GLOBAL CORE EQUITY STRATEGY
June 8, 2020
This document is issued by AllianceBernstein L.P. and approved by AllianceBernstein Limited, 50 Berkeley Street, London W1J 8HA. AllianceBernstein Limited is authorised and regulated in the UK by the Financial Conduct Authority (FCA–Reference Number 147956). This document is directed at Investment Professionals only. It is provided for marketing purposes but does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed in this document are based on our internal forecasts and should not be relied upon as an indication of future market performance. Past performance is no guarantee of future returns. This document is not intended for public use.
For Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Klaus Ingemann, CFA - Co-Chief Investment Officer – Global Core Equity Craig T. Schorr, CFA, CAIA, CFP® Managing Director – Public FundsAnn Parker Weeden Vice President – Public Funds
1|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
ESG: environmental, social and governance†Principles for Responsible InvestmentAs of March 31, 2020. Source: AB
Committed to Delivering Better Investment Outcomes for Our ClientsDiverse Perspectives Lead to Differentiated Insights and Innovative Solutions
Fostering Diverse PerspectivesOur culture engages people with different backgrounds, viewpoints and ways of thinking, bringing out the best in our firm—and for our clients.
Serving Clients with Our Global Reach and Integrated Network 50+ years of experience in investment
management
$542 billion in solutions for investors ranging from individuals to the world’s largest institutions
An on-the-ground presence in 51 cities across 25 countries
139 portfolio managers and 187 research analysts
PRI† signatory since 2011
Generating Differentiated InsightsWe integrate diverse perspectives and broad expertise, collaborating across disciplines and ESG investing. This helps us break down silos and deliver investment clarity.
Embracing InnovationWe challenge convention by applying new information sources and disruptive technology to advance our capabilities and the ways we serve clients.
2|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
AB Global Core Equity Overview
Past performance does not guarantee future results. Source: AB
Strategy Active, Core Portfolio seeking attractively valued companies using a cash flow–based approach Combines high-conviction stock picking and diversification to form a portfolio of ~60 stocks
Portfolio Construction
Along with stock picking, quantitative tools measure and help control factor exposures Common sense and experience drive decision making—consensus amongst investment board
Stock Selection Process
Majority of risk-taking is stock specific—classic fundamental approach Qualitative company research combined with cash-based valuation
Seek out long-term, sustainable profit growth at the right prices
Disciplined and repeatable process applies well to all industries, regions and styles
Team Dedicated Investment Board and analyst team have worked together for over a decade In joining AB, the Global Core team is able to leverage the firm’s broader capabilities while
allowing them to focus on investment research and portfolio management
Performance Consistent outperformance versus broad global markets over time and across market cycles
Goal: Generate Premium to Broad Market, Driven by Bottom-Up Stock Selection
3|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
USD, PercentOur Portfolio of Value Creators Has Been Resilient in Down Markets
Past performance does not guarantee future results. Data are preliminary.Composite inception July 1, 2011. Gross of fees. The previous history performance refers to a strategy started at BankInvest, an investment manager based in Denmark, in 1989. David Dalgas, Head of AB Global Core Equities was responsible for this Strategy beginning January 1, 2004, along with Klaus Ingemann. On March 31, 2010, these individuals left BankInvest and started their own company, CPH Capital. Performance of the Strategy resumed on July 1, 2011, which is the start date of the composite. AB acquired CPH Capital in June 2014. Periods of more than one year are annualized. This is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV.As of March 31, 2020. Source: BankInvest Basis, MSCI and AB; see Important Information and Performance Disclosure.
