June 2005
Mutual Fund Expense Information
on Quarterly Shareholder Statements
You may have noticed that beginning with your March 31 quarterly statement from AllianceBernstein, two new
sections have been added. We wanted to let you know that this change was made to help you better assess the
ownership costs associated with your AllianceBernstein investments. This change is part of our ongoing effort to
provide full disclosure of fund information based on new client communications initiatives at our firm, along with
new regulatory requirements.
It is important to note that these types of fees and expenses are not new—they are typical costs of operating a
mutual fund. These fees and expenses are not additional—no payment from you is required. In fact, all mutual
funds have fees and expenses which are reflected in a mutual fund’s price (they are not charged to your account
directly). These fees and expenses, which are outlined in each Fund’s prospectus, cover costs such as research,
trading, record keeping services, web site services, toll-free phone lines, legal, and accounting—all necessary
requirements for operating a mutual fund.
The two new sections of your statement are:
1) The “Current Expense Summary” section which displays:
> Each fund name, fund number, account number
> Annual expense ratio of each fund owned
> Quarterly fees
> Ending value of each of the funds owned (as of the end of the quarter)
2) The “Hypothetical Expense Summary” section which displays:
A dollars-and-cents example of a hypothetical investment, and details its hypothetical returns, both
before and after expenses. Keep in mind that a fund’s returns are always stated after expenses.
REMEMBER: these expenses are not new. All mutual fund shareholders, including AllianceBernstein shareholders, are charged fees and expenses. We are now displaying them on your quarterly statement, so you can easily
compare the costs of one fund to another.
Important Notes Regarding Expenses
> Fees and expenses are not new.
> Expenses are reflected in the fund’s price and are not charged to a client’s individual
account directly.
> Operating expenses include all of the normal costs of running a mutual fund (payment
to managers, maintaining phone lines, mailing prospectuses, etc.).
> Expenses can vary by Share Class (e.g., A, B, C).
> Funds that focus their investments on a particular industry sector generally have higher
expense ratios than general equity funds, which, in turn, generally have higher expense
ratios than bond funds. International funds generally have higher expense ratios than
comparable domestic funds.
> Fees and expenses fluctuate over time and may be higher or lower than estimates shown.
> Keep in mind that a fund’s returns are always stated after expenses.
> If your AllianceBernstein Fund shares are held in a brokerage account, your statement
may not be issued by AllianceBernstein, but rather by the brokerage firm, and therefore
may not show fund fees and expenses. Deciding what information to include on statements is at the discretion of the issuing firm.
Understanding Your New AllianceBernstein Account Statement
The Current Expense Summary section
This section lists: the fund names, fund numbers, account numbers, annual expense ratios, quarterly fees and
ending value for each fund you own as of the end of the quarter.
To help you understand the calculations used in the “Current Expense Summary”, AllianceBernstein Balanced
Wealth Strategy Class A shares will be used as an example.
Current
Expense
Summary
Fund Name
ALLIANCEBERNSTEIN
BALANCED WEALTH STRATEGY A
Fund/Account Number
Annual
Expense Ratio
Your Quarterly
Fees
Ending Value
03/31/05
555555555555
1.07%
$66.87
$25,000
Please note that the Annual Expense Ratio for this fund is 1.07%.
In reporting the figure in the Your Quarterly Fees column, the Annual Expense Ratio is divided by 4 (representing each calendar quarter) and then multiplied by the Ending Value.
In this case, 1.07% (.0107) is divided by 4 = .002675 to determine the applicable Quarterly Rate.
The $25,000.00 (Ending Value) is then multiplied by .002675 (Quarterly Rate) which = $66.87 (Your Quarterly
Fees).
Important: The above representation of applied expenses illustrates the Ending Value of Balanced Wealth
Strategy Class A shares, after factoring in the rate of return since the last statement net of
applied expenses.
Definitions:
> Annual Expense Ratio represents the Fund’s annual operating expenses shown in its most current financial
report, net of any applicable fee waiver and/or expense reimbursement.
> Your Quarterly Fees reflects the approximate fees and expenses your Fund investment incurred over the quarter, assuming that your Ending Value was held for the entire quarter. It does not take into account any initial or
contingent deferred sales charges on redemptions. Your actual fees and expenses may be higher or lower.
> Ending Value is the value of your account as of the date indicated.
Understanding Your New AllianceBernstein Account Statement
The Hypothetical Expense Summary section
This hypothetical example was created to show you the impact of fees and expenses on your investment over a
10-year period. This section assumes a $10,000 investment into a given fund held for a 10-year period and a hypothetical 5% rate of return each year.
To help you understand the calculations used in the “Hypothetical Expense Summary”, AllianceBernstein
Balanced Wealth Strategy Class A shares will be used as an example.
