ACMBernstein— Euro High Yield Portfolio

March 2014
ACMBernstein—
Euro High Yield Portfolio
Stable Income 2014
Jorgen Kjaersgaard, Portfolio Manager—European Credit
This document is delivered to you by ACMBernstein GmbH. ACMBernstein GmbH acts as tied agent within the meaning of § 2 (10) of the German Banking
Act (KWG) under the liability of AllianceBernstein Limited, 50 Berkeley Street, London W1J 8HA, a company registered in England under company number
2551144. AllianceBernstein Limited is authorized and regulated in the UK by the Financial Conduct Authority (FCA – Reference Number 147956). This
information is directed at Professional Clients only. It is provided for informational purposes only and 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 AllianceBernstein's internal forecasts and
should not be relied upon as an indication of future market performance. Past performance is no guarantee of future returns. This information is not intended
for public use.
©2014 AllianceBernstein
The Recovery in Europe Will Continue in 2014: Albeit at a Slow Pace
ACMBernstein’s Forecast for 2014 Euro Area Growth is 1%
Euro Area Real GDP Growth
1.5
1.0
Core
0.5
Percent
0.0
–0.5
Eurozone
–1.0
Periphery
–1.5
–2.0
–2.5
–3.0
–3.5
1Q:01
2Q:02
3Q:03
4Q:04
1Q:06
2Q:07
3Q:08
4Q:09
1Q:11
2Q:12
3Q:13
As of December 31, 2013
ACMBernstein.com
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EHY 4Q:13
1
Low Default Rates Are Expected to Continue into 2014
European High Yield Default Rates
14
Default Rate (Percent)
12
10
8
6
4
Forecast
2
0
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
Past analysis and forecasts do not guarantee future results. Historical information provided for illustrative purposes only.
As of 28 February 2014
Default rates for 1999–2012 are actual default rates from S&P, countries including Austria, Belgium, Bulgaria, Channel Islands, Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and
the UK. Default rate for 2013 and 2014 are ACMBernstein forecast.
Source: Standard & Poor’s and ACMBernstein
ACMBernstein.com
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EHY 4Q:13
2
Europe is in a Favorable Place in the Credit Cycle for Bond Investors
US Corporations—Shareholder Friendly Activities
Have Risen…
…While Europe Is Still in Deleveraging Mode
Net Leverage
1,000
900
4.5x
800
4.0x
M&A volumes have
moved meaningfully
higher in US vs. Europe
600
3.5x
500
2.5x
400
2.0x
300
1.5x
200
1.0x
100
0.5x
0
0.0x
US HY
US
3.0x
4Q03
2Q04
4Q04
2Q05
4Q05
2Q06
4Q06
2Q07
4Q07
2Q08
4Q08
2Q09
4Q09
2Q10
4Q10
2Q11
4Q11
2Q12
4Q12
2Q13
USD Billions
700
Europe
99 00 01 02 03 04 05 06 07 08 09 10 11 12
Euro HY
Historical data for illustrative purposes only.
M&A activity as of 30 June 2013. Net leverage as of 30 June 2013 for US HY and 31 March 2013 for Euro HY.
Source: Bloomberg, Company Filings, Morgan Stanley, MSCI and ACMBernstein
ACMBernstein.com
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EHY 4Q:13
3
2014 Opportunities: New Financial Issuance
Bank capital will be issued at a much stronger pace over the next two years as banks need to
reduce balance sheets and increase core capital to meet new capital requirements
250,000
 Transitioned from
fallen angels into
new issuance
200,000
150,000
Forecast
€ Million Amount Outstanding
300,000
100,000
50,000
Non Financials
0
 New issues likely
to be priced at
higher yields
Financials
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
08 to mid-12
Fallen angels
dominated financials
growth
Mid-12 onwards
New issuance
dominates growth in
financials
Historical analysis does not guarantee future results.
As of 28 February 2014
*Not all new bank issuances will be included in the index.
Based on the Euro High Yield Index
Source: Barclays and ACMBernstein
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EHY 4Q:13
4
Supportive Supply and Demand Dynamics
Sources of Supply and Demand
150,000
100,000
50,000
0
–50,000
–100,000
–150,000
2008
2009
■ New Issues
■ Fund Flows
2010
2011
2012
■ Fallen Angels
■ Redemption + Calls
2013
2014
■ Coupons
As of 28 February 2014
Sources (Coupons, Fund Flows, Redemptions + Calls) and Uses (Supply, Fallen Angels) of Investor Cash (€mn)
Source: BofA Merrill Lynch Global research
ACMBernstein.com
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EHY 4Q:13
5
The Market Is Growing, with an Increased Depth of Issuers
Euro High Yield Growth Is Expected to Continue
300
Strong Growth in the Number of High-Yield Companies
Issuing in Euro
Number of Issuers
248
Market Value € Billion
250
200
150
100
46
50
0
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Dec 99
Feb 14
Historical information provided for illustrative purpose only.
As of 28 February 2014
Based on the Barclays Euro High Yield 2% Constrained Index
Source: Barclays and ACMBernstein
ACMBernstein.com
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EHY 4Q:13
6
Diversification is Key, but in Newer and Smaller Markets It Can be a
Challenge
Currently, we see little value in the large issuers, instead we overweight the smaller names, but
small issuance sizes means we need more names in the portfolio
Avoiding the Large BB Issuers
Issuer
Italia Telecom
Fiat
Peugeot
ThyssenKrupp
Heidelberg
Cement
S&P Rating
Ba1/Ba2*
More Issuers and Smaller Issuers
Portfolio
Weight
Market
Weight
0.0%
5.8%
BB-
1.1
3.9
BB/BB-
1.1
3.6
BB
0.1
2.1
Ba2*
1.1
2.7
300
Average
Issue Size
250
Number of Issuers 650
(Left Scale)
625
600
200
575
150
550
525
100
500
50
475
450
0
Jan
12
Jun
12
Nov
12
Apr
13
Sep
13
Past analysis does not guarantee future results.
As of 28 February 2014
*Moody’s rating
Market weight based on Barclays Euro High Yield Index
Positioning for the Euro High Yield Portfolio
Source: Barclays and ACMBernstein
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EHY 4Q:13
7
2014 Opportunities: Security Selection Within Smaller Issuers
It is critical the investors do their homework before investing
Growing Gap Between Pricing of Small and Large Issuers*
B-Rated Issues with Maturities of 4.5 to 7 Years
400
300
Difference in OAS
200
100
0
–100
–200
–300
–400
2010
Small issuers getting
relatively cheaper
Small issuers getting
relatively less cheap
2011
2012
2013
Historical analysis does not guarantee future results.