Outperformancein a down market
Underperformancein a down market
Underperformancein an up market
Outperformancein an up market
(15)
(10)
(5)
0
5
10
15
(75) (60) (45) (30) (15) 0 15 30 45 60 75
Exce
ss R
etur
n (R
ollin
g 12
-Mon
ths)
Index Return (Rolling 12-Month Periods)
Previous History Composite Current
4|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Global Core Equities: Our Philosophy
ACTIVE STOCKSELECTION
Long-term & cashflow focused stock picking
results in strong returns over time
CORE PORTFOLIO
Minimizing unintended factor & style risks
produces consistent results over time
+
5|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
AB Global Core Equity Investment Team
Please see team biographies for further details.*Per La Cour is based in New York.†Thomas Skovbjerg worked with the team from 2000 to 2007 and rejoined the team in 2016.As of March 31, 2020
Per la CourSenior Research Analyst
16 Years with Team21 Years in Industry
Consumer Discretionary& Consumer Staples*
Thomas Christensen, CAIA, CQF
Senior Quantitative Analyst15 Years with Team16 Years in Industry
Klaus Ingemann, CFACo-CIO
20 Years with Team27 Years in Industry
Healthcare, Technology & Communication Services
David Dalgas, CFACo-CIO
20 Years with Team27 Years in Industry
Generalist
Rasmus Lee Hansen, CFAPortfolio Manager and
Senior Research Analyst16 Years with Team16 Years in Industry
Financials & Real Estate
Investment Board
Thomas Skovbjerg, CFASenior Research Analyst
11 years with Team†
22 Years in IndustryEnergy, Industrials, Materials & Utilities
6|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
A Long History of Delivering Consistent Outperformance for Clients
Past performance does not guarantee future results. Data are preliminary.The previous history performance refers to a strategy started at BankInvest, an investment manager based in Denmark, in 1989. David Dalgas was responsible for this strategy beginning January 1, 2004, along with Klaus Ingemann. On March 31, 2010, these individuals left BankInvest and started their own company, CPH Capital. Performance of the strategy resumed on July 1, 2011, which is the start date of the composite. AB acquired CPH Capital in June 2014. Periods of more than one year are annualized. This is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV.Composite inception July 1, 2011. Gross of feesAs of March 31, 2020Source: BankInvest, MSCI and AB; see Important Information and Performance Disclosure.
Cumulative Excess Returns in USD
Previous History Composite
Relative Return +3.9%
Tracking Error 3.4%
Information Ratio 1.1
Relative Return +2.8%
Tracking Error 3.2%
Information Ratio 0.9
0
10
20
30
40
2004 2005 2006 2007 2008 2009 2010
Perc
ent
(5)
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Perc
ent
7|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Past performance does not guarantee future results. Data are preliminary. Data shown are gross of fees.Periods of more than one year are annualized. Numbers may not sum due to rounding. Past performance is no guarantee of future results. This is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV. Inception dates: Global Core Equity—June 30, 2011Source: MSCI and AB; see Performance Disclosure.
In USDAB Global Core Equity: Performance Summary
Periods Ended March 31, 2020
1Q 2020
OneYear
ThreeYears
FiveYears
SinceInception
Global Core Equity (20.7)% (9.4)% 4.5% 5.3% 7.9%
MSCI ACWI (21.4) (11.3) 1.5 2.8 5.1
Relative Performance +0.7% +1.9% +3.0% +2.5% +2.8%
Periods Ended May 31, 2020
April 2020
May 2020
2Q 2020
SinceInception
Global Core Equity 10.9% 2.9% 14.2% 9.4%
MSCI ACWI 10.7 4.3 15.5 6.7
Relative Performance +0.2% (1.4)% (1.3)% +2.7%
8|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Investment Process Overview
Review best ideas Unanimous board decision Emphasize Strength of case Risk/Return Cyclical/Secular risks
Size positions to minimize unintended risk exposures
Engage with management
Decision Making
Industry growth & profits Demographics Technology Regulation Environmental & social
Company moat & strategy Industry review Company review Management culture
Consistent models Cash flow focused Long term Risk framework
Require >20% upside Downside risk assessment
Quantitative indicators Value opportunities Wealth creation Strong balance sheets Low risk
Qualitative indicators Secular growers Wide moats Strong Governance
50–70Stocks
4,000-Stock Universe
Cash FlowModeling
Idea Generation Fundamental Due Diligence
Qualitative Long-Term Analysis
ESG is included in our quant screens, our fundamental analysis and our financial models
9|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
†Carbon Intensity (1+2): weighted average of portfolio less than weighted average of indexSource: MSCI, Norges Bank and AB
Integrated Within Selection Process and OwnershipResponsible Investing Approach
Identify ESG issues and how they are managed
Include in direct modelling Seek compensation for risk Incorporate E,S,G as risk premiums in
quant screens and valuations Bias against some energy, utilities and
materials companies Lower carbon intensity than index†
Voting on all stocks Collaboration between investment
team and AB RI team Third-party tools & data ISS, MSCI, Sustainalytics
Engagement Engagement with companies on
critical ESG issues Utilize AB ESiGht toolset
Can We Impact Behaviour?Can We Model It?