Hypothetical
Expense
Summary
The following chart illustrates the hypothetical Fees and Expenses for
Annual Expense Ratio
ALLIANCEBERNSTEIN BALANCED WEALTH STRATEGY CLASS A SHARES
1.07%
Year
1
2
3
4
5
6
7
8
9
10
Total
Hypothetical
Investment
Hypothetical
Performance Earnings
Investment
After Returns
Hypothetical
Expenses
Hypothetical
Ending Investment
$10,000.00
$10,387.65
$10,790.33
$11,208.61
$11,643.12
$12,094.46
$12,563.30
$13,050.32
$13,556.22
$14,081.72
$500.00
$519.38
$539.52
$560.43
$582.16
$604.72
$628.17
$652.52
$677.81
$704.09
$5,968.79
$10,500.00
$10,907.03
$11,329.84
$11,769.05
$12,225.27
$12,699.18
$13,191.47
$13,702.84
$14,234.03
$14,785.81
$112.35
$116.71
$121.23
$125.93
$130.81
$135.88
$141.15
$146.62
$152.30
$158.21
$1,341.19
$10,387.65
$10,790.33
$11,208.61
$11,643.12
$12,094.46
$12,563.30
$13,050.32
$13,556.22
$14,081.72
$14,627.60
Please note that the Annual Expense Ratio for this fund is 1.07%.
In this example, an account is opened with $10,000. It is assumed that the current Annual Expense Ratio stays
the same throughout the 10-year period and that all dividends and distributions are reinvested. It does not take
into account any initial or contingent deferred sales charges on redemptions. Your actual fees and expenses may
be higher or lower.
In Year 1, the Hypothetical Performance Earning is $500, which is based on the original $10,000 investment, plus
the 5% rate of return, resulting in Investment After Returns of $10,500. This amount is then multiplied by
the Annual Expense Ratio of 1.07% (.0107) to determine the Hypothetical Expenses for the year which = $112.35.
Finally, the $112.35 is deducted from the $10,500 to determine the Hypothetical Ending Investment of $10,387.65.
This figure represents a hypothetical estimate of investment results less any expenses.
The above example outlines this same scenario over each year of a 10-year period and shows cumulative totals
after the 10-year period. Keep in mind that a fund’s returns are always stated after expenses.
Definitions:
> Annual Expense Ratio represents the Fund’s annual operating expenses shown in its most current financial
report, net of any applicable fee waiver and/or expense reimbursement.
> Hypothetical Investment is the investment amount at the beginning of each year, after the 5% return and minus
any fees.
> Hypothetical Performance Earnings represent the amount earned during the year at 5%.
> Investment After Returns are earnings, plus the initial investment.
> Hypothetical Expenses are estimated annual expenses based on the investment after returns and expenses.
> Hypothetical Ending Investment is the dollar amount of the investment after expenses.
Frequently Asked Questions About Mutual Fund Fees
1). How do these fees and expenses affect my account?
It’s important to note that no changes have been made to your account. Fees and expenses have been applied to your
account since you opened it. Mutual fund shares are not removed from your account to cover any fees and expenses,
nor are you required to forward any additional money to us. All mutual fund shareholders incur fees and expenses,
which are reflected in the net asset value (NAV) price of a fund.
2). Have these fees and expenses been applied to my account before?
Yes. Fees and expenses are not new—they have been applied to your account since you opened it, but the expense
ratios may have been different.
3). Why is this information being included now?
It is part of our ongoing effort to provide full disclosure of fund information based on new firm initiatives and
regulatory requirements. We have included this information to help you to assess the costs associated with your
AllianceBernstein investment.
4). Do the fees and expenses impact my share balance?
The fees and expenses are reflected in the net asset value (NAV) of the fund. Mutual fund shares are not removed
from your account to cover the fees and expenses.
5). Will this information be provided on future statements?
Yes. Going forward, quarterly statements will detail quarterly fees, which reflect the approximate fees and expenses
your Fund investment incurred over the quarter, as well as quarterly expense information and hypothetical expense
summaries.
6). Do all mutual funds charge fees?
Yes, all mutual fund companies charge fees and expenses. Annual fund operating expenses reflect the normal costs
of operating a mutual fund. Unlike transaction fees, these expenses are not charged directly to an investor, but are
deducted from fund assets before earnings are distributed to shareholders.
7). Why do mutual funds charge fees, and how are the fees used by the fund?
The fees you pay help cover the costs of managing the fund’s portfolio of securities. They also are used to pay for
producing account statements, computerized account services, recordkeeping, legal services, printing, and mailing. Some fees may also compensate a financial advisor for his or her services.
8). What is an expense ratio?
