class A		104		16,958

				54,037

				150,788

Industrials – 8.7%
Aerospace & Defense – 3.5%
Hexcel Corp.		98		7,184
Raytheon Co.		162		35,598

				42,782

Airlines – 1.9%
Alaska Air Group, Inc.		220		14,905
Southwest Airlines Co.		145		7,827

				22,732

Building Products – 0.8%
Allegion PLC		80		9,963


Machinery – 1.7%
Altra Industrial Motion Corp.		275		9,958
Crane Co.		118		10,193

				20,151

Road & Rail – 0.8%
Kansas City Southern		63		9,649

				105,277



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Consumer Discretionary – 6.9%
Auto Components – 0.8%
Gentex Corp.		334	$	9,679


Distributors – 0.6%
LKQ Corp.^(a)		204		7,283


Household Durables – 1.9%
DR Horton, Inc.		257		13,557
Garmin Ltd.		99		9,658

				23,215

Specialty Retail – 3.6%
Advance Auto Parts, Inc.		97		15,536
Five Below, Inc.^(a)		71		9,078
Home Depot, Inc. (The)		45		9,827
Murphy USA, Inc.^(a)		82		9,594

				44,035

				84,212

Consumer Staples – 4.9%
Beverages – 1.2%
Monster Beverage Corp.^(a)		241		15,316


Food & Staples Retailing – 3.1%
Walmart, Inc.		317		37,672


Tobacco – 0.6%
Philip Morris International, Inc.		84		7,148

				60,136

Real Estate – 4.0%
Equity Real Estate Investment Trusts (REITs) – 1.5%
Regency Centers Corp.		285		17,981


Real Estate Management & Development – 2.5%
CBRE Group, Inc. – Class A^(a)		510		31,258

				49,239

Energy – 3.2%
Oil, Gas & Consumable Fuels – 3.2%
ConocoPhillips		178		11,575
Phillips 66		244		27,184

				38,759

Total Common Stocks (cost $924,538)				1,138,621



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

SHORT-TERM INVESTMENTS – 11.2%
Investment Companies – 11.2%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(b)(c)(d) (cost $135,362)		135,362	$	135,362


Total Investments – 104.9% (cost $1,059,900)				1,273,983
Other assets less liabilities – (4.9)%				(59,031	)


Net Assets – 100.0%			$	1,214,952

(a)	Non-income producing security.

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

(c)	The rate shown represents the 7-day yield as of period end.

(d)	Affiliated investments.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.



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STATEMENT OF ASSETS & LIABILITIES

December 31, 2019


Assets
Investments in securities, at value Unaffiliated issuers (cost $924,538)	$	1,138,621
Affiliated issuers (cost $135,362)		135,362
Cash		56
Receivable from Adviser		70,195
Unaffiliated dividends receivable		453
Affiliated dividends receivable		182

Total assets		1,344,869

Liabilities
Audit and tax fee payable		50,839
Dividends payable		48,840
Custody fee payable		9,472
Legal fee payable		7,011
Transfer Agent fee payable		208
Accrued expenses and other liabilities		13,547

Total liabilities		129,917

Net Assets	$	1,214,952

Composition of Net Assets
Capital stock, at par	$	10
Additional paid-in capital		997,696
Distributable earnings		217,246

	$	1,214,952

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

Advisor	$	1,214,952		100,001	$	12.15

See notes to financial statements.



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STATEMENT OF OPERATIONS

Year Ended December 31, 2019


Investment Income
Dividends Unaffiliated issuers (net of foreign taxes withheld of $64)	$	14,278
Affiliated issuers		2,438		$	16,716

Expenses
Advisory fee (see Note B)		565
Transfer agency-Advisor Class		2,682
Administrative		96,386
Audit and tax		54,090
Legal		31,541
Custodian		24,853
Directors’ fees		23,015
Printing		8,936
Miscellaneous		37,185

Total expenses		279,253
Less: expenses waived and reimbursed by the Adviser (see Note B and Note D)		(278,230	)

Net expenses					1,023

Net investment income					15,693

Realized and Unrealized Gain on Investments
Net realized gain on investment transactions					51,176
Net change in unrealized appreciation/depreciation on investments					216,164

Net gain on investments					267,340

Net Increase in Net Assets from Operations				$	283,033

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31, 2019			Year Ended December 31, 2018
Increase (Decrease) in Net Assets from Operations
Net investment income	$	15,693		$	2,679
Net realized gain on investment transactions		51,176			62,463
Net change in unrealized appreciation/depreciation on investments		216,164			(99,934	)

Net increase (decrease) in net assets from operations		283,033			(34,792	)
Distributions to Shareholders
Advisor Class		(48,840	)		(89,891	)
Capital Stock Transactions
Net increase		– 0	–		5

Total increase (decrease)		234,193			(124,678	)
Net Assets
Beginning of period		980,759			1,105,437

End of period	$	1,214,952		$	980,759

See notes to financial statements.



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NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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 comprised of 28 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB FlexFee Core Opportunities Portfolio (the “Fund”), a diversified portfolio. The Fund commenced operations on June 28, 2017. The Fund has authorized issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares. Class A, Class B, Class C, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares have not been issued. As of December 31, 2019, AllianceBernstein L.P. (the “Adviser”) was the sole shareholder of Advisor Class shares. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven 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 reference to the principal exchange on



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NOTES TO FINANCIAL STATEMENTS (continued)

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 as deemed appropriate by the Adviser. 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 generally values many of its foreign



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NOTES TO FINANCIAL STATEMENTS (continued)

equity securities using fair value prices based on third party vendor modeling tools to the extent available.

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.



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NOTES TO FINANCIAL STATEMENTS (continued)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2019:

Investments in Securities

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks^

1,138,621

– 0

–

– 0

–

1,138,621

Short-Term Investments:

Investment Companies

135,362

– 0

–

– 0

–

135,362

Total Investments in Securities

1,273,983

– 0

–

– 0

–

1,273,983

Other Financial Instruments*

– 0

–

– 0

–

– 0

–

– 0

–

Total

1,273,983

– 0

–

– 0

–

1,273,983

^	See Portfolio of Investments for sector classifications.

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/(depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, options written and swaptions written which are valued at market value.

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 the 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, 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.



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NOTES TO FINANCIAL STATEMENTS (continued)

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 and the prior two 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. 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. Expense Allocations

Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods.

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.

8. Offering Expenses

Offering expenses of $68,085 were deferred and amortized on a straight line basis over a one year period starting from June 28, 2017 (commencement of operations).

NOTE B

Advisory Fee and Other Transactions with Affiliates



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NOTES TO FINANCIAL STATEMENTS (continued)

Fund’s average daily net assets for each .01% of absolute performance by which the performance of the Measuring Class exceeds or lags the Index Hurdle for the period from the beginning of the Performance Period through the current business day. The maximum Performance Adjustment (positive or negative) will not exceed an annualized rate of +/- .50% (“Maximum Performance Adjustment”) of the Fund’s average daily net assets, which would occur when the performance of the Measuring Class exceeds, or is exceeded by, the Index Hurdle by 1.40% or more for the Performance Period. On a monthly basis, the Fund will pay the Adviser the minimum fee rate of .05% on an annualized basis (Base Fee minus the Maximum Performance Adjustment) applied to the average daily net assets for the month. At the end of the Performance Period, the Fund will pay to the Adviser the total advisory fee, less the amount of any minimum fees paid during the Performance Period and any waivers described below. The period over which performance is measured (“Performance Period”) was initially from the commencement of operations to December 31, 2018 and thereafter is each 12-month period beginning on the first day in the month of January through December 31 of the same year. In addition, the Adviser has agreed to waive its advisory fee by limiting the Fund’s accrual of the advisory fee (Base Fee plus Performance Adjustment) on any day to the amount corresponding to the maximum fee rate multiplied by the Fund’s current net assets if such amount is less than the amount that would have been accrued based on the Fund’s average daily net assets for the Performance Period. For the year ended December 31, 2019, the Fund accrued advisory fees of $565, as reflected in the statement of operations, at an annual effective rate (excluding the impact from any expense waivers in effect) of .05% of the Fund’s average net assets, which reflected a (.50)% Performance Adjustment of $(5,646).

The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total expenses (other than the advisory fee, 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 from exceeding .05% of average daily net assets (the “Expense Cap”). For the year ended December 31, 2019, such reimbursements/ waivers amounted to $181,729. The Expense Cap will remain in effect until April 30, 2020 and then may be continued thereafter from year to year by the Adviser. Any fees waived and expenses borne by the Adviser through December 31, 2018 are subject to repayment 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; such waivers that are subject to repayment amount to $171,134 for the period ended December 31, 2017, and $205,969 for the year ended December 31, 2018. In any case, no repayment will be made that would cause the Fund’s total annual expenses (subject to the exclusions set forth above) to exceed .05% of average daily net assets.



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NOTES TO FINANCIAL STATEMENTS (continued)

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 December 31, 2019, the Adviser voluntarily agreed to waive such fees in the amount of $96,386.

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. The compensation retained by ABIS amounted to $1,135 for the year ended December 31, 2019.

The Fund may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2020. In connection with the investment by the Fund in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Fund in an amount equal to the Fund’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. For the year ended December 31, 2019, such waiver amounted to $115.

A summary of the Fund’s transactions in AB mutual funds for the year ended December 31, 2019 is as follows:


Fund	Market Value 12/31/18 (000)			Purchases at Cost (000)		Sales Proceeds (000)		Market Value 12/31/19 (000)			Dividend Income (000)
Government Money Market Portfolio	$	79		$	386	$	330	$	135		$	2
Government Money Market Portfolio* .		– 0	–		24		24		– 0	–	$	0	**

								$	135		$	2

*	Investment of cash collateral for securities lending transactions (see Note D).

**	Amount is less than $500.



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NOTES TO FINANCIAL STATEMENTS (continued)

holding company for a diverse group of financial services companies, including an approximately 65.3% economic interest in the Adviser and a 100% interest in AllianceBernstein Corporation, the general partner of the Adviser. Since the initial sale, AXA has completed additional offerings, most recently during the fourth quarter of 2019. As a result, AXA currently owns 10.1% of the outstanding shares of common stock of Equitable, and no longer owns a controlling interest in Equitable. AXA previously announced its intention to sell its entire interest in Equitable over time, subject to market conditions and other factors (the “Plan”). Most of AXA’s remaining Equitable shares are to be delivered on redemption of AXA bonds mandatorily exchangeable into Equitable shares and maturing in May 2021. AXA retains sole discretion to determine the timing of any future sales of its remaining shares of Equitable common stock.

The latest transaction under the Plan, which occurred on November 13, 2019, resulted in the indirect transfer of a “controlling block” of voting securities of the Adviser (a “Change of Control Event”) and was deemed an “assignment” causing a termination of the Fund’s investment advisory agreement. In order to ensure that investment advisory services could continue uninterrupted in the event of a Change of Control Event, the Board previously approved a new investment advisory agreement with the Adviser, and shareholders of the Fund subsequently approved the new investment advisory agreement. This agreement became effective on November 13, 2019.

NOTE C

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended December 31, 2019, were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	809,303		$	860,167
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	$	1,066,940

Gross unrealized appreciation	$	215,507
Gross unrealized depreciation		(8,464	)

Net unrealized appreciation	$	207,043

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.



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NOTES TO FINANCIAL STATEMENTS (continued)

The Fund did not engage in derivative transactions for the year ended December 31, 2019.

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 D

Securities Lending



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NOTES TO FINANCIAL STATEMENTS (continued)

received on securities loaned is recorded as an asset as well as a corresponding liability in the statement of assets and liabilities. The collateral will be adjusted the next business day to maintain the required collateral amount. The amounts of securities lending income from the borrowers and Government Money Market Portfolio are reflected in the statement of operations. When the Fund earns net securities lending income from Government Money Market Portfolio, the income is inclusive of a rebate expense paid to the borrower. In connection with the cash collateral investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive a portion of the Fund’s share of the advisory fees of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. A principal risk of lending portfolio securities is that the borrower may fail to return the loaned securities upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for the year ended December 31, 2019 is as follows:

Market Value
of Securities
on Loan*

Cash
Collateral*

Market Value
of Non-Cash
Collateral*

Income from
Borrowers

Government Money
Market Portfolio

Income
Earned

Advisory Fee
Waived

$ – 0

–

– 0

–

– 0

–

*	As of December 31, 2019.

**	Amount is less than $0.5.

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
December 31,
2019

Year Ended
December 31,
2018

Year Ended
December 31,
2019

Year Ended
December 31,
2018

Advisor Class

Shares sold

– 0

–

– 0

–

Shares issued in reinvestment of dividends and distributions

– 0

–

^(a)

– 0

–

^(b)

Net increase

– 0

–

– 0

–

(a)	less than 0.5 shares.

(b)	less than $0.5.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE F

Risks Involved in Investing in the Fund

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

Active Trading Risk—The Fund expects to engage in active and frequent trading of its portfolio securities and its portfolio turnover rate during some periods may exceed 100%. A higher rate of portfolio turnover increases transaction costs, which may negatively affect the Fund’s return. In addition, a high rate of portfolio turnover may result in substantial short-term gains, which may have adverse tax consequences for Fund shareholders.

Derivatives Risk—The Fund may enter into derivative transactions such as forwards, options, futures and swaps. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Fund, and subject to counterparty risk to a greater degree than more traditional investments. Derivatives may result in significant losses, including losses that are far greater than the value of the derivatives reflected on the statement of assets and liabilities.

LIBOR Risk—The Fund may invest in certain debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. In July 2017, the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. Although financial regulators and industry working groups have suggested alternative reference rates, such as European Interbank Offer Rate (“EURIBOR”), Sterling Overnight Interbank Average Rate (“SONIA”) and Secured Overnight Financing Rate (“SOFR”), global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Fund’s performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing



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NOTES TO FINANCIAL STATEMENTS (continued)

and diminished effectiveness of hedging strategies, adversely affecting the Fund’s performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.

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. Therefore, the Fund has not accrued any liability in connection with these indemnification provisions.

NOTE G

Joint Credit Facility

A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $325 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 December 31, 2019.

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended December 31, 2019 and December 31, 2018 were as follows:


	2019		2018
Distributions paid from:
Ordinary income	$	30,950	$	69,729
Net long-term capital gains		17,890		20,162

Total taxable distributions paid	$	48,840	$	89,891

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Undistributed ordinary income	$	8,449
Undistributed capital gains		1,754
Unrealized appreciation/(depreciation)		207,043	^(a)

Total accumulated earnings/(deficit)	$	217,246

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



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NOTES TO FINANCIAL STATEMENTS (continued)

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2019, the Fund did not have any capital loss carryforwards.

During the current fiscal year, there were no permanent differences that resulted in adjustments to distributable earnings or additional paid-in capital.

NOTE I

Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies and adds disclosures to Topic 820. The amendments in this ASU 2018-13 (“ASU”) apply to all entities that are required, under existing U.S. GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management has evaluated the impact of the amendments and elected to early adopt the ASU. The adoption of this ASU did not have a material impact on the disclosure and presentation of the financial statements of the Fund.

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.



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FINANCIAL HIGHLIGHTS

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


	Advisor Class
	Year Ended December 31,						June 28, 2017^(a) to December 31, 2017
	2019			2018			June 28, 2017^(a) to December 31, 2017


Net asset value, beginning of period		$ 9.81			$ 11.05			$ 10.00

Income From Investment Operations

Net investment income^(b)(c)		.16			.03			.04

Net realized and unrealized gain (loss) on investments		2.67			(.37	)		1.12

Net increase (decrease) in net asset value from operations		2.83			(.34	)		1.16

Less: Dividends and Distributions

Dividends from net investment income		(.16	)		(.05	)		(.03	)

Distributions from net realized gain on investments		(.33	)		(.85	)		(.08	)

Total dividends and distributions		(.49	)		(.90	)		(.11	)

Net asset value, end of period		$ 12.15			$ 9.81			$ 11.05


Total Return

Total investment return based on net asset value^(d)		28.83	%		(3.09	) %		11.60	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$1,215			$981			$1,105

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(e)^†		.09	%		1.16	%^(g)		.41	%^(f)

Expenses, before waivers/reimbursements^(e)^†		24.73	%		26.11	%^(g)		38.86	%^(f)

Net investment income^(c)		1.39	%		.23	%		.68	%^(f)

Portfolio turnover rate		79	%		144	%		53	%

^† Expense ratios exclude the estimated acquired fund fees of affiliated/unaffiliated underlying
portfolios		.01	%		.02	%		.03	%^(f)

(a)	Commencement of operations.

(b)	Based on average shares outstanding.

(c)	Net of 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.Total investment 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 for a period of less than one year is not annualized.

(e)

In connection with the Fund’s investments in affiliated underlying portfolios, the Fund incurs no direct expenses but bears proportionate shares of the acquired fund fees and expenses (i.e. operating, administrative and investment advisory fees) of the affiliated underlying portfolios. The Adviser has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses, and the years ended December 31, 2019, December 31, 2018, and the period ended December 31, 2017, such waiver amounted to 0.01 %, 0.02% and 0.03% (annualized), respectively.

(f)	Annualized.

(g)	The advisory fee reflected in the Fund’s expense ratio may be higher or lower than the Base Fee plus Performance Adjustment due to the different time periods over which the fee is calculated (i.e., the financial reporting period vs. the Performance Period).

See notes to financial statements.



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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

AB FlexFee Core Opportunities Portfolio:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB FlexFee Core Opportunities Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of December 31, 2019, 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, the financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting AB Cap Fund, Inc.) at December 31, 2019, 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 its financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 33

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

February 26, 2020



34 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

2019 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund for the calendar year ended December 31, 2019. For corporate shareholders 33.03% of dividends paid qualify for the dividends received deduction.

For individual shareholders, the Fund designates 34.23% of dividends paid as qualified dividend income.



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BOARD OF DIRECTORS

Marshall C. Turner, Jr⁽¹⁾, Chairman

Jorge A. Bermudez*

Michael J. Downey⁽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

Frank V. Caruso⁽²⁾, Vice President

John H. Fogarty⁽²⁾, Vice President

Vinay Thapar⁽²⁾, Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Vincent S. Noto, Chief Compliance Officer

Custodian and Accounting Agent

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

Transfer Agent

AllianceBernstein Investor Services, Inc.

P.O. Box 786003

San Antonio, TX 78278-6003

Toll-Free (800) 221-6003

Independent Registered Public Accounting Firm

Ernst & Young LLP

5 Times Square

New York, NY 10036

Legal Counsel

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

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

2	The management of, and investment decisions for, the Fund’s portfolio are made by the Adviser’s Relative Value Investment Team. Messrs. Caruso, Fogarty and Thapar are the professionals primarily responsible for the day-to-day management of the Fund’s portfolio.

*	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee when he joins the Board on January 1, 2020.



36 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB 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 59 (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.		91	None



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 37

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2015)	Private Investor since prior to 2015. 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 all AB funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		91	Xilinx, Inc. (programmable logic semi-conductors) since 2007



38 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Jorge A. Bermudez,^ 68 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since 2020.		91	Moody’s Corporation since April 2011


Michael J. Downey,^## 76 (2015)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. 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.		91	None



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 39

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Nancy P. Jacklin,^## 71 (2015)	Private Investor since prior to 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 Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		91	None



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MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		91	None



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 41

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Garry L. Moody,^## 67 (2015)	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 is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council Governing Council. He has served as a director or trustee and as Chairman of the Audit Committees of the AB Funds since 2008.		91	None



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MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Earl D. Weiner,^## 80 (2015)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He 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.		91	None

*	The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department—Mutual Fund Legal, 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.

^	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and Independent Directors Committee when he joins the Board on January 1, 2020.



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 43

MANAGEMENT OF THE FUND (continued)

Officer Information


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST 5 YEARS
Robert M. Keith 59	President and Chief Executive Officer	See biography above.

Frank V. Caruso 63	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Chief Investment Officer of US Growth Equities.

John H. Fogarty 50	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015.

Vinay Thapar 41	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 60	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of ABIS**, with which she has been associated since prior to 2015.

Vince S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	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 (800) 227-4618, or visit www.abfunds.com, for a free prospectus or SAI.



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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 FlexFee^TM Core Opportunities Portfolio (the “Fund”) at a meeting held on May 7-9, 2019 (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 additional materials, including comparative analytical data prepared by the Senior Analyst for the Fund. The directors also discussed the proposed continuance in private sessions with counsel.

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 review extensive materials and information from the Adviser, including information on the investment performance of the Fund.

The directors also considered all factors they believed relevant, including the specific matters discussed below. During the course of their deliberations, the directors evaluated, among other things, the reasonableness of the performance-based advisory fee (which consists of a base fee plus or minus a performance adjustment) and considered materials presented to them concerning the SEC’s published guidance on factors that should be considered in connection with fulcrum fee arrangements, including the following factors: (1) the fairness of the fulcrum fee; (2) selection of an appropriate index against which fund performance should be measured; (3) variations in periods used for computing average asset values and performance; (4) length of period over which performance is computed; (5) computation of performance over a rolling period; (6) performance for transitional periods; (7) computation of the performance of the fund and the index with respect to payment of dividends and capital gains distributions; and (8) avoidance of basing significant fee adjustments upon random or insignificant differences. The directors did not identify any particular information that was all-important or controlling, and different



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 45

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 performance-based 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 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. The directors noted that the Adviser from time to time reviews the Fund’s investment strategies and from time to time proposes changes intended to improve the Fund’s relative or absolute performance for the directors’ consideration. 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. The Adviser did not request any reimbursements from the Fund in the Fund’s latest fiscal year. 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 and expenses and related notes indicating the profitability of the Fund to the Adviser for the period ended December 31, 2017 and calendar year 2018 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Fund’s former Senior Officer/Independent Compliance 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



46 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

profitability of fund 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 periods reviewed. The directors noted that, due to the performance fee component of the advisory fee, profitability would tend to be higher with better performance relative to the Fund’s benchmark index, which they considered to create an appropriate alignment of incentives.

