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December 31, 2009
Capital Markets Outlook
New Landscape Generates Opportunities
The information herein reflects prevailing market conditions and our judgments as of the date of the presentation, which are subject to change. In preparing this presentation, we have relied
upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Opinions and estimates may be changed without
notice and involve a number of assumptions which may not prove valid. Neither this presentation nor any of its contents may be used for any purpose without the consent of
AllianceBernstein.
Investment Products Offered:
 Are Not FDIC Insured
 May Lose Value
 Are Not Bank Guaranteed
Introduction
 The markets have responded to continued signs of economic recovery
 As governments begin the process of withdrawing monetary and fiscal
stimulus, risks remain regarding timing and execution
 New global economic patterns have emerged in the wake of the
financial crisis
 Identifying companies and industries that will benefit from these
changes creates opportunities for active managers
AllianceBernstein.com
1
Equities and Credit Sharply Higher in 2009…
Returns in USD
4Q:2009 Returns
Equities
8.5%
6.0%
EM
US
“Safe” Assets
Credit
2.2%
EAFE
5.2%
3.3%
2.4%
1.5%
Global US Emerging Global
High CMBS Market Corp
Yield
Debt
0.6%
Japan
Gov’t
-0.1%
-1.3%
Euro
Gov’t
US
Gov’t
2009 Returns
78.5%
57.7%
26.5% 31.8%
28.5% 34.2%
16.6%
1.4%
4.1%
-3.6%
Past performance does not guarantee future results.
As of December 31, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Bloomberg, Barclays Capital, MSCI, S&P and AllianceBernstein
AllianceBernstein.com
2
…in Response to an Improved Economic Outlook
AllianceBernstein Real GDP Forecasts
6.4%
3.5%
3.5%
2.4%
1.9%
1.0%
-2.5%
-2.3%
-3.9%
-5.4%
Global
Japan
2009E
Euro Area
US
Emerging
Countries
2010F
Current estimates and forecasts may not be attained.
As of January 4, 2010
Source: AllianceBernstein
AllianceBernstein.com
3
Confidence, While Still Weak, Is Improving
G7 Confidence Measures
104
102
Consumer
Neutral
100
98
96
Business
94
92
90
00
01
02
03
04
05
06
07
08
09
Historical analysis does not guarantee future results.
As of September 30, 2009
Source: Organisation for Economic Co-operation and Development (OECD)
AllianceBernstein.com
4
Bank Willingness to Lend Is Becoming Less Restrictive
Bank Willingness to Make Consumer Installment Loans
40
More Willing
Percent
20
0
-20
Less Willing
-40
-60
97
98
99
00
01
02
03
04
05
06
07
08
09
Historical analysis does not guarantee future results.
As of September 30, 2009
Source: Haver Analytics and US Federal Reserve
AllianceBernstein.com
5
Significant Fiscal Stimulus Remains in Pipeline
Fiscal Stimulus
100
Still to Come
Percent
80
60
40
Realized*
20
0
US
Total Stimulus
Approved:
“Realized” as
% of 2008 GDP:
China
US $787 Bil.
2.0%
US $790 Bil.
6.0%
Estimates and “Still to Come” stimulus subject to change.
As of December 31, 2009
*Includes realized tax cuts and amount paid out; China “realized” figure is an estimate.
Source: CEIC Data, Congressional Budget Office, Recovery Accountability and Transparency Board, US federal agency financial and activity reports, and AllianceBernstein
AllianceBernstein.com
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Inflation: Three Key Factors to Watch
Aggregate Demand
vs. Supply
Wage
Growth
Money and
Credit Growth
High
High
High
Medium
Medium
Medium
Low
Low
Low
Historical analysis does not guarantee future results.
Our framework marries the essential teachings about inflation from the major macroeconomic schools of thought with empirical evidence from a study of 180 countries over the past 40 years.
Among other things, the empirical analysis examined those periods when a country went from low inflation (0%–5%) to high inflation (10%+) over a five-year span. Of these periods, 100%
exhibited above-average money growth, 95% showed above-average wage growth and, qualitatively, 100% had aggregate demand exceeding aggregate supply.
Source: AllianceBernstein
AllianceBernstein.com
7
As Growth Accelerates, Interest Rates Should Rise
Nominal World GDP Growth and Official Interest Rate
10
GDP Growth
8
Percent
6
4
2
Official Interest Rate
0
-2
-4
97
98
99
00
01
02
03
04
05
06
07
08
09
10F
Historical analysis and forecasts do not guarantee future results.
Projections may not come to pass.
Historical data through September 30, 2009; forecasts through December 31, 2010
Official interest rate is a composite of 32 countries, including the developed economies and a sampling of emerging economies.
Source: Haver Analytics, various central banks and AllianceBernstein
AllianceBernstein.com
8
How Fast, and How Far?
Official Interest Rates
Percent
2003–2007
2009*
2010F*
6.7
6.0
5.3
4.7
3.4
2.8
2.3
2.0
1.0
0.2 0.1 0.1
Japan
Euro Area
2.0
0.3
0.5
US
UK
China
Historical analysis and forecasts do not guarantee future results.