10|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Aiming for Consistent Idiosyncratic Excess ReturnsWhy AB Global Core Equity?
Experienced, Focused Investment Team
Established Track Record of Outperformance
Active Stock Selection
Core Portfolio Construction
Experienced team with extensive research resources who have worked together for many years Disciplined approach to evaluating and selecting securities Sophisticated risk management History of accommodating specific client needs and objectives
Proven track record of delivering strong absolute and relative returns Has resiliently worked across varying market environments Significant inflows over past Q1 2020 Competitive Fees support better net returns
Long Term, cash flow focused stock picking High active share—stock selection drives returns
Maximize the effect of stock selection Minimizes risks from country, style, region, and factor for a low tracking error Strive for smooth excess returns in all environments
11|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
APPENDIX
12|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
In US DollarsProposed Fee Schedule
GLOBAL CORE EQUITYSeparate Account
Minimum Account: $50 million
0.80 on the first $25 million
0.60 on the next $50 million
0.50 on the balance
Fee (Percent) Assets
Fee at $11 Million: N/A
GLOBAL CORE EQUITYCIT
Minimum Account: $10 million
0.75 on the first $50 million
0.70 on the next $50 million
0.60 on the balance
Note: CIT fee includes admin and is an all-in fee
Fee (Percent) Assets
Fee at $11 Million: 0.75%
GLOBAL CORE EQUITYMutual Fund
Minimum Account: N/A
0.90 on all assets Total
Fee (Percent) Assets
Fee at $11 Million: 0.90%
For your mandate, CIT is lowest cost and most operationally efficient
13|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Active Stock Picking Core Portfolio
Active Stock Selection
AB Global Core Equity Overview
Past performance does not guarantee future results. Data are preliminary. *Premium objective over rolling three-year periods, before fees†Based on BankInvest Basis from January 1, 2004, to March 31, 2010, and AB Global Core Equity composite from July 1, 2011. Measured using rolling periods at BankInvest, CPH Capital and AB (period April 1, 2010–June 30, 2011, is not included). Gross of fees. This is supplemental information to the GIPS-compliant performance and disclosure page.As of March 31, 2020Source: BankInvest, Morningstar, MSCI and AB; see Important Information and Performance Disclosure.
Risk-Aware Portfolio Construction
Winning PercentagePeriods of Rolling Outperformance†
No Style Bias over TimeQuarterly Style Plot
Number of Holdings 50–70
Active Share ~90%
Single Stock Limits Min 0.50%, Max 6%
Concentration ~35% in Top Ten
Target Premium 3% per annum*
Benchmark MSCI ACWI
Factor Exposure Limited
Style Bias None
Tracking Error ~4%, Max 6%
Beta 1.0
Large-CapValue
Small-CapValue
Large-CapGrowth
Small-CapGrowthMSCI ACWI
Strategy59% 68%87% 97% 100%
Months Three-Month One-Year Three-Year Five-Year
14|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Global Core Equity vs. MSCI ACWI (Basis Points)
Past performance does not guarantee future results. Holdings are subject to change. Sector attribution includes stock selection.Based on a representative Global Core Equity account, measured against MSCI All Country World, in USD. Attribution calculated gross of fees.As of March 31, 2020Source: MSCI and AB; see Disclosures and Important Information.