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their proposed relationships with the Fund and the underlying fund advised by the Adviser in which the Fund invests, including, but not limited to, benefits relating to 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

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 performance information prepared by an independent service provider (the “15(c) service provider”), showing the performance of the Advisor Class shares of the Fund against a group of similar funds (“peer group”) and a larger group of similar funds (“peer universe”), each selected by the 15(c) service provider, and information prepared by the Adviser showing performance of the Advisor Class shares against a broad-based securities market index, in each case for the 1-year period ended February 28, 2019 and (in the case of comparisons with the broad-based securities market index) for the period from 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 payable by the Fund to the Adviser and information prepared by the 15(c) service provider concerning advisory fee rates payable by other funds in the same category as the Fund. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 47

in the fees payable by other funds. The directors compared the Fund’s contractual effective advisory fee rate with a peer group median.

The directors also considered the Adviser’s fee schedule for other clients pursuing an investment strategy similar to the Fund’s. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule, 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 directors previously discussed these matters with an independent fee consultant. The directors also compared the advisory fee rate for the Fund with that for another fund advised by the Adviser with a similar investment strategy.

The Adviser reviewed with the directors the significantly greater scope of the services it provides to the Fund relative to institutional clients. In this regard, the Adviser noted, among other things, that, compared to institutional accounts, the Fund (i) demands considerably more portfolio management, research and trading resources due to significantly higher daily cash flows; (ii) has more tax and regulatory restrictions and compliance obligations; (iii) must prepare and file or distribute regulatory and other communications about fund operations; and (iv) must provide shareholder servicing to retail investors. The Adviser also reviewed the greater legal risks presented by the large and changing population of Fund shareholders who may assert claims against the Adviser in individual or class actions, and the greater entrepreneurial risk in offering new fund products, which require substantial investment to launch, may not succeed, and generally must be priced to compete with larger, more established funds resulting in lack of profitability to the Adviser until a new fund achieves scale. In light of the substantial differences in services rendered by the Adviser to institutional clients as compared to the Fund, and the different risk profile, 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 uses ETFs when they are the most cost-effective way to obtain desired exposures, in some cases pending purchases of underlying securities, that the advisory fee for the Fund would be for services in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.



48 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

In connection with their review of the Fund’s advisory fee, the directors also considered the total expense ratio of the Advisor Class shares of the Fund in comparison to a peer group and a peer universe selected by each 15(c) service provider. The Advisor Class expense ratio of the Fund was based on the Fund’s latest fiscal year and the directors considered the Adviser’s expense cap for the Fund. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view the 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. The directors noted that the Fund’s expense ratio was above the medians. After reviewing and discussing the Adviser’s explanations of the reasons for this, the directors concluded that the Fund’s expense ratio was acceptable.

Economies of Scale

The directors noted that the advisory fee schedule for the Fund does not contain breakpoints and that they had previously 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 presentations from time to time by the Adviser concerning certain of its views on economies of scale. The directors also previously discussed economies of scale with an independent fee consultant. 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 asset levels (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.



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This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

INTERNATIONAL/ GLOBAL EQUITY (continued)

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio¹

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

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

Multi-Manager Select 2060 Fund

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

We also offer Government Money Market Portfolio, which serves as the money market fund exchange vehicle for the AB mutual funds. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

1	Prior to July 12, 2019, Total Return Bond Portfolio was named Intermediate Bond Portfolio; prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



50 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

NOTES



abfunds.com		AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO ^\| 51

NOTES



52 ^\| AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO		abfunds.com

LOGO

AB FLEXFEE CORE OPPORTUNITIES PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

FFCO-0151-1219 LOGO

DEC^12.31.19

LOGO

ANNUAL REPORT

AB FLEXFEE^TM EMERGING MARKETS GROWTH PORTFOLIO

LOGO



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.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB FlexFee Emerging Markets Growth Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

⁺

Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 1

ANNUAL REPORT

February 10, 2020

This report provides management’s discussion of fund performance for AB FlexFee Emerging Markets Growth Portfolio for the annual reporting period ended December 31, 2019.

The Fund’s investment objective is to seek long-term growth of capital.

NAV RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	6 Months		12 Months

AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO¹

Advisor Class Shares		6.66%		25.89%

MSCI EM Index (net)		7.09%		18.42%

The returns shown are based on net asset values calculated for shareholder transactions and may differ from the returns shown in the Financial Highlights, which reflect adjustments made to the net asset values in accordance with accounting principles generally accepted in the United States of America.

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Morgan Stanley Capital International Emerging Markets (“MSCI EM”) Index (net), for the six- and 12-month periods ended December 31, 2019.

The Fund outperformed its benchmark for the 12-month period but underperformed for the six-month period. The Fund’s performance-based advisory fee was accrued at its maximum rate for the performance period for January 1, 2019 through December 31, 2019. During the 12-month period, stock selection within the consumer staples and consumer discretionary sectors contributed, relative to the benchmark, while selection in technology and health care detracted. An overweight to consumer discretionary and an underweight to materials contributed, while overweights to consumer staples and industrials detracted. In terms of country positioning, an overweight to Russia contributed, while an underweight to Taiwan detracted (country selection is a result of bottom-up security analysis combined with fundamental research).

For the six-month period, stock selection within industrials and technology detracted, while selection in utilities and consumer staples contributed. Overweights to financials and consumer staples detracted, while an underweight to materials and an overweight to consumer discretionary contributed. An overweight to Taiwan detracted, while an overweight to South Africa contributed.

The Fund utilized futures for hedging purposes, which detracted from absolute performance for both periods.



2 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

MARKET REVIEW AND INVESTMENT STRATEGY

Emerging markets recorded strong double-digit returns during the 12-month period ended December 31, 2019. After declining sharply at the end of 2018, equity markets rebounded dramatically in January as strong corporate earnings and optimism about a trade truce between the US and China calmed investors. Trade-war tensions resurfaced, however, and emerging geopolitical pressures drove market volatility. Tariff wars, restrictive monetary policy and a decline in industrial production stoked recessionary fears throughout the global economy. In response, the world’s central banks implemented accommodative monetary policies to help support capital markets. Late in the third quarter, equity market performance was accompanied by a sharp style rotation in the US. Quality-growth and lower-volatility stocks, which had been strong performers, lagged, and value stocks outperformed. However, for the most part, growth stocks continued to outperform value over the entire period. From a market-capitalization perspective, large-cap stocks outperformed their small-cap peers. In December, equity markets rallied on news that the US and China had agreed to a preliminary phase-one trade deal due to be signed in January 2020.

The Fund’s Senior Investment Management Team (the “Team”) continues to focus on long-term fundamentals and to allocate capital where the Team has the most conviction. The Team remains confident in the Fund’s positioning, with exposure to companies with significant structural growth and attractive valuations while having low exposure to areas impacted by the trade war.

INVESTMENT POLICIES

At least 80% of the Fund’s net assets will under normal circumstances be invested in securities of emerging-market companies and related derivatives. An emerging-market country is a country whose per capita gross national income is not classified as “High Income” by the World Bank, that is not a member of the Organization for Economic Co-Operation and Development, or that is represented in a MSCI emerging-market equity index. Examples of emerging-market countries include Argentina, Brazil, Chile, Croatia, Egypt, Hong Kong, India, Indonesia, Kazakhstan, Malaysia, Mexico, the People’s Republic of China, Peru, the Philippines, Poland, Russia, South Africa, Taiwan, Thailand, Turkey and Venezuela. Emerging-market countries may include countries referred to as “frontier” markets, such as Egypt, Nigeria and Vietnam.

In managing the Fund, the Adviser will employ a “bottom up” investment process that focuses on a company’s prospective earnings growth, valuation and business quality. The Adviser will typically look

(continued on next page)



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 3

for companies that have strong, experienced management teams and the potential to support greater than expected earnings growth rates, and will combine fundamental and quantitative analyses in its stock selection process. The Adviser will not target any particular country, sector or market capitalization weightings for the Fund.

Fluctuations in currency exchange rates can have a dramatic impact on the returns of equity securities. While the Adviser may hedge the foreign currency exposure resulting from the Fund’s security positions through the use of currency-related derivatives, it is not required to do so. The Fund may also take long and short positions in currencies (or related derivatives) independent of any such security positions, including taking a position in a currency when it does not hold any securities traded in that currency.



4 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

DISCLOSURES AND RISKS

Benchmark Disclosure

The MSCI EM Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI EM Index (net, free float-adjusted, market capitalization weighted) represents the equity market performance of emerging markets. 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

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

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.

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

Sector Risk: The Fund may have more risk because of concentrated investments in a particular market sector, such as the technology or financial-services sector. Market or economic factors affecting that sector could have a major effect on the value of the Fund’s investments.

Management Risk: The Fund is subject to management risk because it is an actively managed investment fund. The Adviser will apply its investment



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 5

DISCLOSURES AND RISKS (continued)

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 in this report 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.



6 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

11/13/2014¹ TO 12/31/2019

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB FlexFee Emerging Markets Growth Portfolio Advisor Class shares (from 11/13/2014¹ to 12/31/2019) as compared to the performance of the Fund’s benchmark.

1	Inception date: 11/13/2014.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 7

HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES¹

1 Year		25.89%		25.89%

5 Years		4.45%		4.45%

Since Inception²		3.21%		3.21%

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2019 (unaudited)



	SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES

1 Year		25.89%

5 Years		4.45%

Since Inception²		3.21%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 6.25% for Advisor Class shares, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratio exclusive of the Fund’s advisory fee, 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 0.10% for Advisor Class shares. These waivers/reimbursements may not be terminated before April 30, 2020. Any fees waived and expenses borne by the Adviser through December 31, 2018 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 other expenses to exceed the expense limitation. 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 ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

1	This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns.

2	Inception date: 11/13/2014.



8 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

EXPENSE EXAMPLE

(unaudited)

The 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 7/1/2019		Ending Account Value 12/31/2019		Expenses Paid During Period*		Annualized Expense Ratio*
Advisor Class
Actual	$	1,000	$	1,066.60	$	8.07		1.55	%
Hypothetical**	$	1,000	$	1,017.39	$	7.88		1.55	%

*	Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 9

PORTFOLIO SUMMARY

December 31, 2019 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $6.3

LOGO

All data are as of December 31, 2019. The Fund’s sector and country breakdowns are expressed as a percentage of total investments (excluding security lending collateral) and may vary over time. “Other” country weightings represent 1.0% or less in the following: Hong Kong, Malaysia, Philippines, Poland, Switzerland, Thailand and United Arab Emirates.



10 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

PORTFOLIO SUMMARY (continued)

December 31, 2019 (unaudited)

TEN LARGEST HOLDINGS¹



Company	U.S. $ Value		Percent of Net Assets

Alibaba Group Holding Ltd. (Sponsored ADR)	$	556,550		8.8	%

Taiwan Semiconductor Manufacturing Co., Ltd.		453,781		7.1

Samsung Electronics Co., Ltd.		436,664		6.9

New Oriental Education & Technology Group, Inc. (Sponsored ADR)		228,314		3.6

HDFC Bank Ltd.		204,229		3.2

OPAP SA		203,355		3.2

Ping An Insurance Group Co. of China Ltd. – Class H		201,169		3.2

Wuliangye Yibin Co., Ltd. – Class A (Nth SZ-SEHK)		190,917		3.0

Sberbank of Russia PJSC (Sponsored ADR)		180,810		2.8

Yandex NV – Class A		169,176		2.7

	$	2,824,965		44.5	%

1	Long-term investments.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 11

PORTFOLIO OF INVESTMENTS

December 31, 2019


Company	Shares		U.S. $ Value

COMMON STOCKS – 100.9%
Financials – 26.9%
Banks – 17.5%
Bank Central Asia Tbk PT		63,000	$	151,515
Bank for Foreign Trade of Vietnam JSC		24,850		96,829
Bank Mandiri Persero Tbk PT		185,000		102,224
Bank of the Philippine Islands		25,610		44,449
Capitec Bank Holdings Ltd.		660		68,148
HDFC Bank Ltd.		11,415		204,229
IndusInd Bank Ltd.		6,088		128,956
Itau Unibanco Holding SA (Preference Shares)		2,500		23,155
Sberbank of Russia PJSC (Sponsored ADR)		11,025		180,810
TCS Group Holding PLC (GDR)^(a)		5,210		112,015

				1,112,330

Capital Markets – 2.6%
B3 SA – Brasil Bolsa Balcao		12,300		132,134
New Frontier Health Corp.^(b)(c)		3,150		31,500

				163,634

Consumer Finance – 2.9%
Manappuram Finance Ltd.		26,630		66,087
Muangthai Capital PCL		27,200		57,889
Muthoot Finance Ltd.		5,480		58,456

				182,432

Insurance – 3.1%
Ping An Insurance Group Co. of China Ltd. – Class H		17,000		201,169


Thrifts & Mortgage Finance – 0.8%
Housing Development Finance Corp., Ltd.		1,462		49,444

				1,709,009

Information Technology – 26.2%
Electronic Equipment, Instruments & Components – 2.1%
Elite Material Co., Ltd.		6,000		27,563
Hangzhou Hikvision Digital Technology Co., Ltd. – Class A		21,100		99,527
Samsung SDI Co., Ltd.		18		3,667

				130,757

IT Services – 2.8%
GDS Holdings Ltd. (ADR)^(c)		1,320		68,085
HCL Technologies Ltd.		3,920		31,249
My EG Services Bhd		60,500		16,283
Network International Holdings PLC^(a)(c)		4,290		36,316
TravelSky Technology Ltd. – Class H		11,000		26,853

				178,786



12 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Semiconductors & Semiconductor Equipment – 13.3%
MediaTek, Inc.		9,000	$	133,354
Micron Technology, Inc.^(c)		2,680		144,130
SK Hynix, Inc.		1,400		113,873
Taiwan Semiconductor Manufacturing Co., Ltd.		41,000		453,781

				845,138

Software – 1.1%
Douzone Bizon Co., Ltd.^(c)		1,020		71,304


Technology Hardware, Storage & Peripherals – 6.9%
Samsung Electronics Co., Ltd.		4,260		205,276
Samsung Electronics Co., Ltd. (Preference Shares)		5,910		231,388

				436,664

				1,662,649

Consumer Discretionary – 20.1%
Diversified Consumer Services – 4.9%
Four Seasons Education Cayman, Inc. (ADR)^(c)		1,102		1,763
Fu Shou Yuan International Group Ltd.		100,000		84,707
New Oriental Education & Technology Group, Inc. (Sponsored ADR)^(c)		1,883		228,314

				314,784

Hotels, Restaurants & Leisure – 3.9%
Huazhu Group Ltd. (ADR)		810		32,457
OPAP SA		15,630		203,355
Premium Leisure Corp.		845,000		9,510

				245,322

Internet & Direct Marketing Retail – 11.3%
Alibaba Group Holding Ltd. (Sponsored ADR)^(c)		2,624		556,550
Baozun, Inc. (Sponsored ADR)^(b)(c)		880		29,146
Naspers Ltd. – Class N		374		61,204
Prosus NV^(c)		924		69,154

				716,054

				1,276,160

Consumer Staples – 8.7%
Beverages – 7.0%
Fomento Economico Mexicano SAB de CV		8,900		83,942
Kweichow Moutai Co., Ltd. – Class A (Nth SSE-SEHK)		980		166,876
Wuliangye Yibin Co., Ltd. – Class A (Nth SZ-SEHK)		9,970		190,917

				441,735

Food & Staples Retailing – 1.0%
Dino Polska SA^(a)(c)		1,760		66,779


Personal Products – 0.2%
TCI Co., Ltd.		1,148		10,920



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 13

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Tobacco – 0.5%
VST Industries Ltd.		590	$	34,759

				554,193

Communication Services – 6.7%
Interactive Media & Services – 5.6%
58.com, Inc. (ADR)^(c)		485		31,394
Momo, Inc. (Sponsored ADR)		2,360		79,060
Tencent Holdings Ltd.		1,600		77,082
Yandex NV – Class A^(c)		3,890		169,176

				356,712

Wireless Telecommunication Services – 1.1%
Safaricom PLC		220,850		68,859

				425,571


Industrials – 5.4%
Commercial Services & Supplies – 1.9%
Sunny Friend Environmental Technology Co., Ltd.		15,000		116,951


Construction & Engineering – 0.7%
Larsen & Toubro Ltd.		2,500		45,714


Professional Services – 0.2%
L&T Technology Services Ltd.^(a)		680		13,957


Road & Rail – 2.0%
Globaltrans Investment PLC (Sponsored GDR)^(a)		3,166		28,019
Localiza Rent a Car SA		8,190		96,971

				124,990

Transportation Infrastructure – 0.6%
Adani Ports & Special Economic Zone Ltd.		7,451		38,242

				339,854

Real Estate – 3.1%
Equity Real Estate Investment Trusts (REITs) – 1.6%
Embassy Office Parks REIT^(c)		16,400		98,304


Real Estate Management & Development – 1.5%
Vincom Retail JSC		64,280		94,412

				192,716

Utilities – 2.6%
Electric Utilities – 2.6%
Equatorial Energia SA		29,000		164,999


Health Care – 1.2%
Health Care Equipment & Supplies – 0.2%
Yestar Healthcare Holdings Co., Ltd.^(c)		57,500		10,995



14 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


Company		Shares			U.S. $ Value

Health Care Providers & Services – 1.0%
Jinxin Fertility Group Ltd.^(a)(b)(c)			49,200		$	65,816

						76,811

Total Common Stocks (cost $5,535,029)						6,401,962


EQUITY LINKED NOTES – 2.1%
Information Technology – 1.2%
FPT Corp., Macquarie Bank Ltd., expiring 3/31/21^(c)(d)			30,600			76,987


Industrials – 0.6%
Han’s Laser Technology Industry Group Co., UBS AG, expiring 3/06/20^(c)			6,100			35,029


Consumer Discretionary – 0.3%
Mobile World Investment Corp., Macquarie Bank Ltd., expiring 3/31/20^(c)			3,666			18,035


Total Equity Linked Notes (cost $138,367)						130,051


SHORT-TERM INVESTMENTS – 0.4%
Investment Companies – 0.4%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(e)(f)(g) (cost $27,291)			27,291			27,291


		Principal Amount (000)
Time Deposits – 0.0%
BBH Grand Cayman
(1.70)%, 1/03/20	CHF		0	*		12
(1.00)%, 1/02/20	ZAR		10			734
(0.68)%, 1/02/20	EUR		1			755
0.36%, 1/02/20	GBP		0	*		182
0.63%, 1/02/20	SGD		0	*		42
1.66%, 1/02/20	HKD		5			660


Total Time Deposits (cost $2,385)						2,385


Total Short-Term Investments (cost $29,676)						29,676


Total Investments Before Security Lending Collateral for Securities Loaned – 103.4% (cost $5,703,072)						6,561,689



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 15

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value


INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED – 1.2%
Investment Companies – 1.2%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(e)(f)(g) (cost $79,851)		79,851	$	79,851


Total Investments – 104.6% (cost $5,782,923)				6,641,540
Other assets less liabilities – (4.6)%				(293,849	)


Net Assets – 100.0%			$	6,347,691

*	Principal amount less than 500.

(a)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2019, the aggregate market value of these securities amounted to $322,902 or 5.1% of net assets.

(b)	Represents entire or partial securities out on loan. See Note E for securities lending information.

(c)	Non-income producing security.

(d)	Illiquid security.

(e)	The rate shown represents the 7-day yield as of period end.

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

(g)	Affiliated investments.

Currency Abbreviations:

CHF – Swiss Franc

EUR – Euro

GBP – Great British Pound

HKD – Hong Kong Dollar

SGD – Singapore Dollar

ZAR – South African Rand

Glossary:

ADR – American Depositary Receipt

GDR – Global Depositary Receipt

JSC – Joint Stock Company

PJSC – Public Joint Stock Company

REIT – Real Estate Investment Trust

See notes to financial statements.



16 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

STATEMENT OF ASSETS & LIABILITIES

December 31, 2019


Assets
Investments in securities, at value Unaffiliated issuers (cost $5,675,781)	$	6,534,398	^(a)
Affiliated issuers (cost $107,142—including investment of cash collateral for securities loaned of $79,851)		107,142
Foreign currencies, at value (cost $10,955)		10,980
Receivable for investment securities sold		35,906
Unaffiliated dividends receivable		9,014
Affiliated dividends receivable		83

Total assets		6,697,523

Liabilities
Payable for collateral received on securities loaned		79,851
Payable for investment securities purchased and foreign currency transactions		63,620
Advisory fee payable		61,857
Audit and tax fee payable		57,225
Dividends payable		30,540
Custody fee payable		23,367
Transfer Agent fee payable		1,500
Due to Custodian		13
Accrued expenses and other liabilities		31,859

Total liabilities		349,832

Net Assets	$	6,347,691

Composition of Net Assets
Capital stock, at par	$	58
Additional paid-in capital		5,743,975
Distributable earnings		603,658

	$	6,347,691

Net Asset Value Per Share—30 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

Advisor	$	6,347,691		578,525	$	10.97

(a)	Includes securities on loan with a value of $76,572 (See Note D).

See notes to financial statements.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 17

STATEMENT OF OPERATIONS

Year Ended December 31, 2019


Investment Income
Dividends Unaffiliated issuers (net of foreign taxes withheld of $11,682)	$	116,914
Affiliated issuers		2,619
Securities lending income		1,378
Interest		49		$	120,960

Expenses
Advisory fee (see Note B)		79,800
Transfer agency-Advisor Class		18,434
Custodian		80,757
Administrative		79,472
Audit and tax		67,650
Legal		32,732
Registration fees		27,842
Directors’ fees		22,927
Printing		14,701
Miscellaneous		46,420

Total expenses		470,735
Less: expenses waived and reimbursed by the Adviser (see Note B and Note D)		(385,458	)

Net expenses					85,277

Net investment income					35,683

Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions
Net realized loss on:
Investment transactions					(172,217	)^(a)
Futures					(3,499	)
Foreign currency transactions					(3,383	)
Net change in unrealized appreciation/depreciation on:
Investments					1,402,220	^(b)
Foreign currency denominated assets and liabilities					187

Net gain on investment and foreign currency transactions					1,223,308

Net Increase in Net Assets from Operations				$	1,258,991

(a)	Net of foreign capital gains taxes of $860.

