AB International Health Care Portfolio

• Offers investors durable long-term growth potential by investing in well-managed global healthcare companies
• Innovation in data, drugs and equipment will help shape future trends and new cures from colds to cancer
• Companies that can benefit from government healthcare policy and help reduce costs in the overall system should also be long-term beneficiaries

• We seek to invest in the very best businesses using in-depth research and analysis
• These businesses have high or improving returns on capital and strong reinvestment rates
• Instead of trying to predict medical science or research results, we focus on the business. This is the key to generating successful investment outcomes, in our view

• The healthcare sector has defensive characteristics and is less exposed to the macro environment
• Portfolio risk is balanced around multiple companies, as opposed to targeting only a few stocks with extreme individual return potential
• We aim to reduce downside risk and capture the upside in rising markets, seeking consistent long-term returns through changing market conditions

Many of today’s scientific realities were just dreams two decades ago. Gene sequencing, robotic surgery and visualization are now creating exciting investment opportunities. DNA sequencing could unlock greater insights into how to develop better drugs and diagnostics. Robotic surgery drives efficiency through faster recovery times and lower complication rates. More connected medical technology provides patients with better access to care and lower costs.

Some healthcare companies have relied too much on price rises for earnings growth, which has created a vulnerable business model when compared with other sectors. Technology companies, for example, cannot raise the price of one of their older phone or television models, but that’s what happens in the pharmaceutical market. Growing pressure on costs to consumers will create opportunities for companies that can provide more added value at lower costs.

Healthcare is benefiting from long-term, structural growth around the world. As emerging markets become wealthier, people and governments spend more on medical services, technologies and public wellness. Companies that can deliver products and services to help countries improve their healthcare performance should benefit from rising demand that fosters sustainable growth.