As of 28 February 2014
*Based on the Barclays Euro High Yield Index. Smaller issues defined as amount outstanding at less than €300m and larger issues €300m or above.
Source: Barclays and ACMBernstein
ACMBernstein.com
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EHY 4Q:13
8
Using the Universe in a Smarter Way
Euro High Yield Universe
CCC NonFinancials
Yield: 6.68%
Financials—
Senior
Yield:
3.20%
B Non-Financials
Yield: 4.84%
BB Higher
Yielding NonFinancials
Yield: 4.73%
Financials—
Subordinated
Yield: 6.46%
BB Lower Yielding
Non-Financials
Yield: 2.74%
 Be smart about how you look at the universe, for
example subordinated financials offer twice the
yield of senior issues
 Also large differences when drilling into the BB part
of the universe
 Unattractive senior financials and lower yielding
BB’s represent 40% of universe…
 …but to avoid them you have to broaden your
universe, with increased flexibility and broad
research
Historical information provided for illustrative purpose only.
As of 31 December 2013
Based on the Barclays Euro High Yield 2% Constrained Index. Yields shown are yield-to-worst. Higher yielding BB represented by the issues with a yield-to-worst of more than 4%.
Source: Barclays and ACMBernstein
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EHY 4Q:13
9
Setting Your High Yield Exposure Up to Succeed
ACMBernsteins Euro High Yield Portfolio
Sector Allocation
In GBP
In EUR
A “traditional”
high yield
portfolio...
In USD
Other
12%
In EUR
…with a little
added flexibility
Non
Investment-Grade
Corporates
88%
Portfolio characteristics are subject to change.
Numbers may not sum due to rounding.
As of 28 February 2014
Data based on the Euro High Yield Portfolio and from a portfolio manager system (POINT).
Other sectors include IG Corporates 8%, securitized <1%, government bonds <1% and CMOs <1%. Excludes cash.
Source: ACMBernstein
ACMBernstein.com
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EHY 4Q:13
10
Rating Distribution: Positioning Dynamic and at Times Opportunistic
Euro High Yield Portfolio relative to benchmark
Investment Grade
Bonds with High
Yield Characteristics
High Conviction Single B/CCC Credits
Low Interest Rate Sensitivity:
■ Specific Parts of Capital Structure
15
10
5
Percent
0
–5
–10
–15
Larger BB-Rated Beta
Credits with
Stretched Valuations
–20
–25
–30
A and above
BBB
BB
B
CCC
CC
C
Below C
Past performance is no guarantee of future results. Ratings weightings will vary over time.
As of 28 February 2014
Data based on the Euro High Yield Portfolio and from an internal portfolio manager system (CRS).
Benchmark: Barclays Euro High Yield 2% Issuer Constrained Index
Credit quality breakdown is a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is highest (best) and D is lowest (worst). Where a bond is rated by
Standard & Poor’s (S&P), Moody’s and a third rating agency, which can vary by security currency, the rating is calculated as the middle of the three ratings assigned. If not, it is the worst of the S&P and
Moody’s ratings.
Source: Barclays and AllianceBernstein
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EHY 4Q:13
11
Euro High Yield: Rating Distribution Over Time
Euro High Yield: Exposures by Rating
Percent
100
80
60
40
20
0
Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13
AA
A
BBB
BB
B
CCC & Below
Not Rated
Ratings weightings will vary over time.
As of 28 February 2014
Based on the Euro High Yield Portfolio. Credit quality breakdown is a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is highest (best) and D is
lowest (worst). Where a bond is rated by Standard & Poor’s (S&P), Moody’s and a third rating agency, which can vary by security currency, the rating is calculated as the middle of the three ratings
assigned. If not, it is the worst of the S&P and Moody’s ratings taken from POINT.
Source: ACMBernstein
ACMBernstein.com
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EHY 4Q:13
12
Sector Positioning: Overweight Financials and Industrials
Euro High Yield Portfolio exposures versus index
Option Adjusted Spreads
30
Underweight senior: –5.2%
Overweight subordinated: +9.2%
25
Portfolio
Index
Lower Tier 2
306
374
Upper Tier 2
266
300
Tier 1
249
306
Percent
20
15
10
5
0
Banking Insurance
Basic
Capital
Goods
Cons.
Cyclical
Portfolio
Cons.
NonCyclical
Technology
Trans.
Comms
Utility
Index
As of 28 February 2014
Data based on the Euro High Yield Portfolio and from a portfolio manager system (POINT). Does not include all sectors.
Index: Barclays Euro High Yield 2% Issuer Constrained Index
Source: Barclays and ACMBernstein
ACMBernstein.com
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EHY 4Q:13
13
Spread Buckets: Searching for Value
Euro High Yield Portfolio exposures versus index
Portfolio Characteristics
Market Value (Percent) by Spread Bucket
OAS
Portfolio
Index
50–100
—
0.2
100–150
1.2
4.4
150–200
6.2
14.1
200–300
25.7
35.4
300–400
33.9
22.6
400–500
16.7
10.5
500–600
9.5
6.5
600–800
2.0
2.7
Avg. Quality
YTM
YTW
Duration
No. of Issuers
Portfolio
BB5.02%
4.48%
2.92 yrs.
225
Index
BB4.48%
3.58%
3.06 yrs.
248
Search
for
value
Past performance is no guarantee of future results. Ratings weightings will vary over time.
As of 28 February 2014
Data based on the Euro High Yield Portfolio and from a portfolio manager system (POINT). Does not include all sectors.
Index: Barclays Euro High Yield 2% Issuer Constrained Index
Source: Barclays and ACMBernstein
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EHY 4Q:13
14
ACMBernstein Euro High Yield: Risk-Adjusted Returns
Three Year statistics: ACMBernstein Euro High Yield vs. Mercer Insight Euro High
Yield Universe
2.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
–0.2
–0.4
–0.6
–0.8
–1.0
–1.2
11.5
2.4
11.0
2.0
10.5
1.6
10.0
1.2
9.5
0.8
9.0
0.4
8.5
0.0
8.0
–0.4
7.5
–0.8
7.0
–1.2
6.5
Ex Ret (Percent)
Std Dev (Percent)
IR
95th Percentile
2.3
11.1
1.4
Upper Quartile
0.7
9.8
0.4
Median
0.0
9.1
0.0
Lower Quartile
–0.3
8.2
–0.2
5th Percentile
–1.1
6.8
–1.1
Number
21
21
ACMBernstein EHY
21
Mercer Eurozone Fixed (Non-Gov.)(high Yield) universe
As of 31 December 2013
Based on the ACMBernstein Euro High Yield Composite; supplemental performance information