(b)	Net of decrease in accrued foreign capital gains taxes of $94.

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31, 2019			Year Ended December 31, 2018
Increase (Decrease) in Net Assets from Operations
Net investment income	$	35,683		$	97,782
Net realized gain (loss) on investment and foreign currency transactions		(179,099	)		236,266
Net change in unrealized appreciation/depreciation on investments and foreign currency denominated assets and liabilities		1,402,407			(1,902,991	)

Net increase (decrease) in net assets from operations		1,258,991			(1,568,943	)
Distributions to Shareholders
Advisor Class		(33,653	)		(237,979	)
Capital Stock Transactions
Net increase		456,724			320,998

Total increase (decrease)		1,682,062			(1,485,924	)
Net Assets
Beginning of period		4,665,629			6,151,553

End of period	$	6,347,691		$	4,665,629

See notes to financial statements.



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NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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 comprised of 28 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB FlexFee Emerging Markets Growth Portfolio (the “Fund”), a diversified portfolio. The Fund has authorized issuance of Class A, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares. Class R, Class K, Class I, Class Z, Class T, Class 1 or Class 2 shares have not been issued, and no shares of Class A or Class C were outstanding as of December 31, 2019. Advisor Class shares are sold without an 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



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NOTES TO FINANCIAL STATEMENTS (continued)

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, AllianceBernstein L.P. (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.



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NOTES TO FINANCIAL STATEMENTS (continued)

equity securities using fair value prices based on third party vendor modeling tools to the extent available.

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)

The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which are then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3.



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NOTES TO FINANCIAL STATEMENTS (continued)

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.

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2019:

Investments in
Securities

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks:

Financials

436,922

1,272,087

– 0

–

1,709,009

Information Technology

243,464

1,419,185

– 0

–

1,662,649

Consumer Discretionary

857,740

418,420

– 0

–

1,276,160

Consumer Staples

118,701

435,492

– 0

–

554,193

Communication Services

348,489

77,082

– 0

–

425,571

Industrials

41,976

297,878

– 0

–

339,854

Real Estate

98,304

94,412

– 0

–

192,716

Utilities

– 0

–

164,999

– 0

–

164,999

Health Care

10,995

65,816

– 0

–

76,811

Equity Linked Notes:

Information Technology

– 0

–

76,987

– 0

–

76,987

Industrials

– 0

–

35,029

– 0

–

35,029

Consumer Discretionary

– 0

–

18,035

– 0

–

18,035

Short-Term Investments:

Investment Companies

27,291

– 0

–

– 0

–

27,291

Time Deposits

– 0

–

2,385

– 0

–

2,385

Investments of Cash Collateral for Securities Loaned in

Affiliated Money Market Fund

79,851

– 0

–

– 0

–

79,851

Total Investments in Securities

2,263,733

4,377,807

†

– 0

–

6,641,540

Other Financial Instruments*

– 0

–

– 0

–

– 0

–

– 0

–

Total

2,263,733

4,377,807

– 0

–

6,641,540

†	A significant portion of the Fund’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 A.1.



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NOTES TO FINANCIAL STATEMENTS (continued)

3. Currency Translation

4. Taxes

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 and the prior three 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



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NOTES TO FINANCIAL STATEMENTS (continued)

6. Expense Allocations

Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods.

7. Dividends and Distributions

NOTE B

Advisory Fee and Other Transactions with Affiliates

Effective July 1, 2017, under an amended investment advisory agreement, the Fund calculates and accrues daily a base fee, at an annualized rate of .75% of the Fund’s average daily net assets (“Base Fee”). The advisory fee is increased or decreased from the Base Fee by a performance adjustment (“Performance Adjustment”) that depends on whether, and to what extent, the investment performance of the Advisor Class shares of the Fund (“Measuring Class”) exceeds, or is exceeded by, the performance of the MSCI Emerging Markets Index (net) (“Index”) plus 1.75% (“Index Hurdle”) over the Performance Period (as defined below). For the period from August 4, 2017 to October 31, 2017, the MSCI Emerging Markets Index with IDCo Fair Value Pricing (net) was used for purposes of calculating the Performance Adjustment. The Performance Adjustment is calculated and accrued daily, according to a schedule that adds or subtracts .004% of the Fund’s average daily net assets for each .01% of absolute performance by which the performance of the Measuring Class exceeds or lags the Index Hurdle for the period from the beginning of the Performance Period through the current business day. The maximum Performance Adjustment (positive or negative) will not exceed an annualized rate of +/-.70% (“Maximum Performance Adjustment”) of the Fund’s average daily net assets, which would occur when the performance of the Measuring Class exceeds, or is exceeded by, the Index Hurdle by 1.75% for the Performance Period. On a monthly basis, the Fund will pay the Adviser the minimum fee rate of .05% on an annualized basis (Base Fee minus the Maximum Performance Adjustment) applied to the average daily net assets for the month. At the end of the Performance Period, the Fund will pay to the Adviser the total advisory fee, less the amount of any minimum fees paid during the Performance Period and any waivers described below in this section. The Performance Period was initially from July 1, 2017 to December 31, 2018 and thereafter is each 12-month period beginning on the first day in the month of January through December 31 of the same



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NOTES TO FINANCIAL STATEMENTS (continued)

year. In addition, the Adviser has agreed to waive its advisory fee by limiting the Fund’s accrual of the advisory fee (Base Fee plus Performance Adjustment) on any day to the amount corresponding to the maximum fee rate multiplied by the Fund’s current net assets if such amount is less than the amount that would have been accrued based on the Fund’s average daily net assets for the Performance Period. For the year ended December 31, 2019, the Fund accrued advisory fees of $79,800, as reflected in the statement of operations, at an annual effective rate (excluding the impact from any expense waivers in effect) of 1.45% of the Fund’s average net assets, which reflected a .70% Performance Adjustment of $38,526.

The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total expenses (other than the advisory fee, 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 from exceeding .10% of average daily net assets (the “Expense Cap”). For the year ended December 31, 2019, the reimbursements/ waivers amounted to $305,896. The Expense Cap will remain in effect until April 30, 2020 and then may be continued thereafter from year to year by the Adviser. Any fees waived and expenses borne by the Adviser through December 31, 2018 are subject to repayment 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; such waivers that are subject to repayment amount to $169,436 for the period ended December 31, 2017 and $282,312 for the year ended December 31, 2018. In any case, no repayment will be made that would cause the Fund’s total annual expenses (subject to the exclusions set forth above) to exceed .10% of average daily net assets.

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 $18,000 for the year ended December 31, 2019.

The Fund may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual



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NOTES TO FINANCIAL STATEMENTS (continued)

advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2020. In connection with the investment by the Fund in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Fund in an amount equal to the Fund’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. For the year ended December 31, 2019, such waiver amounted to $70.

A summary of the Fund’s transactions in AB mutual funds for the year ended December 31, 2019 is as follows:


Fund	Market Value 12/31/18 (000)			Purchases at Cost (000)		Sales Proceeds (000)		Market Value 12/31/19 (000)		Dividend Income (000)
Government Money Market Portfolio	$	– 0	–	$	3,217	$	3,190	$	27	$	2
Government Money Market Portfolio*		31			609		560		80		1

Total								$	107	$	3

*	Investment of cash collateral for securities lending transactions (see Note D).

During the second quarter of 2018, AXA S.A. (“AXA”), a French holding company for the AXA Group, a worldwide leader in life, property and casualty and health insurance and asset management, completed the sale of a minority stake in its subsidiary, AXA Equitable Holdings, Inc. (now named Equitable Holdings, Inc.)(“Equitable”), through an initial public offering. Equitable is the holding company for a diverse group of financial services companies, including an approximately 65.3% economic interest in the Adviser and a 100% interest in AllianceBernstein Corporation, the general partner of the Adviser. Since the initial sale, AXA has completed additional offerings, most recently during the fourth quarter of 2019. As a result, AXA currently owns 10.1% of the outstanding shares of common stock of Equitable, and no longer owns a controlling interest in Equitable. AXA previously announced its intention to sell its entire interest in Equitable over time, subject to market conditions and other factors (the “Plan”). Most of AXA’s remaining Equitable shares are to be delivered on redemption of AXA bonds mandatorily exchangeable into Equitable shares and maturing in May 2021. AXA retains sole discretion to determine the timing of any future sales of its remaining shares of Equitable common stock.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE C

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended December 31, 2019, were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	7,430,470		$	6,997,326
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	$	5,795,273

Gross unrealized appreciation	$	961,894
Gross unrealized depreciation		(115,627	)

Net unrealized appreciation	$	846,267

1. Derivative Financial Instruments

The principal types of derivatives utilized by the Fund, as well as the methods in which they may be used are:

•

Futures



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NOTES TO FINANCIAL STATEMENTS (continued)

purchase or sell futures for foreign currencies or options thereon for non-hedging purposes as a means of making direct investment in foreign currencies, as described below under “Currency Transactions”.

At the time the Fund enters into futures, the Fund deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is effected. Such amount is shown as cash collateral due from broker on the statement of assets and liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for exchange-traded futures is generally less than privately negotiated futures, since the clearinghouse, which is the issuer or counterparty to each exchange-traded future, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.

Use of long futures subjects the Fund to risk of loss in excess of the amounts shown on the statement of assets and liabilities, up to the notional value of the futures. Use of short futures subjects the Fund to unlimited risk of loss. Under some circumstances, futures exchanges may establish daily limits on the amount that the price of futures can vary from the previous day’s settlement price, which could effectively prevent liquidation of unfavorable positions.

During the year ended December 31, 2019, the Fund held futures for non-hedging purposes.

During the year ended December 31, 2019, the Fund had entered into the following derivatives:


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Equity contracts	Net realized gain/(loss) on futures; Net change in unrealized appreciation/ depreciation on futures	$	(3,499	)	$	– 0	–

Total		$	(3,499	)	$	– 0	–



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NOTES TO FINANCIAL STATEMENTS (continued)

The following table represents the average monthly volume of the Fund’s derivative transactions during the year ended December 31, 2019:


Futures:
Average notional amount of buy contracts	$	49,722	^(a)

(a)	Positions were open for one month during the reporting period.

2. Currency Transactions

NOTE D

Securities Lending



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NOTES TO FINANCIAL STATEMENTS (continued)

existence of a loan, but will have the right to regain ownership of loaned securities in order to exercise voting or other ownership rights. Collateral received and securities loaned are marked to market daily to ensure that the securities loaned are secured by collateral. The lending agent currently invests the cash collateral received in Government Money Market Portfolio, an eligible money market vehicle, in accordance with the investment restrictions of the Fund, and as approved by the Board. The collateral received on securities loaned is recorded as an asset as well as a corresponding liability in the statement of assets and liabilities. The collateral will be adjusted the next business day to maintain the required collateral amount. The amounts of securities lending income from the borrowers and Government Money Market Portfolio are reflected in the statement of operations. When the Fund earns net securities lending income from Government Money Market Portfolio, the income is inclusive of a rebate expense paid to the borrower. In connection with the cash collateral investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive a portion of the Fund’s share of the advisory fees of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. A principal risk of lending portfolio securities is that the borrower may fail to return the loaned securities upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for the year ended December 31, 2019 is as follows:


								Government Money Market Portfolio
Market Value of Securities on Loan*	Cash Collateral*		Market Value of Non-Cash Collateral*			Income from Borrowers		Income Earned		Advisory Fee Waived
$ 76,572	$	79,851	$	– 0	–	$	1,378	$	1,084	$	20

*	As of December 31, 2019.



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NOTES TO FINANCIAL STATEMENTS (continued)

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 December 31, 2019			Year Ended December 31, 2018			Year Ended December 31, 2019			Year Ended December 31, 2018

Advisor Class
Shares sold		45,284			7,800		$	453,709		$	83,021

Shares issued in reinvestment of dividends and distributions		284			27,167			3,113			237,979

Shares redeemed		(10	)		0	^(a)		(98	)		(2	)

Net increase		45,558			34,967		$	456,724		$	320,998

(a)	less than 0.5 shares.

At December 31, 2019 the Adviser owned 91% of the Fund’s outstanding shares. Significant transactions by such shareholder, if any, may impact the Fund’s performance.

NOTE F

Risks Involved in Investing in the Fund

Emerging Market Risk—Investments in emerging market countries may have more risk because the markets are less developed and less liquid, and because these investments may be 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.

Derivatives Risk—The Fund may enter into derivative transactions such as forwards, options, futures and swaps. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Fund, and may be subject to counterparty risk to a greater degree than more traditional investments. Derivatives may result in significant losses, including losses that are far greater than the value of the derivatives reflected in the statement of assets and liabilities.



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NOTES TO FINANCIAL STATEMENTS (continued)

Sector Risk—The Fund may have more risk because of concentrated investments in a particular market sector, such as the technology or financial services sector. Market or economic factors affecting that sector could have a major effect on the value of the Fund’s investments.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE G

Joint Credit Facility

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended December 31, 2019 and December 31, 2018 were as follows:


	2019			2018
Distributions paid from:
Ordinary income	$	33,653		$	97,273
Long-term capital gains		– 0	–		140,706

Total taxable distributions paid	$	33,653		$	237,979

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Undistributed ordinary income	$	609
Accumulated capital and other losses		(243,205	)^(a)
Unrealized appreciation/(depreciation)		846,269	^(b)

Total accumulated earnings/(deficit)	$	603,673	^(c)

(a)	As of December 31, 2019, the Fund had a net capital loss carryforward of $243,205.

(b)	The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the tax treatment of passive foreign investment companies (PFICs) and the tax deferral of losses on wash sales.

(c)	The difference between book-basis and tax-basis components of accumulated earnings/(deficit) is attributable primarily to the accrual of foreign capital gains tax.

During the current fiscal year, there were no permanent differences that resulted in adjustments to distributable earnings or additional paid-in capital.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE I

Recent Accounting Pronouncements

NOTE J

Subsequent Events



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FINANCIAL HIGHLIGHTS

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


	Advisor Class
	Year Ended December 31,						July 1, 2017 to December 31, 2017^(a)			Year Ended June 30,						November 13, 2014^(b) to June 30, 2015
	2019			2018			July 1, 2017 to December 31, 2017^(a)			2017			2016			November 13, 2014^(b) to June 30, 2015

Net asset value, beginning of period		$ 8.75			$ 12.35			$ 10.90			$ 8.82			$ 9.64			$ 10.00

Income From Investment Operations

Net investment income^(c)(d)		.07			.20			.06			.03			.02			.01

Net realized and unrealized gain (loss) on investment and foreign currency transactions		2.21			(3.33	)		1.47			2.08			(.82	)		(.37	)

Capital Contributions		– 0	–		– 0	–		– 0	–		– 0	–		.00	^(e)		– 0	–


Net increase (decrease) in net asset value from operations		2.28			(3.13	)		1.53			2.11			(.80	)		(.36	)

Less: Dividends and Distributions

Dividends from net investment income		(.06	)		(.19	)		(.08	)		(.03	)		(.02	)		– 0	–

Distributions from net realized gain on investment and foreign currency transactions		– 0	–		(.28	)		– 0	–		– 0	–		– 0	–		– 0	–

Total dividends and distributions		(.06	)		(.47	)		(.08	)		(.03	)		(.02	)		– 0	–

Net asset value, end of period		$ 10.97			$ 8.75			$ 12.35			$ 10.90			$ 8.82			$ 9.64


Total Return

Total investment return based on net asset value^(f)		26.04	%^		(25.34	) %^		13.96	%		24.06	%		(8.27	) %		(3.60	) %

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$6,348			$4,666			$6,152			$5,430			$4,394			$4,799

Ratio to average net assets of:

Expenses, net of waivers/reimbursements		1.55	%		.15	%^(g)		.15	%^(h)		1.40	%		1.40	%		1.45	%^(h)

Expenses, before waivers/reimbursements		8.55	%		6.25	%^(g)		7.08	%^(h)		7.50	%		7.99	%		8.01	%^(h)

Net investment income^(d)		.65	%		1.71	%		1.02	%^(h)		.34	%		.28	%		.22	%^(h)

Portfolio turnover rate		128	%		83	%		30	%		79	%		77	%		31	%

See footnote summary on page 37.



36 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

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

(a)	The Fund changed its fiscal year end from June 30 to December 31.

(b)	Commencement of operations.

(c)	Based on average shares outstanding.

(d)	Net of expenses waived/reimbursed by the Adviser.

(e)	Amount is less than $0.005.

(f)

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. Total investment 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 for a period of less than one year is not annualized.

(g)	The advisory fee reflected in the Fund’s expense ratio may be higher or lower than the Base Fee plus Performance Adjustment due to the different time periods over which the fee is calculated (i.e., the financial reporting period vs. the Performance Period).

(h)	Annualized.

^	The net asset value and total return include adjustments in accordance with accounting principles generally accepted in the United States of America for financial reporting purposes. As such, the net asset value and total return for shareholder transactions may differ from financial statements.

See notes to financial statements.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 37

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of AB FlexFee Emerging Markets Growth Portfolio:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB FlexFee Emerging Markets Growth Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of December 31, 2019, 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, the financial highlights for each of the two years in the period then ended, the period July 1, 2017 to December 31, 2017, and each of the three years in the period ended June 30, 2017 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting AB Cap Fund, Inc.) at December 31, 2019, 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 its financial highlights for each of the two years in the period then ended, the period July 1, 2017 to December 31, 2017, and each of the three years in the period ended June 30, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.



38 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

February 26, 2020



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 39

2019 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund for the calendar year ended December 31, 2019.

For individual shareholders, the Fund designates 100% of dividends paid as qualified dividend income.

The Fund intends to make an election to pass through foreign taxes to its shareholders. For the calendar year ended December 31, 2019, $10,867 of foreign taxes may be passed through and the associated foreign source income for information reporting purposes is $44,019.



40 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

BOARD OF DIRECTORS

Marshall C. Turner, Jr.⁽¹⁾, Chairman

Jorge A. Bermudez*

Michael J. Downey⁽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

Laurent Saltiel⁽²⁾, Vice President
Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller
Vincent S. Noto, Chief Compliance Officer

Custodian and Accounting Agent

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

Transfer Agent

AllianceBernstein Investor Services, Inc.

P.O. Box 786003

San Antonio, TX 78278-6003

Toll-Free (800) 221-5672

Independent Registered Public

Accounting Firm

Ernst & Young LLP

5 Times Square

New York, NY 10036

Legal Counsel

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

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 Adviser’s Emerging Markets Growth Investment Team. Mr. Saltiel is the investment professional with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

*	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee when he joins the Board on January 1, 2020.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 41

MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS 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 59 (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.		91	None



42 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2015)	Private Investor since prior to 2015. 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 all AB funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		91	Xilinx, Inc. (programmable logic semi-conductors) since 2007



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 43

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Jorge A. Bermudez,^{^} 68 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since 2020.		91	Moody’s Corporation since April 2011


Michael J. Downey,^## 76 (2015)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. 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.		91	None



44 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Nancy P. Jacklin,^## 71 (2015)	Private Investor since prior to 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 Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		91	None



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 45

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		91	None



46 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Garry L. Moody,^## 67 (2015)	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 is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council Governing Council. He has served as a director or trustee and as Chairman of the Audit Committees of the AB Funds since 2008.		91	None



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 47

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Earl D. Weiner,^## 80 (2015)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He 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.		91	None

*	The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department - Mutual Fund Legal, 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.

^	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and Independent Directors Committee when he joins the Board on January 1, 2020.



48 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)

Officer Information

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


Robert M. Keith 59	President and Chief Executive Officer	See biography above.

Laurent Saltiel 50	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Chief Investment Officer of Emerging Markets Growth.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 60	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of ABIS**, with which she has been associated since prior to 2015.

Vincent S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	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.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 49

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 FlexFee^TM Emerging Markets Growth Portfolio (the “Fund”) at a meeting held on May 7-9, 2019 (the “Meeting”).



50 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

Nature, Extent and Quality of Services Provided

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues and expenses and related notes indicating the profitability of the Fund to the Adviser for calendar years 2017 and 2018 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Fund’s former Senior Officer/Independent Compliance 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 fund advisory contracts for unaffiliated funds because comparative information is not



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 51

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 periods reviewed. The directors noted that, due to the performance fee component of the advisory fee, profitability would tend to be higher with better performance relative to the Fund’s benchmark index, which they considered to create an appropriate alignment of incentives.

Fall-Out Benefits

Investment Results

At the Meeting, the directors reviewed performance information prepared by an independent service provider (the “15(c) service provider”), showing the performance of the Advisor Class shares of the Fund against a group of similar funds (“peer group”) and a larger group of similar funds (“peer universe”), each selected by the 15(c) service provider, and information prepared by the Adviser showing performance of the Advisor Class shares against a broad-based securities market index, in each case for the 1- and 3-year periods ended February 28, 2019 and (in the case of comparisons with the broad-based securities market index) for the period from inception. Based on their review, and their discussion with the Adviser of the reasons for the Fund’s underperformance in the periods reviewed, the directors concluded that the Fund’s investment performance was acceptable.

Advisory Fees and Other Expenses



52 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

advisory fees because there are variations in the services that are included in the fees payable by other funds. The directors compared the Fund’s contractual effective advisory fee rate with a peer group median.

The directors also considered the Adviser’s fee schedule for other clients pursuing an investment strategy similar to the Fund’s. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule and the schedule of fees charged by the Adviser to any offshore funds and for services to any sub-advised funds pursuing an investment strategy similar to the Fund’s, 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 directors previously discussed these matters with an independent fee consultant. The directors also compared the advisory fee rate for the Fund with that for another fund advised by the Adviser with a similar investment strategy.