A fund’s expense ratio is its total annual fund operating expenses as a percentage of the fund’s assets. This includes
management fees, 12b-1 fees, the cost of shareholder mailings, and other administrative expenses.
9). How do fees affect returns on my mutual fund?
The fees you pay for owning a mutual fund will reduce your return from the fund. Before investing, you should
review a fund’s prospectus carefully and decide if this cost is acceptable to you. And, it’s a good idea to check your
fund’s fees when you review an investment you already have made. Keep in mind that a fund’s returns are always
stated after expenses.
10). What are the main types of mutual fund fees?
Even if you do not memorize the name of every mutual fund fee, you should understand what you are paying
for. Even more important, you should understand that the amount you pay in fees affects the return on your
investment. Mutual fund fees generally fall into two categories. Both categories, “shareholder fees” and “annual
fund operating expenses,” are disclosed in the fee table in the front of a fund’s prospectus. (See question and
answer #11 for more details regarding these fees and expenses.)
11). How do I read a fee table in a fund prospectus?
The fee table is the key to helping you understand fees. This standardized table is always near the front of a fund’s
prospectus and lists all fees charged by a fund. Reading the fee table allows easy comparison of the costs of one
fund versus another. Every fee table is broken into two sections. The first section describes “shareholder fees”
which are the fees paid directly from your investment—any sales charges or transaction fees you will pay when
you buy, sell, or exchange your shares. The second section describes “annual fund operating expenses” and lists all
of the ongoing fees you will pay each year for as long as you own shares in the fund. The fee table also includes a
hypothetical example that tells you in dollars and cents what a $10,000 investment would cost based on a 5 percent
return.
12). Do I have a choice in how I pay for my fund investment?
Yes. Mutual funds offer different pricing arrangements to meet the needs of different investors. Many mutual
funds make this possible by offering investors various “classes” of shares, which have different front-end or contingent deferred sales charges and distribution fees. Share classes represent ownership in the same mutual fund
but offer investors a choice in how to pay for the fund. Share class names vary depending on the fund. You should
review a fund’s share classes to determine which option is right for you. Your professional financial adviser or
broker is responsible for recommending the share class most suitable for you. While fund expenses may vary by
class of share, each class does, in fact, have expenses reflected in its net asset value.
13). How can I estimate how much I will pay in fees?
There are a number of ways to assess fund fees:
> Ask your financial advisor.
> Visit www.alliancebernstein.com and use the Mutual Fund Fees and Expenses Calculators.
This feature offers both Current Investment and Hypothetical Fee and Expense calculation
capabilities.
> Refer to your fund’s prospectus. Every fund prospectus includes a fee table and an example showing the
dollar amount of expenses on a $10,000 investment that earns 5% over various time periods, listed in 1-, 3-,
5-, and 10-year increments. Remember that this amount will not reflect what you will actually pay, (except
in the unlikely event that you invest exactly $10,000 and your investment earns exactly 5%) but can be a
useful way for you to compare the effect of the overall fees on different funds. Prospectuses are mailed to
you each year and can also be accessed on our web site at www.alliancebernstein.com.
14). How can I learn which fees a fund charges?
Mutual fund fees are subject to exacting regulatory standards and disclosure requirements. You can easily learn
which fees your fund charges by looking at the fee table near the front of the fund’s prospectus, which can be secured directly from the fund company or, in many cases, by visiting the fund’s web site. AllianceBernstein’s web
site address is www.alliancebernstein.com.
15). Should I consider fund fees in making my investment decision?
Yes. Fund fees are one of many important elements that should be considered when you are making a decision
about whether to purchase a particular fund. It is important to remember that a fund’s fees and expenses represent
the cost you will incur for the services that you receive from the fund. You also need to consider the fund’s investment objective, policies, and its risks.
16). Does anyone oversee the fees a fund charges?
Yes. The fees you pay as a mutual fund shareholder are subject to ongoing oversight and review by the fund’s board
of directors, including its independent directors. Directors have a responsibility under the law to protect the interests of shareholders. A majority of a fund’s board generally consists of directors who are independent of the fund’s
adviser. A mutual fund’s directors, including the fund’s independent directors, annually review the fees paid to
manage the fund. Any change in these fees must be approved by holders of the majority of a fund’s shares and
a majority of the fund’s directors.
17). Why doesn’t my statement include this new mutual fund expense information?
If your AllianceBernstein Fund shares are held in a brokerage account, your statement may not be issued by
AllianceBernstein, but rather by the brokerage firm. Deciding what information to include on statements is at the
discretion of the issuing firm.
For more information, call your Investment Advisor,
or call AllianceBernstein at (800) 221-5672.
AllianceBernstein Investment Research and Management Inc., member NASD.
Investment Products Offered:
• Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed
EXPENSESQ&A0505