Attribution: 1Q 2020
Largest Contributors
Largest DetractorsSector Attribution
Relative Performance
(39)
35
26
+23
Sector Selection
Company Sector Attribution
Naspers Consumer Discretionary +54
Secom Industrials +41
Singapore Exchange Financials +37
Microsoft Technology +28
Reckitt Benckiser Consumer Staples +25
Company Sector Attribution
Marathon Petroleum Energy (97)
Samsonite Consumer Discretionary (62)
Wells Fargo Financials (50)
Marriott International Consumer Discretionary (38)
Las Vegas Sands Consumer Discretionary (38)
Stock Selection
75
40
33
(35)
(41)
(83)
Industrials
Financials
Communication Services
Energy
Consumer Discretionary
Healthcare
Currency Exposures
15|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Past performance does not guarantee future results.The previous history performance refers to a strategy started at BankInvest, an investment manager based in Denmark, in 1989. David Dalgas was responsible for this Strategy beginning January 1, 2004, along with Klaus Ingemann. On March 31, 2010, these individuals left BankInvest and started their own company, CPH Capital. Performance of the Strategy resumed on July 1, 2011, which is the start date of the composite. AB acquired CPH Capital in June 2014. Historical information provided is for illustrative purposes only. Composite inception July 1, 2011. Gross of fees. Periods of more than one year are annualized. Numbers may not sum due to rounding. Periods of more than one year are annualized. This is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV. As of March 31, 2020. Source: BankInvest, MSCI and AB; see Performance Disclosure.
Gross of Fees, USD (Percent)A Long History of Delivering Consistent Outperformance for Clients
19.914.6
28.8
15.2
(37.7)
33.6
2.4
(11.8)
26.130.2
2.0
(1.7)
8.9
26.4
(4.3)
28.7
(20.7)
15.210.8
21.0
11.7
(42.2)
34.6
3.1
(11.5)
16.122.8
4.2
(2.4)
7.9
24.0
(9.4)
26.6
(21.4)
2004 2005 2006 2007 2008 2009 1Q:2010
2H:2011
2012 2013 2014 2015 2016 2017 2018 2019 YTD2020
Relative Return +3.9%Tracking Error 3.4%Information Ratio 1.1
Relative Return +2.8%Tracking Error 3.2%Information Ratio 0.9
Previous History CompositeMSCI ACWI
16|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Past performance does not guarantee future results.Black line indicates return of MSCI ACWI. Diamond indicates performance of strategy. Correlation of excess returns of the AB Global Core Equity Strategy and MSCI ACWI factor indices vs. the MSCI ACWI index. Based on periods January 1, 2004, to March 31, 2010, and from July 1, 2011, to present. This is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV. Composite inception July 1, 2011. As of March 31, 2020. Source: BankInvest, MSCI and AB; see Performance Disclosure.
Factor Biases Can Increase Risk
Correlation of Excess Return
Annual Returns (USD, Percent)2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1Q 2020
Minimum Volatility 21.6
Momentum26.3
High Yield28.7
Momentum24.4
Minimum Volatility(25.6)
Growth37.5
Momentum16.0
Minimum Volatility 5.3
Momentum17.5
Momentum26.8
Minimum Volatility 11.0
Minimum Volatility 2.8
Value12.6
Momentum33.5
Minimum Volatility(1.6)
Quality35.1
Momentum(12.1)
Momentum21.5
Growth11.6
Value25.6
Quality19.5
Quality(36.2)
High Yield37.1
Growth15.1
Momentum1.9
Growth16.7
Quality23.2
Quality8.2
Momentum1.9
High Yield10.0
Growth30.0
Momentum(4.9)
Growth32.7
Quality(15.5)
High Yield19.6
Value10.8
Minimum Volatility 24.9
Growth16.6
Value(41.5)
Quality36.0
Minimum Volatility 14.3
Quality1.6
Value15.6
Growth23.2
Momentum5.9
Growth1.6
Minimum Volatility 7.4
Quality28.4
High Yield (7.1)
Momentum27.5
Growth(15.7)
Value19.1
High Yield9.5
Momentum23.0
High Yield9.0
High Yield (41.6)
Value31.7
Quality11.5
High Yield (0.7)
Quality14.9
Value22.4
Growth5.4
Quality1.5
Quality5.5
High Yield18.9
Quality(7.4)
High Yield23.9
Minimum Volatility(16.0)
Quality12.9
Minimum Volatility 8.9
Quality18.2
Minimum Volatility 6.9
Growth(42.9)
Momentum19.3
Value10.2
Value(7.3)
High Yield14.4
High Yield18.2
Value2.9
High Yield (5.4)
Momentum4.2
Value18.3
Growth(8.1)
Minimum Volatility 21.1
High Yield(22.2)
Growth11.8