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 this regard, the Adviser noted, among other things, that, compared to institutional and offshore or sub-advisory accounts, the Fund (i) demands considerably more portfolio management, research and trading resources due to significantly higher daily cash flows; (ii) has more tax and regulatory restrictions and compliance obligations; (iii) must prepare and file or distribute regulatory and other communications about fund operations; and (iv) must provide shareholder servicing to retail investors. The Adviser also reviewed the greater legal risks presented by the large and changing population of Fund shareholders who may assert claims against the Adviser in individual or class actions, and the greater entrepreneurial risk in offering new fund products, which require substantial investment to launch, may not succeed, and generally must be priced to compete with larger, more established funds resulting in lack of profitability to the Adviser until a new fund achieves scale. In light of the substantial differences in services rendered by the Adviser to institutional, offshore fund and sub-advised fund clients as compared to the Fund, and the different risk profile, the directors considered these fee comparisons inapt and did not place significant weight on them in their deliberations.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 53

cost-effective way to obtain desired exposures, in some cases pending purchases of underlying securities, that the advisory fee for the Fund would be for services in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.

In connection with their review of the Fund’s advisory fee, the directors also considered the total expense ratio of the Advisor Class shares of the Fund in comparison to a peer group and a peer universe selected by each 15(c) service provider. The Advisor Class expense ratio of the Fund was based on the Fund’s latest fiscal year and the directors considered the Adviser’s expense cap for the Fund. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view the 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.

Economies of Scale



54 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

This page is not part of the Shareholder Report or the Financial Statements

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

INTERNATIONAL/ GLOBAL EQUITY (continued)

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio¹

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

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

Multi-Manager Select 2060 Fund

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

1	Prior to July 12, 2019, Total Return Bond Portfolio was named Intermediate Bond Portfolio; prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 55

NOTES



56 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

NOTES



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 57

NOTES



58 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

NOTES



abfunds.com		AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO ^\| 59

NOTES



60 ^\| AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO		abfunds.com

LOGO

AB FLEXFEE EMERGING MARKETS GROWTH PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

FFEMG-0151-1219 LOGO

DEC^12.31.19

LOGO

ANNUAL REPORT

AB FLEXFEE^TM INTERNATIONAL STRATEGIC CORE PORTFOLIO

LOGO



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.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB FlexFee International Strategic Core Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

⁺

Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



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ANNUAL REPORT

February 10, 2020

This report provides management’s discussion of fund performance for AB FlexFee International Strategic Core Portfolio for the annual reporting period ended December 31, 2019.

The Fund’s investment objective is to seek long-term growth of capital.

NAV RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	6 Months		12 Months

AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO

Advisor Class Shares		5.89%		18.94%

MSCI EAFE Index (net)		7.01%		22.01%

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Morgan Stanley Capital International Europe, Australasia and the Far East (“MSCI EAFE”) Index (net), for the six- and 12-month periods ended December 31, 2019.

The Fund underperformed the benchmark for both periods. The Fund’s performance-based advisory fee was accrued at its minimum rate for the performance period from January 1, 2019 through December 31, 2019. During the 12-month period, stock selection within the industrials sector detracted, relative to the benchmark, while selection in communication services contributed. An overweight to communication services detracted, while an overweight to technology contributed. Country allocation (a result of bottom-up security analysis combined with fundamental research) detracted because of an overweight to Israel, while an overweight to the Netherlands contributed.

For the six-month period, stock selection within technology detracted, while selection in communication services contributed. An underweight to health care detracted, while an overweight to technology contributed. An overweight to Israel detracted, while an underweight to Australia contributed.

The Fund utilized derivatives in the form of currency forwards for hedging purposes, which detracted from absolute returns during both periods. The Fund utilized futures for investment purposes, which had no material impact on returns during either period.



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MARKET REVIEW AND INVESTMENT STRATEGY

International stocks recorded strong double-digit returns, while emerging markets also rallied, during the 12-month period ended December 31, 2019. After declining sharply at the end of 2018, equity markets rebounded dramatically in January, as strong corporate earnings and optimism about a trade truce between the US and China calmed investors. Trade war tensions resurfaced, however, and emerging geopolitical pressures drove market volatility. Tariff wars, restrictive monetary policy and a decline in industrial production stoked recessionary fears throughout the global economy. In response, the world’s central banks implemented accommodative monetary policies to help support capital markets. Late in the third quarter, equity market performance was accompanied by a sharp style rotation in the US. Quality-growth and lower-volatility stocks, which had been strong performers, lagged, and value stocks outperformed. However, for the most part, growth stocks outperformed value over the entire period. From a market-capitalization perspective, large-cap stocks outperformed their small-cap peers. In December, equity markets rallied on news that the US and China had agreed to a preliminary phase-one trade deal, due to be signed in January 2020.

The Fund’s Senior Investment Management Team (the “Team”) continues to monitor valuations of the most stable companies in the investable universe. The Fund is positioned in such a way as to avoid the most expensive companies based on price to free cash flow, while at the same time aiming to provide downside protection in case of a sell-off. The Team is careful to avoid companies suffering from technological disruptions and changes in consumer preference. The Team continues to uncover what it believes are attractive opportunities with below-market volatility, and sees a diverse set of opportunities in companies with strong capital stewardship, and business models with solid recurring revenues even in cyclical industries, and in companies benefiting from favorable regulations.

INVESTMENT POLICIES

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 sustainable profitability, price stability and attractive valuations. The Adviser will employ an integrated approach that combines both fundamental and quantitative research to identify attractive investment opportunities. Factors that the Adviser will consider in this regard will include: a company’s record and projections of profitability, accuracy and availability of information with

(continued on next page)



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respect to the company, success and experience of management, competitive advantage, low stock price volatility 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. The Adviser will seek to manage the Fund so that it is subject to less share price volatility than many other international mutual funds, although there can be no guarantee that the Adviser will be successful in this regard.

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 $1.5 billion or more. The Fund’s holdings of non-US companies will generally include some companies located in emerging markets.

Fluctuations in currency exchange rates can have a dramatic impact on the returns of equity securities. The Adviser may adjust the foreign currency exposure resulting from the Fund’s security positions through the use of currency-related derivatives, primarily in an effort to minimize the currency risk to which the Fund is subject. However, the Adviser is not required to use such derivatives.



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DISCLOSURES AND RISKS

Benchmark Disclosure

The MSCI EAFE Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The MSCI EAFE Index (net, free float-adjusted, market capitalization weighted) represents the equity market performance of developed markets, excluding the US and 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. Net returns include the reinvestment of dividends after deduction of non-US withholding tax. 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 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.

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 more difficult to trade or dispose of 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.

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

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.



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DISCLOSURES AND RISKS (continued)

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



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HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

6/28/2017¹ TO 12/31/2019

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB FlexFee International Strategic Core Portfolio Advisor Class shares (from 6/28/2017¹ to 12/31/2019) as compared to the performance of the Fund’s benchmark.

1	Inception date: 6/28/2017.



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HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES¹

1 Year		18.94%		18.94%

Since Inception²		6.33%		6.33%

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2019 (unaudited)



	SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES

1 Year		18.94%

Since Inception²		6.33%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 11.93% for Advisor Class shares, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratio exclusive of the Fund’s advisory fees, 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 0.10% for Advisor Class shares. These waivers/reimbursements may not be terminated before April 30, 2020. Any fees waived, and expenses borne by the Adviser through December 31, 2018 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 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 ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

1	This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns.

2	Inception date: 6/28/2017.



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EXPENSE EXAMPLE

(unaudited)

The 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



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EXPENSE EXAMPLE (continued)


	Beginning Account Value 7/1/2019		Ending Account Value 12/31/2019		Expenses Paid During Period*		Annualized Expense Ratio*
Advisor Class
Actual	$	1,000	$	1,058.90	$	0.78		0.15	%
Hypothetical**	$	1,000	$	1,024.45	$	0.77		0.15	%

*	Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



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PORTFOLIO SUMMARY

December 31, 2019 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $6.1

LOGO

All data are as of December 31, 2019. The Fund’s sector and country breakdowns are expressed as a percentage of total investments and may vary over time. The Fund also enters into derivative transactions, which may be used for hedging or investment purposes (see “Portfolio of Investments” section of the report for additional details). “Other” country weightings represent 2.0% or less in the following: Belgium, Denmark, Finland, Italy, Portugal, South Korea and United States.



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PORTFOLIO SUMMARY (continued)

December 31, 2019 (unaudited)

TEN LARGEST HOLDINGS¹



Company	U.S. $ Value		Percent of Net Assets

Roche Holding AG	$	190,452		3.1	%

RELX PLC		165,319		2.7

Oracle Corp. Japan		127,062		2.1

Royal Dutch Shell PLC – Class B		120,308		2.0

Wolters Kluwer NV		119,088		2.0

Constellation Software, Inc./Canada		118,487		2.0

Qantas Airways Ltd.		116,383		1.9

Partners Group Holding AG		115,483		1.9

Aristocrat Leisure Ltd.		112,380		1.8

DBS Group Holdings Ltd.		109,903		1.8

	$	1,294,865		21.3	%

1	Long-term investments.



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PORTFOLIO OF INVESTMENTS

December 31, 2019


Company	Shares		U.S. $ Value

COMMON STOCKS – 98.3%
Financials – 24.3%
Banks – 12.8%
Bank Leumi Le-Israel BM		13,102	$	95,552
DBS Group Holdings Ltd.		5,700		109,903
DNB ASA		3,236		60,555
Hang Seng Bank Ltd.		2,700		55,809
KBC Group NV		1,043		78,637
Mitsubishi UFJ Financial Group, Inc.		11,000		59,470
Oversea-Chinese Banking Corp., Ltd.		7,528		61,583
Royal Bank of Canada		920		72,796
Sumitomo Mitsui Financial Group, Inc.		1,400		51,709
Toronto-Dominion Bank (The)		1,552		87,045
Westpac Banking Corp.		2,588		44,195

				777,254

Capital Markets – 4.1%
Euronext NV^(a)		802		65,555
Partners Group Holding AG		126		115,483
Singapore Exchange Ltd.		10,500		69,154

				250,192

Diversified Financial Services – 1.1%
ORIX Corp.		4,100		67,943


Insurance – 6.3%
Admiral Group PLC		2,760		84,341
Allianz SE (REG)		227		55,621
NN Group NV		1,071		40,722
Sampo Oyj – Class A		1,940		84,707
Swiss Re AG		443		49,768
Zurich Insurance Group AG		168		68,914

				384,073

				1,479,462

Industrials – 14.5%
Aerospace & Defense – 2.5%
Airbus SE		321		47,112
BAE Systems PLC		7,345		54,994
MTU Aero Engines AG		175		49,862

				151,968

Air Freight & Logistics – 1.3%
Kuehne & Nagel International AG		197		33,227
SG Holdings Co., Ltd.		2,000		45,052

				78,279

Airlines – 1.9%
Qantas Airways Ltd.		23,349		116,383


Commercial Services & Supplies – 0.6%
Secom Co., Ltd.		400		35,697



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Professional Services – 8.2%
Experian PLC		2,433	$	82,478
Intertek Group PLC		470		36,419
Intertrust NV^(a)		1,433		27,824
Meitec Corp.		1,200		67,422
RELX PLC		6,549		165,319
Wolters Kluwer NV		1,631		119,088

				498,550

				880,877

Information Technology – 12.6%
IT Services – 3.5%
Amadeus IT Group SA – Class A		1,117		91,479
Capgemini SE		602		73,627
Otsuka Corp.		1,200		47,922

				213,028

Software – 8.3%
Avast PLC^(a)		5,090		30,589
Check Point Software Technologies Ltd.^(b)		890		98,754
Constellation Software, Inc./Canada		122		118,487
Nice Ltd.^(b)		599		92,881
Oracle Corp. Japan		1,400		127,062
SAP SE		271		36,476

				504,249

Technology Hardware, Storage & Peripherals – 0.8%
Samsung Electronics Co., Ltd.		680		32,767
Samsung Electronics Co., Ltd. (GDR)^(a)		15		17,951

				50,718

				767,995

Consumer Staples – 10.3%
Food & Staples Retailing – 1.3%
Koninklijke Ahold Delhaize NV		3,268		81,937


Food Products – 5.0%
Danone SA		517		42,935
Morinaga & Co., Ltd./Japan		1,200		57,626
Nestle SA (REG)		990		107,183
Salmar ASA		1,901		97,419

				305,163

Personal Products – 1.5%
Unilever PLC		1,538		88,039


Tobacco – 2.5%
British American Tobacco PLC		1,624		69,023
Philip Morris International, Inc.		941		80,070

				149,093

				624,232



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Consumer Discretionary – 9.4%
Hotels, Restaurants & Leisure – 3.7%
Aristocrat Leisure Ltd.		4,756	$	112,380
Compass Group PLC		3,245		81,326
Sushiro Global Holdings Ltd.		400		34,447

				228,153

Household Durables – 1.7%
Auto Trader Group PLC		12,880		101,715


Internet & Direct Marketing Retail – 0.6%
Moneysupermarket.com Group PLC		7,810		34,285


Leisure Products – 1.1%
Bandai Namco Holdings, Inc.		1,100		66,915


Specialty Retail – 0.4%
Hikari Tsushin, Inc.		100		25,130


Textiles, Apparel & Luxury Goods – 1.9%
adidas AG		254		82,567
Moncler SpA		750		33,756

				116,323

				572,521

Health Care – 9.3%
Health Care Providers & Services – 0.8%
Galenica AG^(a)(b)		810		50,027


Pharmaceuticals – 8.5%
Astellas Pharma, Inc.		5,800		99,006
GlaxoSmithKline PLC		4,030		94,693
Novo Nordisk A/S – Class B		1,439		83,388
Roche Holding AG		586		190,452
Sanofi		489		49,109

				516,648

				566,675

Communication Services – 6.1%
Diversified Telecommunication Services – 4.1%
Cogeco Communications, Inc.		567		49,428
HKT Trust & HKT Ltd. – Class SS		55,000		77,511
Nippon Telegraph & Telephone Corp.		3,800		96,040
TELUS Corp.		791		30,627

				253,606

Entertainment – 0.7%
Daiichikosho Co., Ltd.		800		41,936


Interactive Media & Services – 1.0%
Kakaku.com, Inc.		2,400		61,279



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PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Media – 0.3%
Informa PLC		1,550	$	17,629

				374,450

Real Estate – 4.4%
Equity Real Estate Investment Trusts (REITs) – 3.4%
Merlin Properties Socimi SA		5,401		77,630
Nippon Building Fund, Inc.		10		73,303
Nippon Prologis REIT, Inc.		23		58,579

				209,512

Real Estate Management & Development – 1.0%
Vonovia SE		1,093		58,704

				268,216

Energy – 3.7%
Oil, Gas & Consumable Fuels – 3.7%
Repsol SA		4,150		65,197
Royal Dutch Shell PLC – Class B		4,053		120,308
TOTAL SA		750		41,618

				227,123

Utilities – 2.7%
Electric Utilities – 2.2%
EDP – Energias de Portugal SA		11,282		48,957
Enel SpA		10,910		86,667

				135,624

Gas Utilities – 0.5%
Tokyo Gas Co., Ltd.		1,200		29,159

				164,783

Materials – 1.0%
Chemicals – 0.6%
Covestro AG^(a)		749		34,851


Metals & Mining – 0.4%
Evolution Mining Ltd.		9,760		25,946

				60,797

Total Common Stocks (cost $5,291,840)				5,987,131


SHORT-TERM INVESTMENTS – 1.9%
Investment Companies – 1.9%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(c)(d)(e) (cost $114,186)		114,186		114,186


Total Investments – 100.2% (cost $5,406,026)				6,101,317
Other assets less liabilities – (0.2)%				(12,303	)


Net Assets – 100.0%			$	6,089,014



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PORTFOLIO OF INVESTMENTS (continued)

FUTURES


Description	Number of Contracts		Expiration Month		Current Notional		Value and Unrealized Appreciation/ (Depreciation)
Purchased Contracts
MSCI EAFE Futures		1		March 2020	$	101,825	$	(8	)

FORWARD CURRENCY EXCHANGE CONTRACTS


Counterparty	Contracts to Deliver (000)		In Exchange For (000)		Settlement Date		Unrealized Appreciation/ (Depreciation)
Brown Brothers Harriman & Co.	CHF	12	USD	12		3/13/20	$	(50	)
Brown Brothers Harriman & Co.	CAD	499	USD	379		3/16/20		(5,717	)
Brown Brothers Harriman & Co.	CHF	28	USD	29		3/16/20		(437	)
Brown Brothers Harriman & Co.	EUR	22	USD	25		3/16/20		28
Brown Brothers Harriman & Co.	EUR	42	USD	47		3/16/20		(249	)
Brown Brothers Harriman & Co.	GBP	29	USD	38		3/16/20		(406	)
Brown Brothers Harriman & Co.	HKD	444	USD	57		3/16/20		(7	)
Brown Brothers Harriman & Co.	ILS	911	USD	263		3/16/20		(1,691	)
Brown Brothers Harriman & Co.	JPY	9,455	USD	87		3/16/20		(608	)
Brown Brothers Harriman & Co.	NOK	512	USD	56		3/16/20		(1,999	)
Brown Brothers Harriman & Co.	SGD	219	USD	161		3/16/20		(1,361	)
Brown Brothers Harriman & Co.	USD	106	AUD	154		3/16/20		1,837
Brown Brothers Harriman & Co.	USD	31	CAD	40		3/16/20		299
Brown Brothers Harriman & Co.	USD	441	EUR	394		3/16/20		2,841
Brown Brothers Harriman & Co.	USD	38	GBP	29		3/16/20		210
Brown Brothers Harriman & Co.	USD	57	HKD	444		3/16/20		258
Brown Brothers Harriman & Co.	USD	18	ILS	63		3/16/20		206
Brown Brothers Harriman & Co.	USD	345	JPY	37,397		3/16/20		134
Brown Brothers Harriman & Co.	USD	149	SEK	1,391		3/16/20		(29	)
Citibank, NA	KRW	35,013	USD	30		2/06/20		(371	)
Standard Chartered Bank	KRW	10,358	USD	9		2/06/20		(95	)

							$	(7,207	)

(a)

(b)	Non-income producing security.

(c)	Affiliated investments.

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

(e)	The rate shown represents the 7-day yield as of period end.

Currency Abbreviations:

AUD – Australian Dollar

CAD – Canadian Dollar

CHF – Swiss Franc

EUR – Euro

GBP – Great British Pound

HKD – Hong Kong Dollar

ILS – Israeli Shekel

JPY – Japanese Yen

KRW – South Korean Won

NOK – Norwegian Krone

SEK – Swedish Krona

SGD – Singapore Dollar

USD – United States Dollar



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PORTFOLIO OF INVESTMENTS (continued)

Glossary:

EAFE – Europe, Australia, and Far East

GDR – Global Depositary Receipt

MSCI – Morgan Stanley Capital International

REG – Registered Shares

REIT – Real Estate Investment Trust

See notes to financial statements.



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STATEMENT OF ASSETS & LIABILITIES

December 31, 2019


Assets
Investments in securities, at value Unaffiliated issuers (cost $5,291,840)	$	5,987,131
Affiliated issuers (cost $114,186)		114,186
Cash		603
Cash collateral due from broker		4,950
Foreign currencies, at value (cost $14,550)		14,731
Receivable from Adviser		196,344
Unaffiliated dividends receivable		13,963
Receivable for investment securities sold		7,385
Unrealized appreciation on forward currency exchange contracts		5,813
Affiliated dividends receivable		189

Total assets		6,345,295

Liabilities
Dividends payable		107,789
Audit and tax fee payable		62,570
Payable for investment securities purchased and foreign currency transactions		23,403
Custody fee payable		20,027
Unrealized depreciation on forward currency exchange contracts		13,020
Transfer Agent fee payable		1,500
Payable for variation margin on futures		95
Accrued expenses and other liabilities		27,877

Total liabilities		256,281

Net Assets	$	6,089,014

Composition of Net Assets
Capital stock, at par	$	55
Additional paid-in capital		5,591,660
Distributable earnings		497,299

	$	6,089,014

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

Advisor	$	6,089,014		554,210	$	10.99

See notes to financial statements.



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STATEMENT OF OPERATIONS

Year Ended December 31, 2019


Investment Income
Dividends
Unaffiliated issuers (net of foreign taxes withheld of $17,216)	$	164,860
Affiliated issuers		2,384
Securities lending income		239		$	167,483

Expenses
Advisory fee (see Note B)		2,671
Transfer agency-Advisor Class		19,814
Custodian		80,882
Audit and tax		65,802
Administrative		71,558
Legal		31,541
Registration fees		23,539
Directors’ fees		22,927
Printing		12,423
Miscellaneous		47,750

Total expenses		378,907
Less: expenses waived and reimbursed by the Adviser (see Note B and Note D)		(371,002	)

Net expenses					7,905

Net investment income					159,578

Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions
Net realized loss on:
Investment transactions					(126,890	)
Forward currency exchange contracts					(37,340	)
Foreign currency transactions					(2,846	)
Net change in unrealized appreciation/depreciation on:
Investments					835,548
Forward currency exchange contracts					(18,372	)
Futures					(8	)
Foreign currency denominated assets and liabilities					285

Net gain on investment and foreign currency transactions					650,377

Net Increase in Net Assets from Operations				$	809,955

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31, 2019			Year Ended December 31, 2018
Increase (Decrease) in Net Assets from Operations
Net investment income	$	159,578		$	48,175
Net realized loss on investment and foreign currency transactions		(167,076	)		(2,248	)
Net change in unrealized appreciation/depreciation on investments and foreign currency denominated assets and liabilities		817,453			(337,363	)

Net increase (decrease) in net assets from operations		809,955			(291,436	)
Distributions to Shareholders
Advisor Class		(163,480	)		(71,640	)
Capital Stock Transactions
Net increase		2,525,146			71,645

Total increase (decrease)		3,171,621			(291,431	)
Net Assets
Beginning of period		2,917,393			3,208,824

End of period	$	6,089,014		$	2,917,393

See notes to financial statements.



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NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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 comprised of 28 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB FlexFee International Strategic Core Portfolio (the “Fund”), a diversified portfolio. The Fund commenced operations on June 28, 2017. The Fund has authorized issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares. Class A, Class B, Class C, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares have not been issued. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven 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



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NOTES TO FINANCIAL STATEMENTS (continued)

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, AllianceBernstein L.P. (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.