ACMBernstein Euro High Yield composite is benchmarked against the Mercer Insight Eurozone Fixed (Non-Govt) (High Yield) universe.
Source: Mercer Insight and ACMBernstein
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EHY 4Q:13
15
Euro High Yield Portfolio: Performance Summary
Periods Ended 28 February 2014
YTD
2014
One
Year
Five
Years
Since
Inception
9.90%
—
10.24%
Euro High Yield
2.06%
Lipper Global: Bond EUR High Yield
1.71
7.93
6.81
—
7.94
+0.35%
+3.76%
+3.09%
—
+2.30%
1st
1st
1st
Relative Performance
Lipper Peer Group Ranking (Quartile)
11.69%
Three
Years
1st
Past performance does not guarantee future results.
In euros
As of 28 February 2014
*Since inception. Inception date: Euro High Yield Portfolio (class A)—15 March 2010
Performance is represented by Class A shares and is calculated at NAV with all dividends reinvested. Performance for more recent periods may be different from that shown. Total returns,
provided by ACMBernstein , reflect the change in net asset value and assume reinvestment of any distributions paid on fund shares for the period shown, but do not reflect sales charges.
Accordingly, these figures do not represent actual returns to an investor. The investment return and principal value of an investment in the fund will fluctuate as the prices of the individual
securities in which it invests fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.
Lipper rankings are based on total returns at net asset value and do not include the effect of the fund’s maximum front-end sales charge for Class A shares. Results would have been less
favorable had sales charges been included. The fund is ranked within the Lipper Global Bond EUR High Yield universe, which includes funds that have generally similar investment objectives to
the Euro High Yield Portfolio. Rankings shown are for Class A shares only, although other share classes are available for which management fees and sales charges will differ and rankings may
vary. Investors can’t invest directly in indices or averages, and their performance does not represent the performance of any ACMBernstein mutual fund.
Source: Barclays, Lipper and AllianceBernstein
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EHY 4Q:13
16
The Opportunity in Summary
2014 is the start of a new environment
 The
beta play is fading, it’s time to focus to individual issuers
 Financials
 New
 We
will offer unique opportunities
entrants and smaller issuers are looking interesting
expect to generate 5%–8% in 2014
 Exciting
changes are about to take place, but you need a manager with capacity to take advantage
As of 28 February 2014
Source: AllianceBernstein
ACMBernstein.com
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EHY 4Q:13
17
European Income
ACMBernstein.com
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EHY 4Q:13
18
European Income Portfolio: Balancing Income and Return Potential
The Barbell Portfolio Structure
Higher Quality
High quality government,
government-related, securitized
and corporate debt
100%
High quality provides
stability in risk-averse
markets
Higher Yield
Investment-grade government,
government-related, securitized
and corporate debt
Sub-investment-grade, emergingmarket and other high-yielding
debt
High-yielding debt provides
income and potential for
capital appreciation
50%
0%
50%
Sector weightings will vary over time.
As of 28 February 2014
Source: AllianceBernstein
ACMBernstein.com
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EHY 4Q:13
19
European Income Portfolio: Performance Summary
Periods Ended 28 February 2014
YTD
2014
European Income
Portfolio
Lipper Global: Bond Europe
Relative Performance vs.
Peer Group
Lipper Global Bond Europe
Peer Group Ranking (Quartile)
2.11%
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
14.88%
5.28%
3.98%
6.81%
7.50%
1.80
3.67
4.44
5.34
3.13
3.62
+0.31%
+3.14%
+3.06%
+9.54%
+2.15%
+0.36%
2nd
1st
1st
2nd
1st
1st
Past performance does not guarantee future results.
In euros. Numbers may not sum due to rounding.
Inception date: European Income Portfolio (class A)—26 February 1999
*Fund benchmark is 65% Barclays Euro Aggregate, 35% Barclays Euro High Yield 2% Constraint
Performance is represented by Class A shares and is calculated at NAV with all dividends reinvested. Performance for more recent periods may be different from that shown. Total returns,
provided by ACMBernstein, reflect the change in net asset value and assume reinvestment of any distributions paid on fund shares for the period shown, but do not reflect sales charges.
Accordingly, these figures do not represent actual returns to an investor. The investment return and principal value of an investment in the fund will fluctuate as the prices of the individual
securities in which it invests fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.
Lipper rankings are based on total returns at net asset value and do not include the effect of the fund’s maximum front-end sales charge for Class A shares. Results would have been less
favorable had sales charges been included. The fund is ranked within the Lipper Global Bond Europe universe, which includes funds that have generally similar investment objectives to the
European Income Portfolio. Rankings shown are for Class A shares only, although other share classes are available for which management fees and sales charges will differ and rankings may
vary. Investors can’t invest directly in indices or averages, and their performance does not represent the performance of any ACMBernstein mutual fund.
Source: Barclays, Lipper and AllianceBernstein
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EHY 4Q:13
20
Attractive Income Distributions
European Income Portfolio A Share Class
4.39% Net Distribution Yield
0.07
In Euros
0.06
0.05
0.04
0.03
0.02
0.01
0
99
00
01
02
03
04
05
06
07
08
Monthly Income Distribution per Fund Unit (Left Hand Scale)
09
10
11
12
Percent
10
9
8
7
6
5
4
3
2
1
0
13
Annualized Distribution Yield
European Income Portfolio net distribution yield:
Euro investment-grade corporates gross yield:
Euro high yield gross yield:
4.39%
1.93%
4.21%
 Active sector allocation and security selection used to maintain attractive risk-adjusted income and total return
 Diversified credit portfolio actively managed to limit issuer specific credit risk