Quality7.8
Growth15.7
Value6.7
Momentum(45.2)
Minimum Volatility 17.2
High Yield7.8
Growth(7.4)
Minimum Volatility 10.1
Minimum Volatility 16.9
High Yield1.3
Value(6.3)
Growth3.3
Minimum Volatility 17.9
Value(10.8)
Value20.6
Value(27.1)
Factor returns are volatile and have unpredictable levels of risk, making them hard to forecast
Momentum
0.0
Minimum Volatility
(0.1)
High Yield
(0.2)
Value
(0.0)
Quality
0.0
Growth
0.0
Strategy has had minimal correlation with factor–driven excess returns
MSCI ACWI
AB Global Core Equity
We seek to ensure that stock selection, and not factor exposures, drives excess return in the Portfolio
17|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Source: AB
Looking for Better Companies at Attractive ValuationsIdentifying Candidates
Research Focus
Most Attractive
Least Attractive
Mor
e so
urce
s of
retu
rnFe
w s
ourc
es o
f ret
urn
Driver Quantitative Indicators Fundamental Indicators
High Fundamental Returns MS moat HOLT eCAP CFROI level CFROI trend
Entry barriers and competition Buyer and supplier power Technology disruption Regulatory changes Brands and patents
Long-Term Growth Sales growth CF growth
Industry growth Demographics Product innovation Management culture
Low Risk Leverage Fixed charge coverage CFROI variability Low ESG risks
Stress testing Short case review
Capital Allocation Total yield Management incentives
Low Price Multiples Price to FCF EV/EBITDA Price/earnings Adjusted for risk premiums
DCF valuation Scenario analysis
18|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Portfolio Construction
Strategy vs. MSCI ACWISource: FactSet, MSCI and AB
Risk Profile
Global Core Equities
Style Risks
Stock-Specific
Risk
StockSelection
PortfolioConstruction
Best New Ideas
Adjust Current Holdings
Maximize Alpha Potential
Reduce Factor Risks
Higher ROIC Better Balance Sheets Better Capital Deployment Better Management
Incentives Lower Cash Flow Multiples
19|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Analysis provided for illustrative purposes only and is subject to revisionStyle Research chart (as of February 29, 2020) shows the breakdown of tracking error attributed to equity risk vs. peers in the Morningstar EAA Global Large Cap Blend category, relative to MSCI ACWI, divided into quartiles. A higher stock-specific risk attribution means the strategy generates more stock specific risk than peers. Logos, brands and other trademarks in this presentation are the property of their respective trademark holders. They are used for illustrative purposes only, and are not intended to convey any endorsement or sponsorship by, or association or affiliation with, the trademark holders.As of March 31, 2020Source: Axioma, Bloomberg, Citigroup, MSCI Barra, StyleAnalytics, UBS and AB
We Use a Multitude of Risk ModelsHow We Monitor and Assess Risk
0%10%20%30%40%50%60%70%80%90%
100%
Barra
GEM
LT (S
T)
Barra
GEM
LT(R
)
Barra
GEM
3L
Barra
GEM
3S
Citi
GR
AM
AB-V
(1.1
)
AB-C
ore
(2.0
)
Bloo
mbe
rg G
loba
l
Bber
g G
EF R
-S
Axio
ma-
CS-
MT
Axio
ma-
STAT
-MT
Axio
ma-
CS-
ST
Axio
ma-
STAT
-ST
Ris
k C
ontri
butio
n
Stock Specific Risk Styles * Sectors/Industry Country Currency Macro (TS) Statistical
Average: 68.6%
Stoc
k-Sp
ecifi
c R
isk
Attri
butio
nPe
rcen
t of R
isk
Style Research:Risk vs. Peers
2nd Percentile
AB Global Core Equity
20|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Prime Alpha Since Inception (Percent)*Striving for Consistent Idiosyncratic Returns
Past performance does not guarantee future results.*Alpha, often considered the active return on an investment, gauges the performance of an investment against the market and is used as a measure of manager skill. Calculated before fees based on institutional composite returns versus MSCI ACWI. Inception date: Global Core Equity—June 30, 2011. Data in US Dollars. Performance data are annualized. This is supplemental information to the GIPS-compliant performance and disclosure page. Numbers may not sum due to rounding. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV. As of March 31, 2020. Source: BlackRock, MSCI and AB; see Performance Disclosure.