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NOTES TO FINANCIAL STATEMENTS (continued)

this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

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)



24 ^\| AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2019:

Investments in

Securities

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks:

Financials

159,841

1,319,621

– 0

–

1,479,462

Industrials

27,824

853,053

– 0

–

880,877

Information Technology

217,241

550,754

– 0

–

767,995

Consumer Staples

80,070

544,162

– 0

–

624,232

Consumer Discretionary

82,567

489,954

– 0

–

572,521

Health Care

– 0

–

566,675

– 0

–

566,675

Communication Services

80,055

294,395

– 0

–

374,450

Real Estate

– 0

–

268,216

– 0

–

268,216

Energy

– 0

–

227,123

– 0

–

227,123

Utilities

– 0

–

164,783

– 0

–

164,783

Materials

– 0

–

60,797

– 0

–

60,797

Short-Term Investments:

Investment Companies

114,186

– 0

–

– 0

–

114,186

Total Investments in Securities

761,784

5,339,533

^{^}

– 0

–

6,101,317

Other Financial Instruments*:

Assets

Forward Currency Exchange Contracts

– 0

–

5,813

– 0

–

5,813

Liabilities

Futures

)

– 0

–

– 0

–

)^†

Forward Currency Exchange Contracts

– 0

–

(13,020

)

– 0

–

(13,020

)

Total

761,776

5,332,326

– 0

–

6,094,102

^	A significant portion of the Fund’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 A.1.

†

Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) of futures and centrally cleared swaps as reported in the portfolio of investments. Where applicable, centrally cleared swaps with upfront premiums are presented here at market value.



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NOTES TO FINANCIAL STATEMENTS (continued)

3. Currency Translation

4. Taxes

5. Investment Income and Investment Transactions



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NOTES TO FINANCIAL STATEMENTS (continued)

6. Expense Allocations

Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods.

7. Dividends and Distributions

8. Offering Expenses

Offering expenses of $68,085 were deferred and amortized on a straight line basis over a one year period starting from June 28, 2017 (commencement of operations).

NOTE B

Advisory Fee and Other Transactions with Affiliates



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NOTES TO FINANCIAL STATEMENTS (continued)

amount of any minimum fees paid during the Performance Period and any waivers described below. The period over which performance is measured (“Performance Period”) was initially from the commencement of operations to December 31, 2018 and thereafter is each 12-month period beginning on the first day in the month of January through December 31 of the same year. In addition, the Adviser has agreed to waive its advisory fee by limiting the Fund’s accrual of the advisory fee (Base Fee plus Performance Adjustment) on any day to the amount corresponding to the maximum fee rate multiplied by the Fund’s current net assets if such amount is less than the amount that would have been accrued based on the Fund’s average daily net assets for the Performance Period. For the year ended December 31, 2019, the Fund accrued advisory fees of $2,671, as reflected in the statement of operations, at an annual effective rate (excluding the impact from any expense waivers in effect) of .05% of the Fund’s average net assets, which reflected a (.50%) Performance Adjustment of $(26,712).

The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit total expenses (other than the advisory fee, 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 from exceeding .10% of average daily net assets (the “Expense Cap”). For the year ended December 31, 2019, such reimbursements/waivers amounted to $299,334. The Expense Cap will remain in effect until April 30, 2020 and then may be continued thereafter from year to year by the Adviser. Any fees waived and expenses borne by the Adviser through December 31, 2018 are subject to repayment 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; such waivers that are subject to repayment amount to $194,120 for the period ended December 31, 2017 and $310,438 for the year ended December 31, 2018. In any case, no repayment will be made that would cause the Fund’s total annual expenses (subject to the exclusions set forth above) to exceed .10% of average daily net assets.



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NOTES TO FINANCIAL STATEMENTS (continued)

account services, sub-accounting services and/or networking services. The compensation retained by ABIS amounted to $18,000 for the year ended December 31, 2019.

A summary of the Fund’s transactions in AB mutual funds for the year ended December 31, 2019 is as follows:


Fund	Market Value 12/31/18 (000)			Purchases at Cost (000)		Sales Proceeds (000)		Market Value 12/31/19 (000)			Dividend Income (000)
Government Money Market Portfolio	$	26		$	3,143	$	3,055	$	114		$	2
Government Money Market Portfolio^*		– 0	–		311		311		– 0	–		0	**

Total								$	114		$	2

*	Investment of cash collateral for securities lending transactions (see Note D).

**	Amount is less than $500.



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NOTES TO FINANCIAL STATEMENTS (continued)

over time, subject to market conditions and other factors (the “Plan”). Most of AXA’s remaining Equitable shares are to be delivered on redemption of AXA bonds mandatorily exchangeable into Equitable shares and maturing in May 2021. AXA retains sole discretion to determine the timing of any future sales of its remaining shares of Equitable common stock.

NOTE C

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended December 31, 2019, were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	4,503,356		$	2,133,104
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	$	5,442,694

Gross unrealized appreciation	$	776,053
Gross unrealized depreciation		(118,542	)

Net unrealized appreciation	$	657,511

1. Derivative Financial Instruments



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NOTES TO FINANCIAL STATEMENTS (continued)

The principal types of derivatives utilized by the Fund, as well as the methods in which they may be used are:

•

Forward Currency Exchange Contracts

The Fund may enter into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to hedge certain firm purchase and sale commitments denominated in foreign currencies and for non-hedging purposes as a means of making direct investments in foreign currencies, as described below under “Currency Transactions”.

A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contract and the closing of such contract would be included in net realized gain or loss on forward currency exchange contracts. Fluctuations in the value of open forward currency exchange contracts are recorded for financial reporting purposes as unrealized appreciation and/or depreciation by the Fund. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

During the year ended December 31, 2019, the Fund held forward currency exchange contracts for hedging purposes.

•

Futures

The Fund may buy or sell futures for investment purposes or for the purpose of hedging its portfolio against adverse effects of potential movements in the market. The Fund bears the market risk that arises from changes in the value of these instruments and the imperfect correlation between movements in the price of the futures and movements in the price of the assets, reference rates or indices which they are designed to track. Among other things, the Fund may purchase or sell futures for foreign currencies or options thereon for non-hedging purposes as a means of making direct investment in foreign currencies, as described below under “Currency Transactions”.



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NOTES TO FINANCIAL STATEMENTS (continued)

of a counterparty to meet the terms of the contract. The credit/ counterparty risk for exchange-traded futures is generally less than privately negotiated futures, since the clearinghouse, which is the issuer or counterparty to each exchange-traded future, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.

During the year ended December 31, 2019, the Fund held futures for non-hedging purposes.

The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreement”) with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to OTC counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the OTC counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default or termination. In the event of a default by an OTC counterparty, the return of collateral with market value in excess of the Fund’s net liability, held by the defaulting party, may be delayed or denied.

The Fund’s ISDA Master Agreements may contain provisions for early termination of OTC derivative transactions in the event the net assets of the Fund decline below specific levels (“net asset contingent features”). If these levels are triggered, the Fund’s OTC counterparty has the right to terminate such transaction and require the Fund to pay or receive a settlement amount in connection with the terminated transaction. If OTC derivatives were held at period end, please refer to netting arrangements by the OTC counterparty tables below for additional details.



32 ^\| AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2019, the Fund had entered into the following derivatives:

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Foreign currency
contracts

Unrealized appreciation on forward currency exchange contracts

5,813

Unrealized depreciation on forward currency exchange contracts

13,020

Equity contracts

Receivable/Payable for variation margin on futures

Total

5,813

13,028

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Foreign currency contracts	Net realized gain/(loss) on forward currency exchange contracts; Net change in unrealized appreciation/depreciation on forward currency exchange contracts	$	(37,340	)	$	(18,372	)
Equity contracts	Net realized gain/(loss) on futures; Net change in unrealized appreciation/ depreciation on futures		– 0	–		(8	)

Total		$	(37,340	)	$	(18,380	)

The following table represents the average monthly volume of the Fund’s derivative transactions during the year ended December 31, 2019:


Forward Currency Exchange Contracts:
Average principal amount of buy contracts	$	1,277,780
Average principal amount of sale contracts	$	1,168,969
Futures:
Average notional amount of buy contracts	$	101,833	^(a)

(a)	Positions were open for one month during the period.



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NOTES TO FINANCIAL STATEMENTS (continued)

For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the statement of assets and liabilities.

All OTC derivatives held at period end were subject to netting arrangements. The following table presents the Fund’s derivative assets and liabilities by OTC counterparty net of amounts available for offset under ISDA Master Agreements (“MA”) and net of the related collateral received/pledged by the Fund as of December 31, 2019. Exchange-traded derivatives and centrally cleared swaps are not subject to netting arrangements and as such are excluded from the tables.


Counterparty	Derivative Assets Subject to a MA		Derivatives Available for Offset			Cash Collateral Received*			Security Collateral Received*			Net Amount of Derivative Assets
Brown Brothers Harriman & Co.	$	5,813	$	(5,813	)	$	– 0	–	$	– 0	–	$	– 0	–

Total	$	5,813	$	(5,813	)	$	– 0	–	$	– 0	–	$	0	^


Counterparty	Derivative Liabilities Subject to a MA		Derivatives Available for Offset			Cash Collateral Pledged*			Security Collateral Pledged*			Net Amount of Derivative Liabilities
Brown Brothers Harriman & Co.	$	12,554	$	(5,813	)	$	– 0	–	$	– 0	–	$	6,741
Citibank, NA		371		– 0	–		– 0	–		– 0	–		371
Standard Chartered Bank		95		– 0	–		– 0	–		– 0	–		95

Total	$	13,020	$	(5,813	)	$	– 0	–	$	– 0	–	$	7,207	^

*	The actual collateral received/pledged may be more than the amount reported due to overcollateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.

2. Currency Transactions



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NOTES TO FINANCIAL STATEMENTS (continued)

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 D

Securities Lending

The Fund may enter into securities lending transactions. Under the Fund’s securities lending program, all loans of securities will be collateralized continually by cash collateral and/or non-cash collateral. Non-cash collateral will include only securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. The Fund cannot sell or repledge any non-cash collateral, such collateral will not be reflected in the portfolio of investments. If a loan is collateralized by cash, the Fund will be compensated for the loan from a portion of the net return from the income earned on cash collateral after a rebate is paid to the borrower (in some cases, this rebate may be a “negative rebate” or fee paid by the borrower to the Fund in connection with the loan), and payments are made for fees of the securities lending agent and for certain other administrative expenses. If the Fund receives non-cash collateral, the Fund will receive a fee from the borrower generally equal to a negotiated percentage of the market value of the loaned securities. The Fund will have the right to call a loan and obtain the securities loaned at any time on notice to the borrower within the normal and customary settlement time for the securities. While the securities are on loan, the borrower is obligated to pay the Fund amounts equal to any income or other distributions from the securities. The Fund will not be able to exercise voting rights with respect to any securities during the existence of a loan, but will have the right to regain ownership of loaned securities in order to exercise voting or other ownership rights. Collateral received and securities loaned are marked to market daily to ensure that the securities loaned are secured by collateral. The lending agent currently invests the cash collateral received in Government Money Market Portfolio, an eligible money market vehicle, in accordance with the investment restrictions of the Fund, and as approved by the Board. The collateral received on securities loaned is recorded as an asset as well as a corresponding liability in the statement of assets and liabilities. The collateral will be adjusted the next business day to maintain the required collateral amount. The amounts of securities lending income from the borrowers and Government Money Market Portfolio are reflected in the statement of operations. When the Fund earns net securities lending income from Government Money Market Portfolio, the income is inclusive of a rebate expense paid to the borrower. In connection with the cash collateral investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive a portion of the Fund’s share of the advisory fees of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. A principal



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NOTES TO FINANCIAL STATEMENTS (continued)

risk of lending portfolio securities is that the borrower may fail to return the loaned securities upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for the year ended December 31, 2019 is as follows:


									Government Money Market Portfolio
Market Value of Securities on Loan*	Cash Collateral*			Market Value of Non-Cash Collateral*			Income from Borrowers		Income Earned		Advisory Fee Waived
$ – 0 –	$	– 0	–	$	– 0	–	$	239	$	68	$	3

*	As of December 31, 2019.

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 December 31, 2019		Year Ended December 31, 2018		Year Ended December 31, 2019		Year Ended December 31, 2018

Advisor Class
Shares sold		241,593		1	$	2,469,456	$	5

Shares issued in reinvestment of dividends		5,067		7,549		55,690		71,640

Net increase		246,660		7,550	$	2,525,146	$	71,645

At December 31, 2019, the Adviser owned 55% of the Fund’s outstanding shares. Significant transactions by such shareholder, if any, may impact the Fund’s performance.

NOTE F

Risks Involved in Investing in the Fund

Foreign (Non-U.S.) Risk—Investments 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 more difficult to trade or dispose of 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.



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NOTES TO FINANCIAL STATEMENTS (continued)

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

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.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE G

Joint Credit Facility

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended December 31, 2019 and December 31, 2018 were as follows:


	2019			2018
Distributions paid from:
Ordinary income	$	163,480		$	69,816
Long-term capital gains		– 0	–		1,824

Total taxable distributions paid	$	163,480		$	71,640

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Accumulated capital losses	$	(145,616	)^(a)
Other losses		(14,797	)^(b)
Unrealized appreciation/(depreciation)		657,767	^(c)

Total accumulated earnings/(deficit)	$	497,354	^(d)

(a)	As of December 31, 2019, the Fund had a net capital loss carryforward of $145,616.

(b)	As of December 31, 2019, the fund had a qualified late-year ordinary loss deferral of $14,797.

(c)

The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the recognition for tax purposes of unrealized gains/losses on certain derivative instruments, the tax treatment of passive foreign investment companies (PFICs), the tax deferral of losses on wash sales, and the tax treatment of partnership investments.

(d)	The difference between book-basis and tax-basis components of accumulated earnings/(deficit) are attributable primarily to dividends payable.

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital



38 ^\| AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of December 31, 2019, the Fund had a net short-term capital loss carryforward of $78,469 and a net long-term capital loss carryforward of $67,147, which may be carried forward for an indefinite period.

During the current fiscal year, there were no permanent differences that resulted in adjustments to distributable earnings or additional paid-in capital.

NOTE I

Recent Accounting Pronouncements

NOTE J

Subsequent Events



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 39

FINANCIAL HIGHLIGHTS

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


	Advisor Class
	Year Ended December 31,						June 28, 2017^(a) to December 31, 2017
	2019			2018			June 28, 2017^(a) to December 31, 2017


Net asset value, beginning of period		$ 9.49			$ 10.70			$ 10.00

Income From Investment Operations

Net investment income^(b)(c)		.32			.16			.09

Net realized and unrealized gain (loss) on investment and foreign currency transactions		1.48			(1.13	)		.70


Net increase (decrease) in net asset value from operations		1.80			(.97	)		.79

Less: Dividends and Distributions

Dividends from net investment income		(.30	)		(.14	)		(.08	)

Distributions from net realized gain on investment and foreign currency transactions		– 0	–		(.10	)		(.01	)


Total dividends and distributions		(.30	)		(.24	)		(.09	)

Net asset value, end of period		$ 10.99			$ 9.49			$ 10.70

Total Return

Total investment return based on net asset value^(d)		18.94	%		(9.08	)%		7.86	%
Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$6,089			$2,917			$3,209

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^†		.15	%		1.49	%^(f)		.15	%^(e)

Expenses, before waivers/reimbursements^†		7.09	%		13.45	%^(f)		14.14	%^(e)

Net investment income^(c)		2.99	%		1.49	%		1.70	%^(e)

Portfolio turnover rate		41	%		80	%		29	%


^† Expense ratios exclude the acquired fund fees of affiliated/ unaffiliated underlying
portfolios		.00	%		.01	%		.01	%^(e)

(a)	Commencement of operations.

(b)	Based on average shares outstanding.

(c)	Net of 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. Total investment 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 for a period of less than one year is not annualized.

(e)	Annualized.

(f)	The advisory fee reflected in the Fund’s expense ratio may be higher or lower than the Base Fee plus Performance Adjustment due to the different time periods over which the fee is calculated (i.e., the financial reporting period vs. the Performance Period).

See notes to financial statements.



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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

AB FlexFee International Strategic Core Portfolio:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB FlexFee International Strategic Core Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of December 31, 2019, 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, the financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting AB Cap Fund, Inc.) at December 31, 2019, 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 its financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 41

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

February 26, 2020



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2019 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund for the calendar year ended December 31, 2019. For corporate shareholders, 2.50% of dividends paid qualify for the dividends received deduction.

For individual shareholders, the Fund designates 93.31% of dividends paid as qualified dividend income.

The Fund intends to make an election to pass through foreign taxes to its shareholders. For the taxable year ended December 31, 2019, $13,656 of foreign taxes may be passed through and the associated foreign source income for information reporting purposes is $161,217.



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 43

BOARD OF DIRECTORS


Marshall C. Turner, Jr⁽¹⁾, Chairman Jorge A. Bermudez* Michael J. Downey⁽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

Kent W. Hargis⁽²⁾, Vice President

Sammy Suzuki⁽²⁾, Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Vincent S. Noto, Chief Compliance Officer


Custodian and Accounting Agent Brown Brothers Harriman & Co. 50 Post Office Square Boston, MA 02110 Principal Underwriter AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105 Transfer Agent AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-Free (800) 221-6003		Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036 Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004

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 is made by the Adviser’s Strategic Core Investment Team. Messrs. Hargis and Suzuki are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

*	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee when he joins the Board on January 1, 2020.



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MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS 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 59 (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.		91	None



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 45

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2015)	Private Investor since prior to 2015. 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 all AB funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		91	Xilinx, Inc. (programmable logic semi-conductors) since 2007



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MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Jorge A. Bermudez,^ 68 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas,		91	Moody’s Corporation since April 2011
	Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since 2020.


Michael J. Downey,^## 76 (2015)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. 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.		91	None



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 47

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Nancy P. Jacklin,^## 71 (2015)	Private Investor since prior to 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 Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		91	None



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MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		91	None



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 49

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Garry L. Moody,^## 67 (2015)	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 is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council Governing Council. He has served as a director or trustee and as Chairman of the Audit Committees of the AB Funds since 2008.		91	None



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MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUNDS COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Earl D. Weiner,^## 80 (2015)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He 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.		91	None

*	The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department—Mutual Fund Legal, 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.

^	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and Independent Directors Committee when he joins the Board on January 1, 2020.



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MANAGEMENT OF THE FUND (continued)

Officer Information


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST 5 YEARS
Robert M. Keith 59	President and Chief Executive Officer	See biography above.

Kent W. Hargis 51	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015; Co-Chief Investment Officer – Strategic Core Equities.

Sammy Suzuki 49	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015; Co-Chief Investment Officer – Strategic Core Equities.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 60	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of ABIS**, with which she has been associated since prior to 2015.

Vince S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	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.



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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 FlexFee^TM International Strategic Core Portfolio (the “Fund”) at a meeting held on May 7-9, 2019 (the “Meeting”).



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 53

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 performance-based 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 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



54 ^\| AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO		abfunds.com

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 periods reviewed. The directors noted that, due to the performance fee component of the advisory fee, profitability would tend to be higher with better performance relative to the Fund’s benchmark index, which they considered to create an appropriate alignment of incentives.

Fall-Out Benefits

Investment Results

Advisory Fees and Other Expenses



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 55

The directors also considered the Adviser’s fee schedule for other clients pursuing an investment strategy similar to the Fund’s. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule and the schedule of fees charged by the Adviser to any offshore funds and for services to any sub-advised funds pursuing an investment strategy similar to the Fund’s, 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 directors previously discussed these matters with an independent fee consultant. The directors also compared the advisory fee rate for the Fund with those for two other funds advised by the Adviser with a similar investment strategy.

The directors noted that the Fund invests 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, and that the Adviser had provided, and they had reviewed information about the expense ratios of the relevant ETFs. The directors concluded, based on the Adviser’s explanation of how it uses ETFs when they are the most cost-effective way to obtain desired exposures, in some cases pending purchases of underlying securities, that the advisory fee for the Fund is for services in addition to, rather than duplicative of, the services provided under the advisory contracts of the ETFs.



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Economies of Scale



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 57

This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

INTERNATIONAL/ GLOBAL EQUITY (continued)

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio¹

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

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

Multi-Manager Select 2060 Fund

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

1	Prior to July 12, 2019, Total Return Bond Portfolio was named Intermediate Bond Portfolio; prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



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NOTES



abfunds.com		AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO ^\| 59

NOTES



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LOGO

AB FLEXFEE INTERNATIONAL STRATEGIC CORE PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

FFISCP-0151-1219 LOGO

DEC^12.31.19

LOGO

ANNUAL REPORT

AB FLEXFEE^TM LARGE CAP GROWTH PORTFOLIO

LOGO



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.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB FlexFee Large Cap Growth Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

⁺

Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 1

ANNUAL REPORT

February 12, 2020

This report provides management’s discussion of fund performance for AB FlexFee Large Cap Growth Portfolio for the annual reporting period ended December 31, 2019.

The Fund’s investment objective is long-term growth of capital.

NAV RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	6 Months		12 Months

AB FLEXFEE LARGE CAP GROWTH PORTFOLIO

Advisor Class Shares		11.38%		35.01%

Russell 1000 Growth Index		12.27%		36.39%

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Russell 1000 Growth Index, for the six- and 12-month periods ended December 31, 2019.

The Fund underperformed the benchmark for both periods. The Fund’s performance-based advisory fee was accrued at its minimum rate for the performance period from January 1, 2019 through December 31, 2019. During the 12-month period, an underweight to technology and an overweight to health care detracted, relative to the benchmark, while underweights to industrials and energy contributed. Stock selection within the technology sector detracted, while selection in health care contributed.

For the six-month period, an underweight to technology and an overweight to communication services detracted, while underweights to industrials and health care contributed. Stock selection within health care and communication services contributed, while selection in technology and consumer staples detracted.