Over 200 distinct issuers
Past performance does not guarantee future results.
As of 31 December 2013. Net distribution yields are for the European Income Portfolio EUR A share class. Euro high yield and euro investment-grade corporate yields are yield-to-worst as
represented by the Barclays Euro High Yield and Euro Aggregate–Corporates indices.
Source: Barclays and AllianceBernstein
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EHY 4Q:13
21
Percent
European Income Portfolio: Performance Summary
50
40
30
20
10
0
–10
–20
–30
200
150
100
50
0
2000
2001
2002
2003
2004
Total Return—A Share Class (LHS)
Cummulative Return—A Share Class (RHS)
2005
2006
2007
2008
2009
2010
2011
2012
2013
Average Monthly Distribution Yield—A Share Class (LHS)
 Proven ability to generate attractive yield and long-term returns, even in challenging market environments
 Ability to deliver income distributions, even in negative markets
 Flexibility to allocate between sectors and between Investment Grade and High Yield is key to generating
returns and income
Past performance does not guarantee future results.
In euros. As of 31 December 2013
Data are preliminary; numbers may not sum due to rounding. Inception date: European Income Portfolio Class A—26 February 1999
Performance is represented by Class A shares and is calculated at NAV with all dividends reinvested. Performance for more recent periods may be different from that shown. Total returns,
provided by ACMBernstein, reflect the change in net asset value and assume reinvestment of any distributions paid on fund shares for the period shown, but do not reflect sales charges.
Accordingly, these figures do not represent actual returns to an investor. The investment return and principal value of an investment in the fund will fluctuate as the prices of the individual
securities in which it invests fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.
Source: AllianceBernstein
ACMBernstein.com
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EHY 4Q:13
22
Appendix
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
23
So…How Do I Access the Opportunity?
ACMBernstein is the perfect partner to help you access the opportunity
 Experience
team with proven track record
 Large
credit research team offering both breadth and depth and with specialized financial sector expertise
 Deep
understanding of large issuers in the index as well as the smaller names in the market
 Truly
diversified/unconcentrated portfolio to dampen volatility
As of 31 December 2013
Source: AllianceBernstein
ACMBernstein.com
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EHY 4Q:13
24
Euro High Yield Team: An Integrated Approach
Portfolio Management
Jorgen Kjaersgaard
Gershon Distenfeld, CFA
Portfolio Manager—European Credit
19 Years Experience
London
Director—High Yield
16 Years Experience
New York
+4 Other Portfolio Managers
Credit Research
Credit Trading
Quantitative Research
Jeff Skoglund, CFA
James Switzer
Ramu Thiagarajan
Director—Credit Research
22 Years Experience
New York
Director—Credit Trading
28 Years Experience
New York
Head—FI Quant. Research
23 Years Experience
New York
+18 High Yield Analysts
+2 Dedicated High Yield Traders
+2 Quantitative Analysts
Additional Portfolio and Client Service Resources
17 Credit Research Analysts
17 Traders
9 Structured Assets Research
9 Senior Portfolio Managers
5 Quantitative Research Analysts
9 Global Economists
Team members are subject to change.
As of 30 September 2013
Some individuals are members of multiple teams
ACMBernstein.com
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EHY 4Q:13
25
Global Credit Research Team
Jeff Skoglund, CFA
Director—Credit Research (22 years)
 UBS Investment Bank
 Merrill Lynch
 University of Michigan (MBA)
Americas
High Yield Industrials
Amy Judd
Senior Vice President (17 years)
UBS Investment Bank
Bear Stearns
Boston College (MBA)