Exposures Contribution to Returns
3.56
(0.75)
Excess Return Factor Returns
(0.48)
(0.41)
0.14
(0.21)
0.22
2.80Prime Alpha
(0.00)
(0.13)
(0.11)
0.04
0.10
(0.06)Value
Size (Small Cap)
Quality
Min Vol
Momentum
Market
21|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
A Portfolio of Better Companies at Attractive Prices
Past performance and current analysis do not guarantee future results.Strategy (excluding holding companies) vs. MSCI ACWI*Return on invested capital is measured using cash flow return on investment (CFROI).†EPS: earnings per shareAs of March 31, 2020Source: FactSet, MSCI and AB
Profitability/Capital Use Strategy IndexReturn on Invested Capital* 15.7% 13.5%
Return on Invested Capital Volatility* 14.6% 22.2%
Leverage
Net Debt/Equity ex Financials 16.9% 21.5%
GrowthHistorical Five-Year EPS† 12.3% 14.6%
ValuationPrice/Earnings (FY1) 15.0 14.9
Price/Free Cash Flow (FY1) 16.9 17.3
Better Companies
Structurally attractive and growing industries
Competitively advantaged/wide moats
Good stewards of capital
Strong balance sheets
Attractive Prices
22|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Portfolio Characteristics (Percent)
Holdings are subject to change. Data are preliminary.Based on a representative account compared to the MSCI ACWI Index. The portfolio allocation excludes cash and futures unless otherwise shown.Numbers may not sum due to rounding. As of March 31, 2020Source: MSCI and AB
Current Weights by Region
Region Portfolio Active Weight
Japan 12.7
Dev. Europe ex UK 15.8
Dev. Asia Pacific ex Japan 3.1
UK 3.6
Emerging 10.4
US 54.2
Canada —
Current Weights by Sector
Sector Portfolio Active WeightCommunication Services 13.0
Financials 17.6
Consumer Discretionary 13.0
Materials 4.8
Industrials 9.7
Energy 3.3
Healthcare 12.4
Technology 17.9
Real Estate 1.4
Consumer Staples 6.9
Utilities —
3.7
3.2
2.1
0.4
0.1
(0.4)
(0.9)
(0.9)
(1.8)
(2.0)
(3.6)
5.1
2.4
(0.1)
(0.7)
(1.8)
(2.4)
(2.7)
23|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
We increased name count in Q1 to reduce risk
Based on a representative Global Core Equity account. Holdings are subject to change.Weights relative to MSCI ACWIAs of March 31, 2020Source: MSCI and AB
Recent Portfolio Changes
-5.0% 0.0% 5.0%
Information Technology
Consumer Discretionary
Financials
Utilities
Industrials
Real Estate
Energy
Communication Services
Health Care
Materials
Consumer Staples
-2.0% 0.0% 2.0%
Communication Services
Utilities
Health Care
Real Estate
Energy
Consumer Discretionary
Materials
Industrials
Financials
Consumer Staples
Information Technology
Changes to Relative Weight:Q1 2020
Changes to Relative Weight:Last 12-Months
Transactions in Q12020Buys/Adds Sells/Trims
24|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Past performance does not guarantee future results.Decomposition of cumulative excess return for the two periods shown.
*Based on a representative account from June 30, 2011 to March 31, 2020. Left to right—Regions: Africa/Mideast, Latin America, Europe, Japan, Asia/Pacific ex Japan, North America; Sectors: materials, consumer discretionary, consumer staples, communication services, real estate, energy, utilities, industrials, healthcare, technology, financials; Styles: value/growth, neutral, value, growth; Size Categories: mega, small-mid, large.