The Fund did not utilize derivatives during either period.

MARKET REVIEW AND INVESTMENT STRATEGY



2 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

geopolitical pressures drove market volatility. Tariff wars, restrictive monetary policy and a decline in industrial production stoked recessionary fears throughout the global economy. In response, the world’s central banks implemented accommodative monetary policies to help support capital markets. Late in the third quarter, equity market performance was accompanied by a sharp style rotation in the US. Quality-growth and lower-volatility stocks, which had been strong performers, lagged, and value stocks outperformed. However, for the most part, growth stocks outperformed value over the entire period. From a market-capitalization perspective, large-cap stocks outperformed their small-cap peers. In December, equity markets rallied on news that the US and China had agreed to a preliminary phase-one trade deal due to be signed in January 2020.

The Fund’s Senior Investment Management Team (the “Team”) believes that over time, fundamentals and earnings growth can be the most significant catalysts for stock performance, which heightens the importance of active stock selection. The Team selects companies that exhibit attractive growth potential, high or improving return on capital and competitive advantages against their peers. The Team believes that this philosophy can deliver strong investment returns over time.

INVESTMENT POLICIES

The Fund invests primarily in equity securities of a limited number of large, carefully selected, high-quality US companies. The Fund invests primarily in the domestic equity securities of companies selected by the Fund’s Adviser for their growth potential within various market sectors. The Fund emphasizes investments in large, seasoned companies. Under normal circumstances, the Fund will invest at least 80% of its net assets in common stocks of large-capitalization companies.

The Adviser expects that normally the Fund’s portfolio will tend to emphasize investments in securities issued by US companies, although it may invest in foreign securities.

The investment team allocates the Fund’s investments among broad sector groups based on the fundamental company research conducted by the Adviser’s internal research staff, assessing the current and forecasted investment opportunities and conditions, as well as diversification and risk considerations. The investment team may vary the percentage allocations among market sectors and may change the market sectors in which the Fund invests as companies’ potential for growth within a sector matures and new trends for growth emerge.

The Adviser’s research focus is in companies with high sustainable growth prospects, high or improving return on invested capital, transparent business models, and strong and lasting competitive advantages.

(continued on next page)



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The Fund may enter into derivatives transactions, such as options, futures contracts, forwards and swaps. The Fund may use options strategies involving the purchase and/or writing of various combinations of call and/or put options, including on individual securities and stock indices, futures contracts (including futures contracts on individual securities and stock indices) or shares of exchange-traded funds. These transactions may be used, for example, in an effort to earn extra income, to adjust exposure to individual securities or markets, or to protect all or a portion of the Fund’s portfolio from a decline in value, sometimes within certain ranges.



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DISCLOSURES AND RISKS

Benchmark Disclosure

The Russell 1000^® Growth Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Russell 1000 Growth Index represents the performance of large-cap growth companies within the US. 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

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. Net asset value (“NAV”) returns do not reflect sales



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 5

DISCLOSURES AND RISKS (continued)

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. 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.



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HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

6/28/2017¹ TO 12/31/2019

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB FlexFee Large Cap Growth Portfolio Advisor Class shares (from 6/28/2017¹ to 12/31/2019) as compared to the performance of the Fund’s benchmark.

1	Inception date: 6/28/2017.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 7

HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES¹

1 Year		35.01%		35.01%

Since Inception²		19.39%		19.39%

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2019 (unaudited)



	SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES

1 Year		35.01%

Since Inception²		19.39%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 1.61% for Advisor Class shares, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratio exclusive of the Fund’s advisory fees, 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 0.05% for Advisor Class shares. These waivers/reimbursements may not be terminated before April 30, 2020. Any fees waived, and expenses borne by the Adviser through December 31, 2018 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 operating expenses to exceed these 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 ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

1	This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns.

2	Inception date: 6/28/2017.



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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 7/1/2019		Ending Account Value 12/31/2019		Expenses Paid During Period*		Annualized Expense Ratio*			Total Expenses Paid During Period+		Total Annualized Expense Ratio+
Advisor Class
Actual	$	1,000	$	1,113.80	$	0.48		0.09	%	$	0.53		0.10	%
Hypothetical**	$	1,000	$	1,024.75	$	0.46		0.09	%	$	0.51		0.10	%



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 9

EXPENSE EXAMPLE (continued)

*	Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



10 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

PORTFOLIO SUMMARY

December 31, 2019 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $277.3

LOGO

TEN LARGEST HOLDINGS²



Company	U.S. $ Value		Percent of Net Assets

Alphabet, Inc. – Class C	$	20,762,584		7.5	%

Microsoft Corp.		18,484,963		6.7

UnitedHealth Group, Inc.		14,855,691		5.4

Facebook, Inc. – Class A		14,018,780		5.0

Visa, Inc. – Class A		13,217,262		4.8

Zoetis, Inc.		10,140,657		3.6

Vertex Pharmaceuticals, Inc.		10,099,726		3.6

Monster Beverage Corp.		10,056,851		3.6

Intuitive Surgical, Inc.		8,581,725		3.1

NIKE, Inc. – Class B		8,200,538		3.0

	$	128,418,777		46.3	%

1	All data are as of December 31, 2019. The Fund’s sector breakdown is expressed as a percentage of total investments and may vary over time.

2	Long-term investments.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 11

PORTFOLIO OF INVESTMENTS

December 31, 2019


Company	Shares		U.S. $ Value

COMMON STOCKS – 90.4%
Health Care – 24.5%
Biotechnology – 5.5%
Regeneron Pharmaceuticals, Inc.^(a)		13,772	$	5,171,110
Vertex Pharmaceuticals, Inc.^(a)		46,128		10,099,726

				15,270,836

Health Care Equipment & Supplies – 7.5%
ABIOMED, Inc.^(a)		8,028		1,369,496
Align Technology, Inc.^(a)		7,820		2,182,093
Edwards Lifesciences Corp.^(a)		23,017		5,369,636
Intuitive Surgical, Inc.^(a)		14,517		8,581,725
Stryker Corp.		15,633		3,281,992

				20,784,942

Health Care Providers & Services – 5.4%
UnitedHealth Group, Inc.		50,533		14,855,691


Health Care Technology – 0.2%
Veeva Systems, Inc. – Class A^(a)		3,579		503,422


Life Sciences Tools & Services – 2.3%
Illumina, Inc.^(a)		15,944		5,289,263
Mettler-Toledo International, Inc.^(a)		1,350		1,070,928

				6,360,191

Pharmaceuticals – 3.6%
Zoetis, Inc.		76,620		10,140,657

				67,915,739

Information Technology – 23.4%
Communications Equipment – 0.9%
Arista Networks, Inc.^(a)		12,020		2,444,868


Electronic Equipment, Instruments & Components – 1.1%
Amphenol Corp. – Class A		9,602		1,039,225
Cognex Corp.		17,333		971,341
IPG Photonics Corp.^(a)		7,214		1,045,453

				3,056,019

IT Services – 8.0%
Euronet Worldwide, Inc.^(a)		6,671		1,051,083
PayPal Holdings, Inc.^(a)		72,502		7,842,541
Visa, Inc. – Class A		70,342		13,217,262

				22,110,886

Semiconductors & Semiconductor Equipment – 2.9%
ASML Holding NV (ADR)		3,580		1,059,465
QUALCOMM, Inc.		24,469		2,158,900
Texas Instruments, Inc.		9,485		1,216,830
Xilinx, Inc.		38,558		3,769,816

				8,205,011



12 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Software – 9.7%
Adobe, Inc.^(a)		14,214	$	4,687,919
ANSYS, Inc.^(a)		581		149,555
Microsoft Corp.		117,216		18,484,963
Paycom Software, Inc.^(a)		4,582		1,213,130
Slack Technologies, Inc. – Class A^(a)		54,497		1,225,093
Tyler Technologies, Inc.^(a)		3,880		1,164,078

				26,924,738

Technology Hardware, Storage & Peripherals – 0.8%
Apple, Inc.		7,734		2,271,089

				65,012,611

Communication Services – 14.6%
Entertainment – 2.0%
Electronic Arts, Inc.^(a)		52,576		5,652,446


Interactive Media & Services – 12.6%
Alphabet, Inc. – Class C^(a)		15,529		20,762,584
Facebook, Inc. – Class A^(a)		68,301		14,018,780

				34,781,364

				40,433,810

Consumer Discretionary – 13.0%
Hotels, Restaurants & Leisure – 0.4%
Domino’s Pizza, Inc.		3,577		1,050,851


Internet & Direct Marketing Retail – 2.0%
Booking Holdings, Inc.^(a)		2,636		5,413,632
Etsy, Inc.^(a)		3,211		142,248

				5,555,880

Specialty Retail – 7.7%
Burlington Stores, Inc.^(a)		19,168		4,370,879
Five Below, Inc.^(a)		15,285		1,954,340
Home Depot, Inc. (The)		36,303		7,927,849
TJX Cos., Inc. (The)		63,577		3,882,012
Ulta Salon Cosmetics & Fragrance, Inc.^(a)		12,452		3,152,099

				21,287,179

Textiles, Apparel & Luxury Goods – 2.9%
NIKE, Inc. – Class B		80,945		8,200,538

				36,094,448

Consumer Staples – 6.4%
Beverages – 4.0%
Constellation Brands, Inc. – Class A		5,061		960,325
Monster Beverage Corp.^(a)		158,251		10,056,851

				11,017,176


Food & Staples Retailing – 2.4%
Costco Wholesale Corp.		22,495		6,611,730

				17,628,906



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 13

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Industrials – 6.1%
Building Products – 1.9%
Allegion PLC		35,194	$	4,383,061
AO Smith Corp.		18,553		883,865

				5,266,926

Commercial Services & Supplies – 1.2%
Copart, Inc.^(a)		36,274		3,298,758


Electrical Equipment – 0.7%
AMETEK, Inc.		19,625		1,957,397


Industrial Conglomerates – 1.8%
Roper Technologies, Inc.		13,669		4,841,970


Machinery – 0.5%
IDEX Corp.		8,519		1,465,268

				16,830,319

Materials – 1.9%
Chemicals – 1.9%
Sherwin-Williams Co. (The)		9,273		5,411,166


Financials – 0.5%
Capital Markets – 0.5%
S&P Global, Inc.		4,874		1,330,846


Total Common Stocks (cost $199,277,631)				250,657,845


SHORT-TERM INVESTMENTS – 9.9%
Investment Companies – 9.9%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(b)(c)(d) (cost $27,442,867)		27,442,867		27,442,867


Total Investments – 100.3% (cost $226,720,498)				278,100,712
Other assets less liabilities – (0.3)%				(796,693	)


Net Assets – 100.0%			$	277,304,019

(a)	Non-income producing security.

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

(c)	Affiliated investments.

(d)	The rate shown represents the 7-day yield as of period end.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.



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STATEMENT OF ASSETS & LIABILITIES

December 31, 2019


Assets
Investments in securities, at value
Unaffiliated issuers (cost $199,277,631)	$	250,657,845
Affiliated issuers (cost $27,442,867)		27,442,867
Receivable for capital stock sold		3,106,320
Affiliated dividends receivable		36,909
Unaffiliated dividends receivable		30,764
Receivable from Adviser		27,350

Total assets		281,302,055

Liabilities
Payable for investment securities purchased		2,911,414
Payable for capital stock redeemed		976,220
Dividends payable		6,401
Accrued expenses and other liabilities		104,001

Total liabilities		3,998,036

Net Assets	$	277,304,019

Composition of Net Assets
Capital stock, at par	$	1,801
Additional paid-in capital		227,056,352
Distributable earnings		50,245,866

	$	277,304,019

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

Advisor	$	277,304,019		18,012,181	$	15.40

See notes to financial statements.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 15

STATEMENT OF OPERATIONS

Year Ended December 31, 2019


Investment Income
Dividends
Unaffiliated issuers (net of foreign taxes withheld of $1,948)	$	1,230,096
Affiliated issuers		458,041		$	1,688,137

Expenses
Advisory fee (see Note B)		106,900
Transfer agency—Advisor Class		155,219
Administrative		83,124
Registration fees		51,816
Custodian		51,120
Audit and tax		49,495
Printing		45,558
Legal		42,354
Directors’ fees		22,927
Miscellaneous		39,630

Total expenses		648,143
Less: expenses waived and reimbursed by the Adviser (see Note B and Note D)		(455,858	)

Net expenses					192,285

Net investment income					1,495,852

Realized and Unrealized Gain on Investment Transactions
Net realized gain on investment transactions					628,497
Net change in unrealized appreciation/depreciation on investments					56,882,125

Net gain on investments					57,510,622

Contributions from Affiliates (see Note B)					60

Net Increase in Net Assets from Operations				$	59,006,534

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31, 2019			Year Ended December 31, 2018
Increase (Decrease) in Net Assets from Operations
Net investment income (loss)	$	1,495,852		$	(212,255	)
Net realized gain (loss) on investment transactions		628,497			(1,022,788	)
Net change in unrealized appreciation/depreciation on investments		56,882,125			(5,621,244	)
Contributions from Affiliates (see Note B)		60			– 0	–

Net increase (decrease) in net assets from operations		59,006,534			(6,856,287	)
Distributions to Shareholders
Advisor Class		(2,234,594	)		(7,127	)
Capital Stock Transactions
Net increase		83,786,137			142,334,900

Total increase		140,558,077			135,471,486
Net Assets
Beginning of period		136,745,942			1,274,456

End of period	$	277,304,019		$	136,745,942

See notes to financial statements.



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NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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 comprised of 28 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB FlexFee Large Cap Growth Portfolio (the “Fund”), a diversified portfolio. The Fund commenced operations on June 28, 2017. The Fund has authorized issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares. Class A, Class B, Class C, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares have not been issued. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven 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



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NOTES TO FINANCIAL STATEMENTS (continued)

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, AllianceBernstein L.P. (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.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 19

NOTES TO FINANCIAL STATEMENTS (continued)

securities. To account for this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

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)



20 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2019:

Investments in Securities

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks^

250,657,845

– 0

–

– 0

–

250,657,845

Short-Term Investments:

Investment Companies

27,442,867

– 0

–

– 0

–

27,442,867

Total Investments in Securities

278,100,712

– 0

–

– 0

–

278,100,712

Other Financial Instruments*

– 0

–

– 0

–

– 0

–

– 0

–

Total

278,100,712

– 0

–

– 0

–

278,100,712

^	See Portfolio of Investments for sector classifications.

3. Currency Translation

4. Taxes



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NOTES TO FINANCIAL STATEMENTS (continued)

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.

5. Investment Income and Investment Transactions

6. Expense Allocations

Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods.

7. Dividends and Distributions

8. Offering Expenses

Offering expenses of $68,085 were deferred and amortized on a straight line basis over a one year period starting from June 28, 2017 (commencement of operations).

NOTE B

Advisory Fee and Other Transactions with Affiliates



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NOTES TO FINANCIAL STATEMENTS (continued)

exceeded by, the performance of the Russell 1000 Growth Index (“Index”) plus 1.40% (“Index Hurdle”) over the Performance Period (as defined below). The Performance Adjustment is calculated and accrued daily, according to a schedule that adds or subtracts .00357% of the Fund’s average daily net assets for each .01% of absolute performance by which the performance of the Measuring Class exceeds or lags the Index Hurdle for the period from the beginning of the Performance Period through the current business day. The maximum Performance Adjustment (positive or negative) will not exceed an annualized rate of +/-.50% (“Maximum Performance Adjustment”) of the Fund’s average daily net assets, which would occur when the performance of the Measuring Class exceeds, or is exceeded by, the Index Hurdle by 1.40% or more for the Performance Period. On a monthly basis, the Fund will pay the Adviser the minimum fee rate of .05% on an annualized basis (Base Fee minus the Maximum Performance Adjustment) applied to the average daily net assets for the month. At the end of the Performance Period, the Fund will pay to the Adviser the total advisory fee, less the amount of any minimum fees paid during the Performance Period and any waivers described below. The period over which performance is measured (“Performance Period”) was initially from the commencement of operations to December 31, 2018 and thereafter is each 12-month period beginning on the first day in the month of January through December 31 of the same year. In addition, the Adviser has agreed to waive its advisory fee by limiting the Fund’s accrual of the advisory fee (Base Fee plus Performance Adjustment) on any day to the amount corresponding to the maximum fee rate multiplied by the Fund’s current net assets if such amount is less than the amount that would have been accrued based on the Fund’s average daily net assets for the Performance Period. For the year ended December 31, 2019, the Fund accrued advisory fees of $106,900, as reflected in the statement of operations, at an annual effective rate (excluding the impact from any expense waivers in effect) of .05% of the Fund’s average net assets, which reflected a (.50)% Performance Adjustment of $(1,068,995).



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NOTES TO FINANCIAL STATEMENTS (continued)

fee was waived or the expense was borne; such waivers that are subject to repayment amount to $173,083 for the period ended December 31, 2017 and $321,117 for the year ended December 31, 2018. In any case, no repayment will be made that would cause the Fund’s total annual expenses (subject to the exclusions set forth above) to exceed .05% of average daily net assets.

The Fund may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2020. In connection with the investment by the Fund in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Fund in an amount equal to the Fund’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. For year ended December 31, 2019, such waiver amounted to $21,580.

A summary of the Fund’s transactions in AB mutual funds for the year ended December 31, 2019 is as follows:


Fund	Market Value 12/31/18 (000)			Purchases at Cost (000)		Sales Proceeds (000)		Market Value 12/31/19 (000)			Dividend Income (000)
Government Money Market Portfolio	$	7,717		$	114,119	$	94,393	$	27,443		$	458
Government Money Market Portfolio*		– 0	–		1,349		1,349		– 0	–		0	**

Total								$	27,443		$	458

*	Investment of cash collateral for securities lending transactions (see Note D).

**	Amount is less than $500.



24 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2019, the Adviser reimbursed the Fund $60 for trading losses incurred due to trade entry errors.

NOTE C

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended December 31, 2019, were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	123,152,495		$	59,767,119
U.S. government securities		– 0	–		– 0	–



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 25

NOTES TO FINANCIAL STATEMENTS (continued)

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


Cost	$	227,903,463

Gross unrealized appreciation	$	51,786,783
Gross unrealized depreciation		(1,589,534	)

Net unrealized appreciation	$	50,197,249

1. Derivative Financial Instruments

The Fund did not engage in derivative transactions for the year ended December 31, 2019.

2. Currency Transactions

NOTE D

Securities Lending



26 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

Fund in connection with the loan), and payments are made for fees of the securities lending agent and for certain other administrative expenses. If the Fund receives non-cash collateral, the Fund will receive a fee from the borrower generally equal to a negotiated percentage of the market value of the loaned securities. The Fund will have the right to call a loan and obtain the securities loaned at any time on notice to the borrower within the normal and customary settlement time for the securities. While the securities are on loan, the borrower is obligated to pay the Fund amounts equal to any income or other distributions from the securities. The Fund will not be able to exercise voting rights with respect to any securities during the existence of a loan, but will have the right to regain ownership of loaned securities in order to exercise voting or other ownership rights. Collateral received and securities loaned are marked to market daily to ensure that the securities loaned are secured by collateral. The lending agent currently invests the cash collateral received in Government Money Market Portfolio, an eligible money market vehicle, in accordance with the investment restrictions of the Fund, and as approved by the Board. The collateral received on securities loaned is recorded as an asset as well as a corresponding liability in the statement of assets and liabilities. The collateral will be adjusted the next business day to maintain the required collateral amount. The amounts of securities lending income from the borrowers and Government Money Market Portfolio are reflected in the statement of operations. When the Fund earns net securities lending income from Government Money Market Portfolio, the income is inclusive of a rebate expense paid to the borrower. In connection with the cash collateral investment by the Fund in the Government Money Market Portfolio, the Adviser has agreed to waive a portion of the Fund’s share of the advisory fees of Government Money Market Portfolio, as borne indirectly by the Fund as an acquired fund fee and expense. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. A principal risk of lending portfolio securities is that the borrower may fail to return the loaned securities upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for the year ended December 31, 2019 is as follows:

Government Money
Market Portfolio

Market Value
of Securities
on Loan*

Cash
Collateral*

Market Value
of Non-Cash
Collateral*

Income from
Borrowers

Income
Earned

Advisory Fee
Waived

– 0

–

– 0

–

– 0

–

– 0

–

*	As of December 31, 2019



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 27

NOTES TO FINANCIAL STATEMENTS (continued)

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 December 31, 2019			Year Ended December 31, 2018			Year Ended December 31, 2019			Year Ended December 31, 2018

Advisor Class
Shares sold		12,670,835			14,410,203		$	170,742,836		$	173,478,632

Shares issued in reinvestment of dividends and distributions		115,808			463			1,783,434			5,327

Shares redeemed		(6,670,458	)		(2,628,665	)		(88,740,133	)		(31,149,059	)

Net increase		6,116,185			11,782,001		$	83,786,137		$	142,334,900

NOTE F

Risks Involved in Investing in the Fund



28 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Fund’s performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Fund’s performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.

NOTE G

Joint Credit Facility

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended December 31, 2019 and December 31, 2018 were as follows:


	2019		2018
Distributions paid from:
Ordinary income	$	2,234,594	$	7,127

Total taxable distributions paid	$	2,234,594	$	7,127



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 29

NOTES TO FINANCIAL STATEMENTS (continued)

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Undistributed ordinary income	$	48,617
Accumulated capital and other losses		0	^(a)
Unrealized appreciation/(depreciation)		50,197,249	^(b)

Total accumulated earnings/(deficit)	$	50,245,866

(a)	During the fiscal year, the Fund utilized $344,821 of capital loss carry forwards to offset current year net realized gains.

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

During the current fiscal year, permanent differences primarily due to contributions from the Adviser resulted in a net increase in distributable earnings and a net decrease in additional paid-in capital. These reclassifications had no effect on net assets.