Senior Advisor to Research (25 years)
J.P. Morgan
NYU Stern (MBA)



Senior Vice President (19 years)
Delaware Investments
GE Capital Services
NYU Stern (MBA)



Senior Vice President (24 years)
Halcyon Asset Management
Carlyle Group
New York University (JD/MBA)
Senior Vice President (13 years)
Barclays Capital
Lehman Brothers
University of Colorado (BS)

Assistant Vice President (5 years)
Hobart College (BA)



Assistant Vice President (10 years)
Fitch Ratings
M&T Bank
NYU Stern (MS)


Assistant Vice President (4 years)
Merrill Lynch
NYU Stern (BS)

Assistant Vice President (5 years)
New York University (BS)
Vice President (21 years)
Citadel Investment Group
The Boston Consulting Group
University of Michigan (MBA)
Team members are subject to change.
As of 30 September 2013
ACMBernstein.com
Yukiko Hanai



Senior Vice President (21 years)
Ernst & Young
Pioneer Research & Management
Keio University (Bachelor of Law)
Victoria Norman
Asian Industrials
Hojung Kang
Latin American Industrials
EEMEA Industrials and Banks
Vice President (13 years)
Credit Suisse
Wharton (U Penn) (MBA)



Vice President (12 years)
PIMCO
Allianz Asian Management
Korea University (MA)



Vice President (14 yrs)
Tokyo Star Bank
Seishin Shinkin Bank
University of Sheffield (UK) (MBA)


Vice President (7 years)
Citigroup Global Markets
UIBE (Beijing) (MBA)
Okan Akin, CFA
Thais Aleluia





Vice President (16 years)
Royal Bank of Scotland
J.P. Morgan
London School of Economics and Political Science
(MS)
Yasuyuki Mochizuki
Jenny Zeng, CFA
W. European Industrials
Stephanie Foster



Senior Vice President (22 years)
Andersen Consulting
HSBC
Loughborough University (BSc)



Vice President (11 yrs)
Deutsche Bank
Rabobank
University of Chicago (MBA)
Saul Casadio
Julie Pearson, CFA



Assistant Vice President
Citigroup
UBS Investment Bank
Boston College (BS)

Research Associate
Carnegie Mellon University (BS)
Patrick O’Connell
Research Associate
UBS Investment Bank
Merrill Lynch
Villanova University (BS)
Vice President (22 years)
Threadneedle Investment Services
Fidelity Investments
University of East Anglia (BSc)
Christopher Chu
Jackie August, CFA






Timothy Wong
Associate Analysts
Assistant Vice President
Duke University (BA)
Senior Vice President (19 years)
Fitch IBCA
University of Southampton (BSc, MSc)
Connie Chan
Vice President (9 years)
J.P. Morgan
Syracuse University (BS)

Developed and EM Financials
Kimberly Chan
Kevin Tomassetti, CFA




Vice President (15 years)
PaineWebber
Columbia University (MBA)
Vice President (11 years)
BlueMountain Capital Management
Banc of America Securities
NYU Stern (MBA)
Robert Schwartz



Vice President (15 years)
Credit Suisse
UBS Investment Bank
University of Toronto (MBA)
John Colan
Devin Nomellini, CFA








