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Investment in the Portfolio entails certain risks. Investment returns and principal value of the Portfolio will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Some of the principal risks of investing in the Portfolio include:
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Investing primarily in US stocks that offer compelling long-term return potential at attractive valuations
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Employing a disciplined, bottom-up approach that combines fundamental research with proprietary quantitative tools to identify attractive investment opportunities, with an emphasis on valuation
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Leveraging a dedicated US investment team as well as the global insights of AB’s worldwide research organization
Portfolio Management Team
Investment Risks to Consider
These and other risks are described in the Portfolio's prospectus
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Convertible securities risk: As convertible securities are structured as bonds that typically can, or must, be repaid with a predetermined quantity of equity shares, rather than cash, they carry both equity risk and the credit and default risks typical of bonds.
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Counterparty and custody risk: The risk that the counterparty could become insolvent, unwilling or unable to meet its obligations, resulting in payments being delayed, reduced or eliminated.
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Currency risk: Investments may be denominated in one or more currencies which are different from the Portfolio’s base currency. Currency movements in the investments may significantly affect the net asset value of the Portfolio.
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Depositary receipts risk: Depositary receipts (certificates that represent securities held on deposit by financial institutions) carry liquidity and counterparty risks. Depositary receipts, such as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and P-Notes, can trade below the value of their underlying securities. Owners of depositary receipts may lack some of the rights (such as voting rights) they would have if they owned the underlying securities directly.
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Derivatives risk: The Portfolio may include financial derivative instruments. These may be used to obtain, increase or reduce exposure to underlying assets and may create gearing; their use may result in greater fluctuations of the net asset value.
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Equity securities risk: The value of equity investments may fluctuate in response to the activities and results of individual companies or because of market and economic conditions. These investments may decline over short- or long-term periods.
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Hedging risk: Hedging may be used when managing the Fund, as well as for currency hedge share classes to eliminate the potential for gains along with the risk for loss. Measures designed to offset specific risks may work imperfectly, may not be feasible at times or may fail completely. As there is no segregation of liabilities between the share classes, there is a remote risk that, under certain circumstances, currency hedging transactions could result in liabilities with might affect the NAV of the other share classes and their assets may be used to cover those liabilities incurred.
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Liquidity risk: The risk that arises when adverse market conditions affect the ability to sell assets when necessary. Reduced liquidity may have a negative impact on the price of the assets.
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Market risk: Prices and yields of many securities can change frequently, sometimes with significant volatility, and can fall, based on a wide variety of factors, for example government policy or change in technology. he effects of market risk can be immediate or gradual, short-term or long-term, or narrow or broad.
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Operational (including safekeeping of assets) risk: The Fund and its assets may experience material losses as a result of technology/system failures, cybersecurity breaches, human error, policy breaches and/or incorrect valuation of units.
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Securities lending risk: If a Portfolio lends securities, it takes on counterparty risk with respect to the borrower as well as the risk that any collateral from the counterparty may prove insufficient to cover all costs and liabilities incurred.
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Small/mid-cap equities risk: Equity securities (primarily stocks) of small and mid-size companies can be more volatile and less liquid than equities of larger companies. Small and mid-size companies often have fewer financial resources, shorter operating histories and less diverse business lines and as a result can be at greater risk of long-term or permanent business setbacks. Initial public offerings (IPOs) can be highly volatile and can be hard to evaluate because of a lack of trading history and relative lack of public information.