NOTE I

Recent Accounting Pronouncements

NOTE J

Subsequent Events



30 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

FINANCIAL HIGHLIGHTS

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


	Advisor Class
	Year Ended December 31,						June 28, 2017^(a) to December 31, 2017
	2019			2018			June 28, 2017^(a) to December 31, 2017


Net asset value, beginning of period		$ 11.50			$ 11.18			$ 10.00

Income From Investment Operations

Net investment income (loss)^(b)(c)		.10			(.04	)		.04

Net realized and unrealized gain on investment		3.93			.36			1.19

Contributions from Affiliates		.00	^(d)		– 0	–		– 0	–

Net increase in net asset value from operations		4.03			.32			1.23

Less: Dividends and Distributions

Dividends from net investment income		(.09	)		(.00	)^(d)		(.02	)

Distributions from net realized gain on investment		(.04	)		(.00	)^(d)		(.03	)

Total dividends and distributions		(.13	)		(.00	)^(d)		(.05	)

Net asset value, end of period		$ 15.40			$ 11.50			$ 11.18


Total Return

Total investment return based on net asset value^(e)		35.01	%		2.87	%		12.34	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$277,304			$136,746			$1,274

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(f)†		.09	%		1.10	%^(g)		.08	%^(h)

Expenses, before waivers/reimbursements^(f)†		.30	%		1.65	%^(g)		37.04	%^(h)

Net investment income (loss)^(c)		.70	%		(.29	) %		.65	%^(h)

Portfolio turnover rate		31	%		38	%		25	%


† Expense ratios exclude the estimated acquired fund fees of affiliated/unaffiliated underlying
portfolios		.01	%		.01	%		.02	%^(h)

See footnote summary on page 32.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 31

FINANCIAL HIGHLIGHTS (continued)

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

(a)	Commencement of operations.

(b)	Based on average shares outstanding.

(c)	Net of expenses waived/reimbursed by the Adviser.

(d)	Amount is less than $0.005.

(e)

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. Total investment 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 for a period of less than one year is not annualized.

(f)

In connection with the Fund’s investments in affiliated underlying portfolios, the Fund incurs no direct expenses but bears proportionate shares of the acquired fund fees and expenses (i.e. operating, administrative and investment advisory fees) of the affiliated underlying portfolios. The Adviser has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses, and for the year ended December 31, 2019, the year ended December 31, 2018 and the period ended December 31, 2017, such waiver amounted to .01%, .01% and .02% (annualized), respectively.

(g)	The advisory fee reflected in the Fund’s expense ratio may be higher or lower than the Base Fee plus Performance Adjustment due to the different time periods over which the fee is calculated (i.e., the financial reporting period vs. the Performance Period).

(h)	Annualized.

See notes to financial statements.



32 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

AB FlexFee Large Cap Growth Portfolio:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB FlexFee Large Cap Growth Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of December 31, 2019, 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, the financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting AB Cap Fund, Inc.) at December 31, 2019, 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 its financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 33

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

February 26, 2020



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2019 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund for the taxable period ended December 31, 2019. For corporate shareholders 50.94% of dividends paid qualify for the dividends received deduction.

For individual shareholders, the Fund designates 53.04% of dividends paid as qualified dividend income.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 35

BOARD OF DIRECTORS

Marshall C. Turner, Jr⁽¹⁾, Chairman

Jorge A. Bermudez*

Michael J. Downey⁽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

Frank V. Caruso⁽²⁾, Vice President

John H. Fogarty⁽²⁾, Vice President

Vinay Thapar⁽²⁾, Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Vincent S. Noto, Chief Compliance Officer

Custodian and Accounting Agent

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

Transfer Agent

AllianceBernstein Investor Services, Inc.

P.O. Box 786003

San Antonio, TX 78278-6003

Toll-Free (800) 221-6003

Independent Registered Public Accounting Firm

Ernst & Young LLP

5 Times Square

New York, NY 10036

Legal Counsel

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

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

The day-to-day management of, and investment decisions for, the Fund’s portfolio are made by the Adviser’s U.S. Large Cap Growth Investment Team. Messrs. Caruso, Fogarty and Thapar are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

*	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee when he joins the Board on January 1, 2020.



36 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB 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 59 (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.		91	None



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 37

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2015)	Private Investor since prior to 2015. 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 all AB funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		91	Xilinx, Inc. (programmable logic semi-conductors) since 2007



38 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Jorge A. Bermudez,^ 68 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since 2020.		91	Moody’s Corporation since April 2011


Michael J. Downey,^## 76 (2015)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. 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.		91	None



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 39

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Nancy P. Jacklin,^## 71 (2015)	Private Investor since prior to 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 Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		91	None



40 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		91	None



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 41

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Garry L. Moody,^## 67 (2015)	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 is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council Governing Council. He has served as a director or trustee and as Chairman of the Audit Committees of the AB Funds since 2008.		91	None



42 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Earl D. Weiner,^## 80 (2015)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He 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.		91	None

*	The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department—Mutual Fund Legal, 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.

^	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and Independent Directors Committee when he joins the Board on January 1, 2020.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 43

MANAGEMENT OF THE FUND (continued)

Officer Information


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST 5 YEARS
Robert M. Keith 59	President and Chief Executive Officer	See biography above.

Frank V. Caruso 63	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is Chief Investment Officer of US Growth Equities.

John H. Fogarty 50	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015.

Vinay Thapar 41	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 60	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of ABIS**, with which she has been associated since prior to 2015.

Vince S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	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.



44 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

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 FlexFee^TM Large Cap Growth Portfolio (the “Fund”) at a meeting held on May 7-9, 2019 (the “Meeting”).



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 45

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 performance-based 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 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



46 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

profitability of fund 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 2017. The directors concluded that the Adviser’s level of profitability from its relationship with the Fund in 2018 was not unreasonable. The directors noted that, due to the performance fee component of the advisory fee, profitability would tend to be higher with better performance relative to the Fund’s benchmark index, which they considered to create an appropriate alignment of incentives.

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their proposed relationships with the Fund and the underlying fund advised by the Adviser in which the Fund invests, including, but not limited to, benefits relating to 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 recent 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

Advisory Fees and Other Expenses



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 47

Fund. 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 payable by other funds. The directors compared the Fund’s contractual effective advisory fee rate with a peer group median.

The directors also considered the Adviser’s fee schedule for other clients pursuing an investment strategy similar to the Fund’s. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule and the schedule of fees charged by the Adviser to any offshore funds and for services to any sub-advised funds pursuing an investment strategy similar to the Fund’s, 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 directors previously discussed these matters with an independent fee consultant. The directors also compared the advisory fee rate for the Fund with those for two other funds advised by the Adviser with a similar investment strategy.



48 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

Economies of Scale

The directors noted that the advisory fee schedule for the Fund does not contain breakpoints and that they had previously 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 presentations from time to time by the Adviser concerning certain of its views on economies of scale. The directors also previously discussed economies of scale with an independent fee consultant. 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 asset levels (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.



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 49

This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

INTERNATIONAL/ GLOBAL EQUITY (continued)

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio¹

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

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

Multi-Manager Select 2060 Fund

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

1	Prior to July 12, 2019, Total Return Bond Portfolio was named Intermediate Bond Portfolio; prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



50 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

NOTES



abfunds.com		AB FLEXFEE LARGE CAP GROWTH PORTFOLIO ^\| 51

NOTES



52 ^\| AB FLEXFEE LARGE CAP GROWTH PORTFOLIO		abfunds.com

LOGO

AB FLEXFEE LARGE CAP GROWTH PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

FFLCG-0151-1219 LOGO

DEC^12.31.19

LOGO

ANNUAL REPORT

AB FLEXFEE^TM US THEMATIC PORTFOLIO

LOGO



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.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB FlexFee US Thematic Portfolio (the “Fund”). Please review the discussion of Fund performance, the market conditions during the reporting period and the Fund’s investment strategy.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

⁺

Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 1

ANNUAL REPORT

February 12, 2020

This report provides management’s discussion of fund performance for AB FlexFee US Thematic Portfolio for the annual reporting period ended December 31, 2019.

The Fund’s investment objective is long-term growth of capital.

NAV RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	6 Months		12 Months

AB FLEXFEE US THEMATIC PORTFOLIO

Advisor Class Shares		8.12%		32.41%

S&P 500 Index		10.92%		31.49%

INVESTMENT RESULTS

The table above shows the Fund’s performance compared to its benchmark, the Standard and Poor’s (“S&P”) 500 Index, for the six- and 12-month periods ended December 31, 2019.

The Fund outperformed the benchmark for the 12-month period, but underperformed for the six-month period. The Fund’s performance-based advisory fee was accrued between its minimum and mid-point rates for the performance period from January 1, 2019 through December 31, 2019.

During the 12-month period security selection contributed, relative to the benchmark, particularly within the health care and consumer discretionary sectors. Sector selection detracted from performance, mainly due to cash held for transactional purposes and an overweight to consumer discretionary; underweights to energy and consumer staples contributed. For the six-month period, security selection detracted, primarily within the energy and financials sectors. Selection within utilities and industrials contributed. Overall sector selection was negative as cash held for transactional purposes and an overweight to consumer discretionary detracted most, while an underweight to energy and an overweight to technology contributed.

From a theme perspective, during the 12-month period the Digital Disruption and ConsumerCare themes were the top performers, while the Sustainable Planet theme contributed the least. For the six-month period, the Artificial Intelligence (“AI”) and ConsumerCare themes led overall thematic performance, while the Sustainable Planet theme contributed the least. The Digital Disruption theme consists of companies that protect digital assets and businesses that cater to the digital-first generations. The



2 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

ConsumerCare theme consists of companies that leverage digital medical data to achieve better health outcomes in the face of constrained consumer and government budgets. The Sustainable Planet theme focuses on companies applying innovative solutions to the world’s greatest environmental challenges including water, waste and energy generation. The AI theme consists of companies that facilitate AI development, as well as the early adopters of AI technology that are using it to offer more compelling products.

The Fund did not utilize derivatives during either period.

MARKET REVIEW AND INVESTMENT STRATEGY

Equities recorded strong double-digit returns during the 12-month period ended December 31, 2019. After declining sharply at the end of 2018, equity markets rebounded dramatically in January as strong corporate earnings and optimism about a trade truce between the US and China calmed investors. Trade-war tensions resurfaced, however, and emerging geopolitical pressures drove market volatility. Tariff wars, restrictive monetary policy and a decline in industrial production stoked recessionary fears throughout the global economy. In response, the world’s central banks implemented accommodative monetary policies to help support capital markets. Late in the third quarter, equity market performance was accompanied by a sharp style rotation in the US, as quality-growth and lower-volatility stocks, which had performed strongly earlier in the year, lagged and value stocks outperformed. However, for the most part, growth stocks outperformed value over the entire period. Small-cap stocks bested their large-cap peers during the fourth quarter, but for the year large-cap stocks outperformed small-cap by a substantial margin. In December, equity markets rallied on news that the US and China had agreed to a preliminary phase-one trade deal due to be signed in January 2020.

This backdrop bodes well for active management, as increased dispersion in equity returns can lead to more opportunities while supporting a premium for companies that have their own growth drivers. Given the expected volatility, the Fund’s Senior Investment Management Team (the “Team”) plans to take advantage of price dislocations that are presented in the market. The Team continues to maintain a balanced exposure to long-term secular investment themes. The Fund’s top-down approach is complemented by seeking attractive bottom-up fundamentals, with a focus on robust organic sales and earnings growth along with high returns on invested capital. The Team believes that this combination will continue to drive long-term performance versus the benchmark, in the face of moderating economic growth and heightened market volatility.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 3

INVESTMENT POLICIES

The Fund pursues opportunistic growth by investing primarily in a portfolio of US companies. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of US companies and related derivatives.

The Adviser employs a combination of “top-down” and “bottom-up” investment processes with the goal of identifying the most attractive US securities, fitting into broader themes, which are developments that have broad effects across industries and companies. Drawing on its fundamental research capabilities, the Adviser seeks to identify long-term secular growth trends (often resulting from innovation) that will affect multiple industries. The Adviser will assess the effects of these trends on entire industries and on individual companies. Through this process, the Adviser intends to identify key investment themes, which will be the focus of the Fund’s investments and which are expected to change over time based on the Adviser’s research.

In addition to this “top-down” thematic approach, the Adviser will also use a “bottom-up” analysis of individual companies that focuses on prospective earnings growth, valuation and quality of company management. The Adviser normally considers a universe of primarily US mid- to large-capitalization companies for investment.

The Adviser expects that normally the Fund’s portfolio will emphasize investments in securities issued by US companies, although it may invest in foreign securities.



4 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

DISCLOSURES AND RISKS

Benchmark Disclosure

A Word About Risk

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 may have limited product lines, markets or financial resources.

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



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 5

DISCLOSURES AND RISKS (continued)



6 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

6/28/2017¹ TO 12/31/2019

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB FlexFee US Thematic Portfolio Advisor Class shares (from 6/28/2017¹ to 12/31/2019) as compared to the performance of the Fund’s benchmark.

1	Inception date: 6/28/2017.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 7

HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2019 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES¹

1 Year		32.41%		32.41%

Since Inception²		14.76%		14.76%

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2019 (unaudited)



	SEC Returns (reflects applicable sales charges)

ADVISOR CLASS SHARES

1 Year		32.41%

Since Inception²		14.76%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 0.99% for Advisor Class shares, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Fund’s annual operating expense ratio exclusive of the Fund’s advisory fees, 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 0.05% for Advisor Class shares. These waivers/reimbursements may not be terminated before April 30, 2020. Any fees waived and expenses borne by the Adviser through December 31, 2018 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 other expenses to exceed the expense limitation. 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 ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

1	This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns.

2	Inception date: 6/28/2017.



8 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

EXPENSE EXAMPLE

(unaudited)

The 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



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 9

EXPENSE EXAMPLE (continued)


	Beginning Account Value 7/1/2019		Ending Account Value 12/31/2019		Expenses Paid During Period*		Annualized Expense Ratio*			Total Expenses Paid During Period+		Total Annualized Expense Ratio+
Advisor Class
Actual	$	1,000	$	1,081.20	$	2.15		0.41	%	$	2.20		0.42	%
Hypothetical**	$	1,000	$	1,023.14	$	2.09		0.41	%	$	2.14		0.42	%

*	Expenses are equal to the classes’ annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



10 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

PORTFOLIO SUMMARY

December 31, 2019 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $100.7

LOGO

TEN LARGEST HOLDINGS²



Company	U.S. $ Value		Percent of Net Assets

Danaher Corp.	$	2,843,985		2.8	%

Koninklijke Philips NV (ADR)		2,811,368		2.8

Apple, Inc.		2,730,945		2.7

Visa, Inc. – Class A		2,717,410		2.7

Rockwell Automation, Inc.		2,586,069		2.6

NIKE, Inc. – Class B		2,581,581		2.6

Aptiv PLC		2,529,241		2.5

Bio-Rad Laboratories, Inc. – Class A		2,434,798		2.4

Vestas Wind Systems A/S (Sponsored ADR)		2,422,085		2.4

Xylem, Inc./NY		2,420,192		2.4

	$	26,077,674		25.9	%

1	All data are as of December 31, 2019. The Fund’s sector breakdown is expressed as a percentage of total investments (excluding security lending collateral) and may vary over time.

2	Long-term investments.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 11

PORTFOLIO OF INVESTMENTS

December 31, 2019


Company	Shares		U.S. $ Value

COMMON STOCKS – 94.2%
Information Technology – 28.9%
Communications Equipment – 3.7%
Ciena Corp.^(a)		50,962	$	2,175,568
Lumentum Holdings, Inc.^(a)		20,083		1,592,582

				3,768,150

Electronic Equipment, Instruments & Components – 2.8%
Flex Ltd.^(a)		140,031		1,767,191
Keysight Technologies, Inc.^(a)		10,576		1,085,415

				2,852,606

IT Services – 6.0%
PayPal Holdings, Inc.^(a)		16,018		1,732,667
Square, Inc. – Class A^(a)		24,985		1,563,061
Visa, Inc. – Class A		14,462		2,717,410

				6,013,138

Semiconductors & Semiconductor Equipment – 4.5%
Monolithic Power Systems, Inc.		6,405		1,140,218
NVIDIA Corp.		6,663		1,567,804
NXP Semiconductors NV		14,480		1,842,725

				4,550,747

Software – 9.2%
ANSYS, Inc.^(a)		6,508		1,675,224
Microsoft Corp.		14,509		2,288,069
Proofpoint, Inc.^(a)		14,914		1,711,829
salesforce.com, Inc.^(a)		14,535		2,363,973
Zendesk, Inc.^(a)		15,364		1,177,343

				9,216,438

Technology Hardware, Storage & Peripherals – 2.7%
Apple, Inc.		9,300		2,730,945

				29,132,024

Health Care – 17.5%
Health Care Equipment & Supplies – 7.9%
Danaher Corp.		18,530		2,843,985
Koninklijke Philips NV (ADR)^(b)		57,610		2,811,368
West Pharmaceutical Services, Inc.		15,319		2,302,905

				7,958,258

Health Care Providers & Services – 2.0%
UnitedHealth Group, Inc.		6,981		2,052,274


Life Sciences Tools & Services – 7.6%
Bio-Rad Laboratories, Inc. – Class A^(a)		6,580		2,434,798
Bruker Corp.		39,296		2,002,917
ICON PLC^(a)		10,309		1,775,519



12 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

QIAGEN NV^(a)		42,369	$	1,432,072

				7,645,306

				17,655,838

Consumer Discretionary – 16.7%
Auto Components – 2.5%
Aptiv PLC		26,632		2,529,241


Diversified Consumer Services – 2.2%
Bright Horizons Family Solutions, Inc.^(a)		14,563		2,188,673


Hotels, Restaurants & Leisure – 1.5%
Starbucks Corp.		16,859		1,482,244


Internet & Direct Marketing Retail – 2.0%
Alibaba Group Holding Ltd. (Sponsored ADR)^(a)		9,739		2,065,642


Specialty Retail – 2.0%
Home Depot, Inc. (The)		9,310		2,033,118


Textiles, Apparel & Luxury Goods – 6.5%
Lululemon Athletica, Inc.^(a)		6,687		1,549,177
NIKE, Inc. – Class B		25,482		2,581,581
VF Corp.		24,072		2,399,016

				6,529,774

				16,828,692

Industrials – 9.1%
Aerospace & Defense – 1.7%
Hexcel Corp.		23,844		1,748,004


Electrical Equipment – 5.0%
Rockwell Automation, Inc.		12,760		2,586,069
Vestas Wind Systems A/S (Sponsored ADR)		71,936		2,422,085

				5,008,154

Machinery – 2.4%
Xylem, Inc./NY		30,717		2,420,192

				9,176,350

Financials – 8.0%
Capital Markets – 6.2%
Charles Schwab Corp. (The)		35,532		1,689,902
Intercontinental Exchange, Inc.		23,819		2,204,448
MSCI, Inc. – Class A		9,231		2,383,260

				6,277,610

Insurance – 1.8%
Aflac, Inc.		33,648		1,779,979

				8,057,589



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 13

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

Utilities – 4.3%
Electric Utilities – 2.2%
NextEra Energy, Inc.		9,253	$	2,240,707


Water Utilities – 2.1%
American Water Works Co., Inc.		17,086		2,099,015

				4,339,722

Consumer Staples – 4.2%
Food Products – 2.2%
Nestle SA (Sponsored ADR)		20,799		2,251,700


Household Products – 2.0%
Procter & Gamble Co. (The)		15,885		1,984,036

				4,235,736

Communication Services – 3.4%
Diversified Telecommunication Services – 1.9%
Comcast Corp. – Class A		42,316		1,902,950


Entertainment – 1.5%
Walt Disney Co. (The)		10,657		1,541,322

				3,444,272

Materials – 2.1%
Chemicals – 2.1%
Ecolab, Inc.		10,629		2,051,291


Total Common Stocks (cost $76,584,119)				94,921,514


SHORT-TERM INVESTMENTS – 6.4%
Investment Companies – 6.4%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(c)(d)(e)(cost $6,422,143)		6,422,143		6,422,143


Total Investments Before Security Lending Collateral for Securities Loaned – 100.6% (cost $83,006,262)				101,343,657



14 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


Company	Shares		U.S. $ Value

INVESTMENTS OF CASH COLLATERAL FOR SECURITIES LOANED – 0.2%
Investment Companies – 0.2%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 1.53%^(c)(d)(e)(cost $185,000)		185,000	$	185,000


Total Investments – 100.8% (cost $83,191,262)				101,528,657
Other assets less liabilities – (0.8)%				(814,748	)


Net Assets – 100.0%			$	100,713,909

(a)	Non-income producing security.

(b)	Represents entire or partial securities out on loan. See Note D for securities lending information.

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

(d)	Affiliated investments.

(e)	The rate shown represents the 7-day yield as of period end.

Glossary:

ADR – American Depositary Receipt

See notes to financial statements.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 15

STATEMENT OF ASSETS & LIABILITIES

December 31, 2019


Assets
Investments in securities, at value Unaffiliated issuers (cost $76,584,119)	$	94,921,514	^(a)
Affiliated issuers (cost $6,607,143 – including investment of cash collateral for securities loaned of $185,000)		6,607,143
Receivable for capital stock sold		169,757
Unaffiliated dividends receivable		34,852
Affiliated dividends receivable		8,950

Total assets		101,742,216

Liabilities
Dividends payable		467,639
Advisory fee payable		275,882
Payable for collateral received on securities loaned		185,000
Payable for capital stock redeemed		7,425
Transfer Agent fee payable		1,422
Accrued expenses and other liabilities		90,939

Total liabilities		1,028,307

Net Assets	$	100,713,909

Composition of Net Assets
Capital stock, at par	$	722
Additional paid-in capital		82,996,386
Distributable earnings		17,716,801

	$	100,713,909

Net Asset Value Per Share—11 billion shares of capital stock authorized, $.0001 par value


Class	Net Assets		Shares Outstanding		Net Asset Value

Advisor	$	100,713,909		7,224,074	$	13.94

(a)	Includes securities on loan with a value of $180,560 (see Note D).

See notes to financial statements.