Susan Hutman
Petter Stensland, CFA



Vice President (8 years)
Rutgers University (BA)
Asia
Steve Hussey
Shrut Vakil, CFA

Thomas Socha
Janegail Orringer
Financials
Financials
Investment Grade Industrials
Robert Hopper



Europe
Pushpendra Gautam
Sean Kennedy


Research Associate
Nomura Securities
Carnegie Mellon University (BS)

Rotating Associate
Villanova University (BA)
Aristaia Vasilakis
Daniel Norman
Associate Analyst
Research Associate
Dedicated High Yield Analysts
Crossover Analysts
Senior High Yield Analysts Average 16 Years of Experience
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
26
ACMBernstein High Yield Credentials
Over 40-years’ experience managing fixed-income strategies
$250 billion fixed income assets under management
Dedicated high-yield strategies since 1987
$37 billion in high-yield strategies globally, including $7 billion in euro high yield*
Consistent strong performance
 ACMBernstein
Global High Yield Portfolio—1st quartile over 5 and 10 years
 ACMBernstein
Euro High Yield Portfolio—1st quartile over 1 and 3 years, and since inception
Past performance does not guarantee future results.
As of 31 December 2013
*As of 30 September 2013, includes dedicated high-yield portfolios and high-yield component s of multi sector portfolios.
Global High Yield Portfolio performance ranking refers to the A share class and the Lipper Global Bond Global High Yield Peer Group. Euro High Yield Portfolio performance ranking refers to the A
share class and the Lipper Global Bond EUR High Yield Peer Group. Lipper rankings are based on total returns at net asset value and do not include the effect of the funds’ maximum front-end
sales charge for Class A shares. Results would have been less favorable had sales charges been included. The funds are ranked within the Lipper universes mentioned above, which includes
funds that have generally similar investment objectives to the AllianceBernstein funds. Rankings shown are for Class A shares only, although other share classes are available for which
management fees and sales charges will differ and rankings may vary. Investors can’t invest directly in indices or averages, and their performance does not represent the performance of any
AllianceBernstein mutual fund.
Source: Lipper and AllianceBernstein
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
27
Euro High Yield Portfolio
Objective


Investment Strategy
Key Investment Guidelines*
Investment Universe








To provide a high total investment return through a combination of income and capital appreciation
The fund seeks to meet its objective through top-down and bottom-up credit decisions specifically overall market
exposure and sector and security selection. These investment decisions are derived through the combination of
quantitatively and fundamentally driven analysis
+/–10% of benchmark’s interest-rate duration
Minimum two-thirds of the portfolio allocated to corporate bonds
Minimum 50% high yield
Maximum 20% emerging-market sovereign debt
Maximum 15% non-European currency exposure (EUR, GBP, CHF, NOK, SEK, DKK)
Derivatives may be used for both hedging and investment purposes
Max 10% in other UCITS or non-UCITs vehicles
The portfolio predominantly invests in high-yield securities (rated below investment-grade), and may also invest in
investment-grade issues from both developed and emerging markets
Barclays Euro High Yield 2% Constrained
Base Currency




Currency Hedged Share
Classes

Australian dollar, Swiss francs



Daily liquidity
Liquidity, Pricing and
Frequency of Distribution
Benchmark
Morningstar Peer Group
Fund Inception Date
Bond EUR High Yield
15 March 2010
Euro
Single priced fund
Monthly distributions (distributing share classes)
Portfolio characteristics are subject to change.
As of 31 December 2013
*These are internal investment guidelines and not shown in the prospectus, and are therefore subject to change without notification. We do not show the entirety of the fund’s investment
guidelines.
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
28
Euro High Yield Portfolio Characteristics:
Sector and Credit Quality
Sector Allocation
Quality Distribution*
Covered Bonds
<1%
Sovereign Agencies
<1%
EM Corporate Bonds
2%
CCC & Below
8%
AA A NR
3% 1% <1%
BB
41%
BBB
12%
IG Corporates
12%
Non-IG Corporates
85%
B
35%
Portfolio Characteristics
Duration 2.92 Years
Portfolio characteristics are subject to change.
Numbers may not sum due to rounding.
As of 31 January 2013
*As of 28 February 2014
Credit quality breakdown is a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is highest (best) and D is lowest (worst). the index rating (average) of
the available Standard & Poor’s (S&P), Moody’s and Fitch ratings is used.. The Not Rated category includes bonds that are not rated by a Nationally Recognized Statistical Rating Organization.
Source: AllianceBernstein
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
29
Euro High Yield Portfolio Characteristics:
Country and Currency
Country Allocation
Currency Distribution
Other
13%
Italy
15%
Portugal
5%
Luxembourg
6%
France
15%
US
6%
Euro
100%
Netherlands
7%
Spain
7%
UK
15%
Germany
12%
All portfolio characteristics are subject to change.
Numbers may not sum due to rounding.
As of 31 December 2013
Source: AllianceBernstein
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
30
Dynamic Investment Process
Translates research into client portfolios
Research
Research Review
Portfolio Construction
Client
Objectives
 Rates and Currencies
Quantitative
 Risk Budgeting
 Credit
 Emerging Markets
Fundamental
 Securitized Assets
 Municipals
ACMBernstein.com