†Based on a representative account from December 31, 2003 to March 31, 2010. Left to right—Regions: Africa/Mideast, Japan, Asia/Pacific ex Japan, Latin America, North America, Europe; Sectors: energy, healthcare, utilities, industrials, technology, communication services, consumer staples, materials, financials, consumer discretionary; Styles:growth, neutral, value/growth, value; Size Categories: mega, small-mid, largeThis is supplemental information to the GIPS-compliant performance and disclosure page. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account paying a 0.50% annual fee with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part 2A of AB’s Form ADV. Source: FactSet, Morningstar, MSCI and AB; see Performance Disclosures.
Stock Selection, Not Factor Exposure, Drives ResultsPercent
Previous History†Composite*
Stock Selection in Size CategoriesStock Selection in Styles
(6)
(3)
0
3
6
(2) 0 2 4 6 8 10 12 14 16 18(6)
(3)
0
3
6
(4) (2) 0 2 4 6 8 10 12 14 16 18 20 22
Stock Selection in SectorsStock Selection in Regions
(10)(6)(2)26
10
(5) 0 5 10 15 20 25 30 35(6)
(3)
0
3
6
(2) 0 2 4 6 8 10 12 14 16
Reg
iona
lAl
loca
tion
Stock Selection
Sect
orAl
loca
tion
Stock Selection
Styl
eAl
loca
tion
Stock Selection
Size
Allo
catio
n
Stock Selection
25|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Source: AB
Investment Team Profiles
Rasmus Lee Hansen, CFA
Portfolio Manager and Senior Research Analyst—Global Core Equity
Rasmus Lee Hansen was promoted to Portfolio Manager in 2016 having joined AB in 2014 as a Senior Research Analyst for AB Global Core Equity. He previously served as a senior research analyst at CPH Capital. Prior to that, Hansen was a research analyst and portfolio manager at BankInvest, where he had shared responsibility for the Investment Grade Corporate Bonds fund. He holds both a BSc and an MSc in business administration and management science from the Copenhagen Business School, and is a CFA charterholder. He is also an active member of The Danish Society of Financial Analysts and the CFA Society Denmark. Location: Copenhagen
David Dalgas joined AB in 2014 and is Co-Chief Investment Officer of Global Core Equity. He previously served as head of equities and CIO at CPH Capital, which he cofounded in 2011. Prior to that, Dalgas was head of equities at BankInvest, where he was responsible for equity portfolios serving global institutional investors. He previously worked in portfolio management and equity research at LD Invest (now known as Maj Invest), WestLB, Amagerbanken and the Central Bank of Denmark. Dalgas holds a BSc in economics and business administration and an MSc in finance and accounting from the Copenhagen Business School, and is a CFA charterholder.Location: Copenhagen
David Dalgas, CFA
Co-Chief Investment Officer—Global Core Equity
Klaus Ingemann, CFA
Co-Chief Investment Officer—Global Core Equity
Klaus Ingemann joined AB in 2014 as Portfolio Manager and Senior Research Analyst and was promoted to Co-Chief Investment Officer of Global Core Equity in 2018. He previously served as an executive member of the investment board at CPH Capital, which he cofounded in 2011. Prior to that, Ingemann was chief portfolio manager and a member of the investment board at BankInvest. He previously worked as a corporate finance advisor for Carnegie Bank, where he mainly advised on cross-border mergers and acquisitions. Before that, Ingemann spent four years in the finance department at Tele Danmark, where he was primarily involved with developing a value-at-risk management system. He holds a BSc in business administration and an MSc in finance and accounting from the Copenhagen Business School, and is a CFA charterholder. Location: Copenhagen
Per la Cour joined AB in 2014 as a Senior Research Analyst for AB Global Core Equity. He previously served as a senior research analyst at CPH Capital, where he oversaw the Global Consumer Equities fund. Prior to that, la Cour was a research analyst and portfolio manager at BankInvest, where he was responsible for investments in the consumer sectors and for the Consumer Equities fund. He previously worked at Skandia and Alm. Brand. Prior to joining the financial industry, la Cour worked for three years as a ship broker. He holds both a BSc and an MSc in finance and accounting from the Copenhagen Business School, and is an active member of The Danish Society of Financial Analysts and CFA Denmark. Location: New York
Per la Cour
Senior Research Analyst—Global Core Equity
Thomas Skovbjerg, CFA
Senior Research Analyst—Global Core Equity
Thomas Skovbjerg joined AB in 2016 as a Senior Research Analyst for Global Core Equity. He previously served as a partner with Adaxia Capital Partners, the London-based manager of CPE Private Equity, investing in energy, industrials and materials companies on behalf of institutional investors. Prior to that, Skovbjerg was a research analyst and portfolio manager at BankInvest, where he was responsible for investments in the energy and materials sectors. He previously worked as a fund manager at ATP, the largest pension fund in Denmark. Skovbjerg holds an MSc in economics from the University of Copenhagen and is a CFA charterholder. Location: Copenhagen.