16 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

STATEMENT OF OPERATIONS

Year Ended December 31, 2019


Investment Income
Dividends
Unaffiliated issuers (net of foreign taxes withheld of $11,601)	$	831,803
Affiliated issuers		132,223
Securities lending income		18,607		$	982,633

Expenses
Advisory fee (see Note B)		339,724
Transfer agency-Advisor Class		52,979
Administrative		74,134
Legal		57,524
Audit and tax		52,031
Custodian		40,704
Registration fees		32,330
Directors’ fees		22,927
Printing		16,815
Miscellaneous		43,624

Total expenses		732,792
Less: expenses waived and reimbursed by the Adviser (see Note B and Note D)		(355,473	)

Net expenses					377,319

Net investment income					605,314

Realized and Unrealized Gain on Investments
Net realized gain on investment transactions					2,003,339
Net change in unrealized appreciation/depreciation on investments					20,444,616

Net gain on investments					22,447,955

Net Increase in Net Assets from Operations				$	23,053,269

See notes to financial statements.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 17

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended December 31, 2019			Year Ended December 31, 2018
Increase (Decrease) in Net Assets from Operations
Net investment income	$	605,314		$	351,736
Net realized gain (loss) on investments		2,003,339			(2,645,677	)
Net change in unrealized appreciation/depreciation on investments		20,444,616			(2,214,524	)

Net increase (decrease) in net assets from operations		23,053,269			(4,508,465	)
Distributions to Shareholders
Advisor Class		(595,119	)		(359,924	)
Capital Stock Transactions
Net increase		13,047,504			68,965,731

Total increase		35,505,654			64,097,342
Net Assets
Beginning of period		65,208,255			1,110,913

End of period	$	100,713,909		$	65,208,255

See notes to financial statements.



18 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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 comprised of 28 portfolios currently in operation. Each portfolio is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB FlexFee US Thematic Portfolio (the “Fund”), a diversified portfolio. The Fund commenced operations on June 28, 2017. The Fund has authorized issuance of Class A, Class B, Class C, Advisor Class, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares. Class A, Class B, Class C, Class R, Class K, Class I, Class Z, Class T, Class 1, and Class 2 shares have not been issued. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All eleven 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



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 19

NOTES TO FINANCIAL STATEMENTS (continued)



20 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

equity securities using fair value prices based on third party vendor modeling tools to the extent available.

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)



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 21

NOTES TO FINANCIAL STATEMENTS (continued)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of December 31, 2019:

Investments in

Securities

Level 1

Level 2

Level 3

Total

Assets:

Common Stocks^

94,921,514

–0

–

–0

–

94,921,514

Short-Term Investments:

Investment Companies

6,422,143

– 0

–

– 0

–

6,422,143

Investments of Cash Collateral for Securities Loaned in Affiliated Money Market Fund

185,000

– 0

–

– 0

–

185,000

Total Investments in Securities

101,528,657

– 0

–

– 0

–

101,528,657

Other Financial Instruments*

– 0

–

– 0

–

– 0

–

– 0

–

Total

101,528,657

– 0

–

– 0

–

101,528,657

^	See Portfolio of Investments for sector classifications.

3. Currency Translation



22 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

4. Taxes

5. Investment Income and Investment Transactions

6. Expense Allocations

Expenses of the Company are charged proportionately to each portfolio or based on other appropriate methods.

7. Dividends and Distributions

8. Offering Expenses

Offering expenses of $68,085 were deferred and amortized on a straight line basis over a one year period starting from June 28, 2017 (commencement of operations).



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 23

NOTES TO FINANCIAL STATEMENTS (continued)

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 .55% of the Fund’s average daily net assets (“Base Fee”). The advisory fee is increased or decreased from the Base Fee by a performance adjustment (“Performance Adjustment”) that depends on whether, and to what extent, the investment performance of the Advisor Class shares of the Fund (“Measuring Class”) exceeds, or is exceeded by, the performance of the S&P 500 Index (“Index”) plus 1.40% (“Index Hurdle”) over the Performance Period (as defined below). The Performance Adjustment is calculated and accrued daily, according to a schedule that adds or subtracts .00357% of the Fund’s average daily net assets for each .01% of absolute performance by which the performance of the Measuring Class exceeds or lags the Index Hurdle for the period from the beginning of the Performance Period through the current business day. The maximum Performance Adjustment (positive or negative) will not exceed an annualized rate of +/- .50% (“Maximum Performance Adjustment”) of the Fund’s average daily net assets, which would occur when the performance of the Measuring Class exceeds, or is exceeded by, the Index Hurdle by 1.40% or more for the Performance Period. On a monthly basis, the Fund will pay the Adviser the minimum fee rate of .05% on an annualized basis (Base Fee minus the Maximum Performance Adjustment) applied to the average daily net assets for the month. At the end of the Performance Period, the Fund will pay to the Adviser the total advisory fee, less the amount of any minimum fees paid during the Performance Period and any waivers described below. The period over which performance is measured (“Performance Period”) was initially from the commencement of operations to December 31, 2018 and thereafter is each 12-month period beginning on the first day in the month of January through December 31 of the same year. In addition, the Adviser has agreed to waive its advisory fee by limiting the Fund’s accrual of the advisory fee (Base Fee plus Performance Adjustment) on any day to the amount corresponding to the maximum fee rate multiplied by the Fund’s current net assets if such amount is less than the amount that would have been accrued based on the Fund’s average daily net assets for the Performance Period. For the year ended December 31, 2019, the Fund accrued advisory fees of $339,724, as reflected in the statement of operations, at an annual effective rate (excluding the impact from any expense waivers in effect) of .39% of the Fund’s average net assets, which reflected a (.16)% Performance Adjustment of $(140,241).



24 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

extraordinary expenses, and brokerage commissions and other transaction costs) on an annual basis from exceeding .05% of average daily net assets (the “Expense Cap”). For the year ended December 31, 2019, such reimbursements/waivers amounted to $275,292. The Expense Cap will remain in effect until April 30, 2020 and then may be continued thereafter from year to year by the Adviser. Any fees waived and expenses borne by the Adviser through December 31, 2018 are subject to repayment 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; such waivers that are subject to repayment amount to $171,634 for the period ended December 31, 2017 and $233,614 for the year ended December 31, 2018. In any case, no repayment will be made that would cause the Fund’s total annual expenses (subject to the exclusions set forth above) to exceed .05% of average daily net assets.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 25

NOTES TO FINANCIAL STATEMENTS (continued)

A summary of the Fund’s transactions in AB mutual funds for the year ended December 31, 2019 is as follows:


Fund	Market Value 12/31/18 (000)		Purchases at Cost (000)		Sales Proceeds (000)		Market Value 12/31/19 (000)		Dividend Income (000)
Government Money Market Portfolio	$	4,002	$	22,915	$	20,495	$	6,422	$	125
Government Money Market Portfolio*		1,118		13,129		14,062		185		7

							$	6,607	$	132

*	Investment of cash collateral for securities lending transactions (see Note D).



26 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE C

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended December 31, 2019, were as follows:


	Purchases			Sales
Investment securities (excluding U.S. government securities)	$	44,357,173		$	33,029,581
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	$	83,370,091

Gross unrealized appreciation	$	18,802,584
Gross unrealized depreciation		(644,018	)

Net unrealized appreciation	$	18,158,566

1. Derivative Financial Instruments

The Fund did not engage in derivative transactions during the year ended December 31, 2019.

2. Currency Transactions



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 27

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE D

Securities Lending



28 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

replace the loaned securities. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower.

A summary of the Fund’s transactions surrounding securities lending for year ended December 31, 2019 is as follows:


							Government Money Market Portfolio
Market Value of Securities on Loan*	Cash Collateral*		Market Value of Non-Cash Collateral*		Income from Borrowers		Income Earned		Advisory Fee Waived
$ 180,560	$	185,000	$	– 0 –	$	18,607	$	6,917	$	198

*	As of December 31, 2019

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 December 31, 2019			Year Ended December 31, 2018			Year Ended December 31, 2019			Year Ended December 31, 2018

Advisor Class
Shares sold		1,657,246			6,307,763		$	20,420,612		$	71,764,101

Shares issued in reinvestment of dividends		19,130			12,998			266,674			137,647

Shares redeemed		(611,629	)		(261,434	)		(7,639,782	)		(2,936,017	)

Net increase		1,064,747			6,059,327		$	13,047,504		$	68,965,731

At December 31, 2019, the Adviser owned 49% of the Fund’s outstanding shares. Significant transactions by such shareholder, if any, may impact the Fund’s performance.

NOTE F

Risks Involved in Investing in the Fund



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 29

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE G

Joint Credit Facility



30 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the year ended December 31, 2019.

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended December 31, 2019 and December 31, 2018 were as follows:


	2019		2018
Distributions paid from:
Ordinary income	$	595,119	$	359,924

Total taxable distributions paid	$	595,119	$	359,924

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Undistributed ordinary income	$	21,744
Accumulated capital and other losses		(463,509	)^(a)
Unrealized appreciation/(depreciation)		18,158,566	^(b)

Total accumulated earnings/(deficit)	$	17,716,801

(a)	As of December 31, 2019, the Fund had a net capital loss carryforward of $463,509. During the fiscal year, the Fund utilized $2,017,012 of capital loss carry forwards to offset current year net realized gains.

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

During the current fiscal year, permanent differences primarily due to non-deductible excise tax paid resulted in a net increase in distributable earnings and a net decrease in additional paid-in capital. These reclassifications had no effect on net assets.

NOTE I

Recent Accounting Pronouncements



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 31

NOTES TO FINANCIAL STATEMENTS (continued)

disclosures about recurring or nonrecurring fair value measurements. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management has evaluated the impact of the amendments and elected to early adopt the ASU. The adoption of this ASU did not have a material impact on the disclosure and presentation of the financial statements of the Fund.

NOTE J

Subsequent Events



32 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

FINANCIAL HIGHLIGHTS

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


	Advisor Class
	Year Ended December 31,						June 28, 2017^(a) to December 31, 2017
	2019			2018			June 28, 2017^(a) to December 31, 2017


Net asset value, beginning of period		$ 10.59			$ 11.11			$ 10.00

Income From Investment Operations

Net investment income^(b)(c)		.09			.08			.04

Net realized and unrealized gain (loss) on investment		3.34			(.54	)		1.09

Net increase (decrease) in net asset value from operations		3.43			(.46	)		1.13

Less: Dividends and Distributions

Dividends from net investment income		(.08	)		(.06	)		(.02	)

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

Total dividends and distributions		(.08	)		(.06	)		(.02	)

Net asset value, end of period		$ 13.94			$ 10.59			$ 11.11

Total Return

Total investment return based on net asset value^(e)		32.41	%		(4.15	)%		11.32	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$100,714			$65,208			$1,111

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(f)†		.43	%		.42	%^(g)		.33	%^(h)

Expenses, before waivers/reimbursements^(f)†		.84	%		1.05	%^(g)		37.77	%^(h)

Net investment income^(c)		.69	%		.73	%		.66	%^(h)

Portfolio turnover rate		41	%		31	%		22	%


^† Expense ratios exclude the estimated acquired fund fees of affiliated/unaffiliated underlying
Portfolios		.01	%		.01	%		.01	%^(h)

See footnote summary on page 34.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 33

FINANCIAL HIGHLIGHTS (continued)

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

(a)	Commencement of operations.

(b)	Based on average shares outstanding.

(c)	Net of expenses waived/reimbursed by the Adviser.

(d)	Amount is less than $0.005.

(e)

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. Total investment 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 for a period of less than one year is not annualized.

(f)

In connection with the Fund’s investments in affiliated underlying portfolios, the Fund incurs no direct expenses but bears proportionate shares of the acquired fund fees and expenses (i.e. operating, administrative and investment advisory fees) of the affiliated underlying portfolios. The Adviser has contractually agreed to waive its fees from the Fund in an amount equal to the Fund’s pro rata share of certain acquired fund fees and expenses, for the year ended December 31, 2019, December 31, 2018, and the period ended December 31, 2017, such waiver amounted to 0.01%, 0.01% and 0.01% (annualized), respectively.

(g)	The advisory fee reflected in the Fund’s expense ratio may be higher or lower than the Base Fee plus Performance Adjustment due to the different time periods over which the fee is calculated (i.e., the financial reporting period vs. the Performance Period).

(h)	Annualized.

See notes to financial statements.



34 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

AB FlexFee US Thematic Portfolio:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB FlexFee US Thematic Portfolio (the “Fund”) (one of the portfolios constituting AB Cap Fund, Inc. (the “Company”)), including the portfolio of investments, as of December 31, 2019, 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, the financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at December 31, 2019, 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 its financial highlights for each of the two years in the period then ended and the period from June 28, 2017 (commencement of operations) through December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 35

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

February 26, 2020



36 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

2019 FEDERAL TAX INFORMATION

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund for the calander year ended December 31, 2019. For corporate shareholders 100.00% of dividends paid qualify for the dividends received deduction. For individual shareholders, the Fund designates 99.99% of dividends paid as qualified dividend income.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 37

BOARD OF DIRECTORS

Marshall C. Turner, Jr⁽¹⁾, Chairman

Jorge A. Bermudez^*

Michael J. Downey⁽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

Daniel C. Roarty⁽²⁾, Vice President

Benjamin Ruegsegger⁽²⁾, Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Vincent S. Noto, Chief Compliance Officer

Custodian and Accounting Agent

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

Principal Underwriter

AllianceBernstein Investments, Inc.

1345 Avenue of the Americas

New York, NY 10105

Independent Registered Public Accounting Firm

Ernst & Young LLP

5 Times Square

New York, NY 10036

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) 221-6003

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

The day-to-day management of, and investment decisions for, the Fund’s portfolio are made by the Adviser’s Thematic and Sustainable Equities Investment Team. Messrs. Roarty and Ruegsegger are the investment professional with the most significant responsibility for the day-to-day management of the Fund’s portfolio.

*	Mr. Bermudez will be a member of the the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee when he joins the Board on January 1, 2020.



38 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB 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 59 (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.		91	None



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 39

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2015)	Private Investor since prior to 2015. 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 all AB funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		91	Xilinx, Inc. (programmable logic semi- conductors) since 2007



40 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Jorge A. Bermudez,^{^} 68 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since 2020.		91	Moody’s Corporation since April 2011


Michael J. Downey,^## 76 (2015)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. 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.		91	None



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 41

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Nancy P. Jacklin,^## 71 (2015)	Private Investor since prior to 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 Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		91	None



42 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		91	None



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 43

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Garry L. Moody,^## 67 (2015)	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 is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council Governing Council. He has served as a director or trustee and as Chairman of the Audit Committees of the AB Funds since 2008.		91	None



44 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, ADDRESS, AGE, (YEAR FIRST ELECTED*)	PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
DISINTERESTED DIRECTORS (continued)

Earl D. Weiner,^## 80 (2015)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He 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.		91	None

*	The address for each of the Fund’s disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal & Compliance Department—Mutual Fund Legal, 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.

^	Mr. Bermudez will be a member of the Audit Committee, the Governance and Nominating Committee and Independent Directors Committee when he joins the Board on January 1, 2020.



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 45

MANAGEMENT OF THE FUND (continued)

Officer Information


Robert M. Keith 59	President and Chief Executive Officer	See biography above.

Benjamin Ruegsegger 40	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015.

Daniel C. Roarty 48	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Chief Investment Officer of Thematic and Sustainable Equities.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 60	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of ABIS**, with which she has been associated since prior to 2015.

Vince S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	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.



46 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

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 FlexFee^TM US Thematic Portfolio (the “Fund”) at a meeting held on May 7-9, 2019 (the “Meeting”).



abfunds.com		AB FLEXFEE US THEMATIC PORTFOLIO ^\| 47

Nature, Extent and Quality of Services Provided

Costs of Services Provided and Profitability



48 ^\| AB FLEXFEE US THEMATIC PORTFOLIO		abfunds.com

make comparisons of the profitability of the Advisory Agreement with the profitability of fund 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 periods reviewed. The directors noted that, due to the performance fee component of the advisory fee, profitability would tend to be higher with better performance relative to the Fund’s benchmark index, which they considered to create an appropriate alignment of incentives.

Fall-Out Benefits

Investment Results

Advisory Fees and Other Expenses



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The directors also considered the Adviser’s fee schedule for other clients pursuing an investment strategy similar to the Fund’s. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Analyst and noted the differences between the Fund’s fee schedule, on the one hand, and the Adviser’s institutional fee schedule and the schedule of fees charged by the Adviser to any offshore funds and for services to any sub-advised funds pursuing an investment strategy similar to the Fund’s, 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 directors previously discussed these matters with an independent fee consultant. The directors also compared the advisory fee rate for the Fund with that for another fund advised by the Adviser with a similar investment strategy.



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In connection with their review of the Fund’s advisory fee, the directors also considered the total expense ratio of the Advisor Class shares of the Fund in comparison to a peer group and a peer universe selected by each 15(c) service provider. The Advisor Class expense ratio of the Fund was based on the Fund’s latest fiscal year and the directors considered the Adviser’s expense cap for the Fund. The directors noted that it was likely that the expense ratios of some of the other funds in the Fund’s category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view the 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.

Economies of Scale



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This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

INTERNATIONAL/ GLOBAL EQUITY (continued)

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio¹

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

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

Multi-Manager Select 2060 Fund

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

1	Prior to July 12, 2019, Total Return Bond Portfolio was named Intermediate Bond Portfolio; prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



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LOGO

AB FLEXFEE US THEMATIC PORTFOLIO

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

FFUT-0151-1219 LOGO

ITEM 2. CODE OF ETHICS.

(a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant’s code of ethics is filed herewith as Exhibit 12(a)(1).

(b) During the period covered by this report, no material amendments were made to the provisions of the code of ethics adopted in 2(a) above.

(c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant’s Board of Directors has determined that independent directors Garry L. Moody and Marshall C. Turner, Jr. qualify as audit committee financial experts.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) - (c) The following table sets forth the aggregate fees billed by the independent registered public accounting firm Ernst & Young LLP, for the Fund’s last two fiscal years for professional services rendered for: (i) the audit of the Fund’s annual financial statements included in the Fund’s annual report to stockholders; (ii) assurance and related services that are reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under (i), which include advice and education related to accounting and auditing issues and quarterly press release review (for those Funds which issue press releases), and preferred stock maintenance testing (for those Funds that issue preferred stock); and (iii) tax compliance, tax advice and tax return preparation.


		Audit Fees		Audit-Related Fees		Tax Fees
AB FlexFee Emerging Market Growth	2018	$	41,926	$	—	$	15,628
	2019	$	41,926	$	—	$	24,374

AB FlexFee Large Cap Growth	2018	$	30,100	$	—	$	29,345
	2019	$	30,100	$	—	$	21,120

AB FlexFee US Thematic Portfolio	2018	$	30,100	$	—	$	32,385
	2019	$	30,100	$	—	$	22,876

AB FlexFee Core Opportunities Portfolio	2018	$	36,225	$	—	$	14,102
	2019	$	36,225	$	—	$	14,102

AB FlexFee International Strategic Core Portfolio	2018	$	44,903	$	—	$	16,898
	2019	$	44,903	$	—	$	26,822

(d) Not applicable.

(e) (1) Beginning with audit and non-audit service contracts entered into on or after May 6, 2003, the Fund’s Audit Committee policies and procedures require the pre-approval of all audit and non-audit services provided to the Fund by the Fund’s independent registered public accounting firm. The Fund’s Audit Committee policies and procedures also require pre-approval of all audit and non-audit services provided to the Adviser and Service Affiliates to the extent that these services are directly related to the operations or financial reporting of the Fund.

(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in the table under Item 4 (a) – (c) are for services pre-approved by the Fund’s Audit Committee.

(f) Not applicable.

(g) The following table sets forth the aggregate non-audit services provided to the Fund, the Fund’s Adviser and entities that control, are controlled by or under common control with the Adviser that provide ongoing services to the Fund:


		All Fees for Non-Audit Services Provided to the Portfolio, the Adviser and Service Affiliates		Total Amount of Foregoing Column Pre- approved by the Audit Committee (Portion Comprised of Audit Related Fees) (Portion Comprised of Tax Fees)
AB FlexFee Emerging Market Growth	2018	$	780,226	$	15,628
				$	—
				$	(15,628	)
	2019	$	868,430	$	24,374
				$	—
				$	(24,374	)

AB FlexFee Large Cap Growth	2018	$	793,943	$	29,345
				$	—
				$	(29,345	)
	2019	$	865,176	$	21,120
				$	—
				$	(21,120	)

AB FlexFee US Thematic Portfolio	2018	$	796,983	$	32,385
				$	—
				$	(32,385	)
	2019	$	866,932	$	22,876
				$	—
				$	(22,876	)

AB FlexFee Core Opportunities Portfolio	2018	$	778,700	$	14,102
				$	—
				$	(14,102	)
	2019	$	858,158	$	14,102
				$	—
				$	(14,102	)

AB FlexFee International Strategic Core Portfolio	2018	$	781,496	$	16,898
				$	—
				$	(16,898	)
	2019	$	870,878	$	26,822
				$	—
				$	(26,822	)

(h) The Audit Committee of the Fund has considered whether the provision of any non-audit services not pre-approved by the Audit Committee provided by the Fund’s independent registered public accounting firm to the Adviser and Service Affiliates is compatible with maintaining the auditor’s independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the registrant.

ITEM 6. INVESTMENTS.

Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the registrant.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 13. EXHIBITS.

The following exhibits are attached to this Form N-CSR:


EXHIBIT NO.		DESCRIPTION OF EXHIBIT

12 (a) (1)		Code of Ethics that is subject to the disclosure of Item 2 hereof

12 (b) (1)		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

12 (b) (2)		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

12 (c)		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): AB Cap Fund, Inc.


By:		/s/ Robert M. Keith
		Robert M. Keith
		President

Date:		February 28, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Robert M. Keith
		Robert M. Keith
		President

Date:		February 28, 2020

By:		/s/ Joseph J. Mantineo
		Joseph J. Mantineo
		Treasurer and Chief Financial Officer

Date:		February 28, 2020