Country/Yield Curve

Sector Allocation

Security Selection

Currency
Client
Portfolio
 Active Risk
Management
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
31
Key Risks—Rising Default Rates or Yields?
Understanding Duration Risks is key—mathematical vs. empirical
Yield Change
(Basis Points)
Total Return
0
20
40
60
80
100
120
2.0
5.6
5.1
4.7
4.2
3.8
3.3
2.9
Default Rate (Percent)
2.5
3.0
5.2
4.9
4.8
4.4
4.3
4.0
3.9
3.6
3.4
3.1
3.0
2.7
2.6
2.3
3.5
4.6
4.1
3.7
3.2
2.8
2.4
1.9
4.0
4.2
3.8
3.3
2.9
2.5
2.0
1.6
Significantly weaker European growth
leading to rising defaults, but positive absolute
returns remain in place
Strong growth
Significant monetary tightening/rise in yields,
but positive absolute returns…
= base case
Difference vs. Base Case
Default Rate (Percent)
Compare this to a 5-year German Govt. Bond
(OBL 0.25% 4/18) which would return –5.5%
Yield Change
(Basis Points)
2
0
20
40
60
80
100
120
–0.5
–0.9
–1.4
–1.8
–2.3
–2.7
2.5
–0.4
–0.8
–1.3
–1.7
–2.2
–2.6
–3.0
3
–0.7
–1.2
–1.6
–2.0
–2.5
–2.9
–3.3
3.5
–1.0
–1.5
–1.9
–2.4
–2.8
–3.2
–3.7
4
–1.4
–1.8
–2.3
–2.7
–3.1
–3.6
–4.0
For illustrative purposes only. Past analysis does not guarantee future results.
As of 30 September 2013
Euro High Yield Single B 1 year Default Rate and Yield Change Total Return
Source: Deutsche Bank
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
32
Not All Durations Are Created Equally
Bonds with Higher Yield Spreads Are Historically Less Sensitive to Rate Changes
Corporate Bond Yield Spreads and Duration
10
Stated Duration of Bond
8
Duration (Years)
6
More Sensitive to
Change in Interest Rates
Less Sensitive to
Change in Interest Rates
4
2
0
–2
Experienced Duration of Bond
–4
–6
50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000
Spread (Basis Points)
For illustrative purposes only. Past performance and current analysis do not guarantee future results.
As of 31 December 2013
The display shows the hypothetical duration of a 10-year corporate bond held to duration adjusted for spread. Empirical duration is estimated on the actual and historical 10-year corporate bond
performance data. We use a three-factor model (based on option adjusted spread, currency and spreads) to estimate the performance of corporate bonds in rising interest rate environments.
Duration is a measure of the sensitivity of an asset’s or portfolio’s price to interest-rate movements.
Source: AllianceBernstein
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
33
High Yield Platform: Global, Regional and Specialized Solutions
Investment Universe/
Geography
Portfolio
Description
Global High Yield Portfolio
Global, multi sector, high-yield portfolio that seeks to produce high current
income as well as overall total return by investing in higher-yielding bonds,
including high-yield corporate bonds, securitized bonds and
emerging-market bonds
Euro High Yield Portfolio
Euro high yield corporate bond fund
US High Yield Portfolio
US high yield corporate bond fund
Short Duration High Yield
Portfolio
Conservatively positioned global high yield corporate bond fund that
excludes CCC and lower-rated bonds,* maintains an average duration of
less than four years and utilizes hedging techniques to manage downside
volatility
Portfolio characteristics are subject to change.
As of 31 December 2013
The sale of ACMBernstein funds may be restricted or subject to adverse tax consequences in certain jurisdictions. This information is directed solely at persons in jurisdictions where the funds and
relevant share class are registered or who may otherwise lawfully receive it. Before investing in AllianceBernstein funds, investors should review the fund's full prospectus, together with the fund’s
Key Investor Information Document and the most recent financial statements. Copies of these documents, including the latest annual report and, if issued thereafter, the latest semi-annual report,
may be obtained free of charge from AllianceBernstein (Luxembourg) S.A.R.L., by visiting www.alliancebernstein.com or by contacting the local distributor in the jurisdictions in which the funds are
authorised for distribution.
*A measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition as rated by Moody’s (Caa1 or below), Standard & Poor’s (CCC+ or below) or Fitch (CCC or
below). AAA is highest (best) and D is lowest (worst).
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
34
ACMBernstein Fixed Income Luxembourg Funds:
Structured to Capitalize on Global and Regional Opportunities
High Yield Credit
Emerging Market Debt
Income Suite
 Global High Yield
 Emerging Markets Debt
 Global High Yield
 Short Duration High Yield
 RMB Income Plus
 American Income
 Euro High Yield
 RMB Income Plus II
 European Income
 Asia–Pacific Income
 RMB Income Plus
 Emerging Market Local Currency Debt
 RMB Income Plus II
 Emerging Market Corporate Debt
 Asia-Pacific Income
Global Fixed Income
Other
 Global Plus Fixed Income
 Diversified Yield Plus*
 Global Bond
 Unconstrained Bond
We also offer a broad range of currency hedged share classes for many of our services
As of 31 December 2013
*Only available through an institutional share class
The sale of ACMBernstein funds may be restricted or subject to adverse tax consequences in certain jurisdictions. This information is directed solely at persons in jurisdictions where the