Thomas Christensen, CAIA, CQF
Senior Quantitative Analyst—Global Core Equity
Thomas Christensen joined AB in 2014 as a Senior Quantitative Analyst for AB Global Core Equity. He previously served as senior risk and quant manager at CPH Capital. Prior to that, Christensen held a similar role at BankInvest. He holds both a BSc and an MSc in business administration and management science from the Copenhagen Business School, and is a Chartered Alternative Investment Analyst (CAIA) with a Certificate in Quantitative Finance (CQF). Location: Copenhagen
26|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Disclosures and Important Information
Disclosure on Security ExamplesReferences to specific securities are presented to illustrate the application of our investment philosophy only and are not to be considered recommendations by AB. The specific securities identified and described in this presentation do not represent all of the securities purchased, sold or recommended for the portfolio, and it should not be assumed that investments in the securities identified were or will be profitable. Upon request, we will furnish a listing of all investments made during the prior one-year period.Past performance is not a guide to future performance.
Additional InformationThe value of investments and the income from them can fall as well as rise, and you may not get back the original amount invested.The value of non-domestic securities may be subject to exchange-rate fluctuations.The views and opinions expressed in this presentation are based on AB’s internal forecasts and should not be relied upon as an indication of future market performance or any guarantee of return from an investment in any AB services.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 or any securities or financial products. This report is not approved, reviewed or produced by MSCI. CFROI® is a registered trademark of Credit Suisse
Strategy HistoryThe performance history contained within refers to a strategy started at BankInvest, an investment manager based in Denmark, in 1989. David Dalgas was responsible for this strategy beginning 1 January 2004 along with Klaus Ingemann. On 31 March 2010 David and Klaus left BankInvest and started their own company, CPH Capital. Performance of the strategy resumed on 1 July 2011 which is the start date of the composite. AB acquired CPH Capital in June 2014. See Performance Disclosure.
27|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
A Word About RiskMarket Risk: The market values of the investments may rise and fall from day to day, so investments may lose value.
Interest Rate Risk: Bonds may lose value if interest rates rise or fall—long-duration bonds tend to rise and fall more than short-duration bonds.
Credit Risk: A bond’s credit rating reflects the issuer’s ability to make timely payments of interest or capital—the lower the rating, the higher the risk of default. If
the issuer’s financial strength deteriorates, the issuer’s rating may be lowered and the bond’s value may decline.
Allocation Risk: Allocating to different types of assets may have a large impact on returns if one of these asset classes significantly underperforms the others.
Foreign Risk: Investing in overseas assets may be more volatile because of political, regulatory, market and economic uncertainties associated with them. These
risks are magnified in assets of emerging or developing markets.
Currency Risk: Currency fluctuations may have a large impact on returns and the value of an investment may be negatively affected when translated into the
currency in which the initial investment was made.
Capitalization Size Risk: Holdings in smaller companies are often more volatile than holdings in larger ones.
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 or any securities or financial products. This report is not approved, reviewed or produced
by MSCI.
Any references to specific securities are presented to illustrate the application of our investment philosophy only and are not to be considered investment
recommendations. The specific securities identified and described in this presentation do not represent all of the securities purchased, sold or recommended for a
portfolio, and it should not be assumed that investments in the securities identified were or will be profitable.
28|Global Core EquityFor Investment Professional use only. Not for inspection by, distribution or quotation to, the general public.
Global Core Equity Composite (in US Dollar)Performance Disclosure
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.© 2020 AllianceBernstein L.P. www.AllianceBernstein.com
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