funds and relevant share class are registered or who may otherwise lawfully receive it. Before investing in AllianceBernstein funds, investors should review the fund's full prospectus, together with
the fund’s Key Investor Information Document and the most recent financial statements. Copies of these documents, including the latest annual report and, if issued thereafter, the latest semiannual report, may be obtained free of charge from AllianceBernstein (Luxembourg) S.A.R.L., by visiting www.alliancebernstein.com or by contacting the local distributor in the jurisdictions in
which the funds are authorised for distribution.
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
35
ACMBernstein Fixed Income Fund Offerings: Overview
Global Bond
Global Plus Fixed Income
Unconstrained Bond
Global High Yield
Euro High Yield
Short Duration High Yield
Emerging Markets Debt
Emerging Market Local Currency Debt
Primary
Exposure
Min. Credit Quality*
Fund
Structure
Benchmark
Global multi-sector, core/IG only
BBB–
FCP
Barclays Global Treasury 1–3 Year (Hedged)
Global multi-sector, core plus with
up to 20% sub-IG
—
SICAV
Barclays Global Aggregate (Hedged)
Global, multi-sector, absolute return
Max 50% below
investment-grade
SICAV
B0fA ML 3-month T-Bill
Global multi sector with
high income focus
—
FCP
33% Barclays High Yield 2% Cons.,
33% J.P. Morgan EMBI Global,
33% J.P. Morgan GBI
Euro high yield corporate bonds
—
SICAV
Barclays Euro High Yield 2% Cap.
Conservatively positioned global high yield corporate
bonds
B–
SICAV
Barclays Global High Yield Corporate
1–5 year Ba/B
Hard and local currency emerging market bonds
—
FCP
J.P. Morgan EMBI Global
Local Currency Emerging Market Bonds
—
SICAV
J.P. Morgan GBI-EM Global Diversified
Emerging Market Corporate Bonds
—
SICAV
J.P. Morgan CEMBI Broad Diversified
RMB Income Plus
Asian multi-sector with
RMB currency exposure
Max 50% below
investment-grade
SICAV
No benchmark
RMB Income Plus II
Asian multi-sector with
RMB currency exposure
Max 50% below
investment-grade
SICAV
No benchmark
Asia-Pacific Income
Asian multi-sector with
Asian currency exposure
Max 50% below
investment-grade
SICAV
HSBC Asian Local Bond Index (ALBI)
American Income
US multi-sector
Max 50% below
investment-grade
FCP
50% Barclays Gov’t,
35% J.P. Morgan EMBI Global,
15% Barclays High Yield 2% Cons.
European Income
Euro multi sector
Max 50% below
investment-grade
FCP
65% Barclays Euro Aggregate,
35% Barclays Euro HY 2% Cons.
Emerging Market Corporate Debt
Portfolio characteristics subject to change.
As of 31 December 2013
The sale of AllianceBernstein funds may be restricted or subject to adverse tax consequences in certain jurisdictions. This information is directed solely at persons in jurisdictions where the funds and relevant
share class are registered or who may otherwise lawfully receive it. Before investing in AllianceBernstein funds, investors should review the fund's full prospectus, together with the fund’s Key Investor
Information Document and the most recent financial statements. Copies of these documents, including the latest annual report and, if issued thereafter, the latest semiannual report, may be obtained free of
charge from AllianceBernstein (Luxembourg) S.à r.l., by visiting www.alliancebernstein.com or by contacting the local distributor in the jurisdictions in which the funds are authorized for distribution. Credit
quality breakdown is a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is highest (best) and D is lowest (worst). Where a bond is rated by Standard
& Poor’s (S&P), Moody’s and a third rating agency, which can vary by security currency, the rating is calculated as the middle of the three ratings assigned. If not, it is the worst of the S&P and Moody’s
ratings.
Source: AllianceBernstein
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
36
A Word About Risk
Market 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 (Small/Mid): 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
recommendations by AllianceBernstein. 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.
The value of an investment can down as well as up and investors may not get back the full amount invested. The sale of AllianceBernstein funds may be
restricted or subject to adverse tax consequences in certain jurisdictions. This information is directed solely at persons in jurisdictions where the funds
and relevant share class are registered or who may otherwise lawfully receive it. Before investing in AllianceBernstein funds, investors should review the
fund's full prospectus, together with the fund’s Key Investor Information Document and the most recent financial statements. Copies of these documents,
including the latest annual report and, if issued thereafter, the latest semi-annual report, may be obtained free of charge from AllianceBernstein (Luxembourg)
S.à r.l., by visiting www.alliancebernstein.com or by contacting the local distributor in the jurisdictions in which the funds are authorised for distribution.
AllianceBernstein® and the AB logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P.
©2014 AllianceBernstein L.P. www.alliancebernstein.com
IC2013470
ACMBernstein.com
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
EHY 4Q:13
37

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