Projections may not come to pass.
As of December 31, 2009
*At year-end; 2010 forecasts are AllianceBernstein’s.
Source: Bloomberg and AllianceBernstein
AllianceBernstein.com
9
Long-Term Budget Projections Tend
to Extrapolate Current Trends
US Federal Budget
US$ Billion
Projection
Made in
236
FY1990 1990 for
Actual FY2000
-221
-269
FY2000
Actual
444
126
FY2009
Actual
Projection
Made in
FY2009 2009 for FY2019
Actual FY2019* Actual
FY1999 Projection
Actual Made in
1999 for
FY2009
?
-722
-1,417
-1417
Historical analysis and future projections do not guarantee future results.
Projections may not come to pass.
As of December 31, 2009
*Assumes a baseline GDP growth of 2.5% over 10 years
Source: Office of Management and Budget
AllianceBernstein.com
10
Anxiety about the Future Obscures Opportunity
Anxiety
Opportunity
 US and other developed market
consumers are too indebted to
resume spending
 Growing middle class in emerging
markets are the key to consumption
growth
 The weak dollar is a sign of no
confidence in the US
 The falling dollar is part of a necessary
correction to an unhealthy imbalance
 Regulation and uncertainty will
stifle economic growth
 Innovation and productivity gains are
as strong as ever
AllianceBernstein.com
11
The US Is Not the Only Driver of Consumption
Emerging Markets’ Share of Global Real Consumption Growth
Percent of Total
46%
Latin
America
29%
Asia
ex Japan
22%
EEMEA
Total Global
Consumption
Growth:
1990s
2000–2005
2006–2008
2.8%
3.9%
3.3%
Historical analysis does not guarantee future results.
Source: Haver Analytics, International Financial Statistics, World Bank and AllianceBernstein
AllianceBernstein.com
12
We Believe The US Dollar Is Not at Risk of Losing Reserve Status
Daily Currency Transactions
US$ Billion
US Dollar as a Share of
Capital Market Transactions
3,000
US GDP
as a
Share of
World GDP
24%
1,500
48%
52%
40%
0
US Dollar
Euro
Yen
Historical analysis does not guarantee future results.
As of December 31, 2009
*Includes debt securities issued by nonresidents
**Excludes interbank loans
Source: Bank of International Settlements, European Central Bank, MSCI and AllianceBernstein
AllianceBernstein.com
International Global
Debt
Equities
Securities*
CrossBorder
Loans**
13
Weak Dollar Is Attracting Foreign Investment to the US
and Driving a Shift in Trade Flows
Real US Trade Deficit
Foreign Direct
Investment in the US
98
350
01
04
07
09*
0
-200
250
US$ Billions
US$ Billions
300
200
150
100
-400
-600
50
0
02 03 04 05 06 07 08
-800
Historical analysis does not guarantee future results.
Left as of December 31, 2008. Right as of September 30, 2009.
*Based on first three quarters
Source: Bureau of Economic Analysis, Haver Analytics and US Federal Reserve
AllianceBernstein.com
14
Innovation Should Continue to Drive Economic Growth
and Create Investment Opportunities
Technological Revolutions
1923
Television
1928
Penicillin
1829
Steam Locomotive
1818
Bicycle
1846
Anaesthesia
1800
1876
Telephone
1895
X-Ray
1900
1827
Ohm's Law
(Electricity)
1893
1865 Mendel's
Radio
Law (basis of
1903
genetics)
1885
Aeroplane
First Car
1860
Internal
Combustion
Engine
1880
Electric Lighting
1942
Nuclear
Reactor
1971
Microprocessor
2003
First Human
Genome Sequenced
1990
World Wide Web
2000
1985
1953
1977
Helical
Mobile DNA Finger
Structure
Phone Printing
of DNA
Discovered 1973
Genetically Modified Organism
& Personal Computer
Source: AllianceBernstein
AllianceBernstein.com
15
Equity Markets Look Attractive by Long-Term Measures,
But Fairly Valued on Current Levels of Earnings
Price to Book
Price to Sales
Price to Earnings
MSCI World
MSCI World
MSCI World
18.2×
17.7×
2009E
Historical
Average
2.5×
1.9×
1.0×
Current
Historical
Average
Current
1.2×
Historical
Average
Historical analysis and current estimates do not guarantee future results.
As of December 31, 2009
Historical averages are calculated by averaging monthly values looking back 10 years.
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: FactSet, MSCI and AllianceBernstein
AllianceBernstein.com
16
Global Profitability Is at a Cyclical Low
MSCI World ROE*
18
16
Percent
14
Long-Term
Average: 12.0%
12
10
8
Current: 6.6%
6
89
92
95
98
01
04
07
Historical analysis does not guarantee future results.
As of December 31, 2009
*Defined as price/book value divided by price/earnings
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: MSCI and AllianceBernstein
AllianceBernstein.com
17
Companies Have Started to Beat Earnings Estimates
Positive 3Q:2009 Earnings Surprises*
EPS
82%
58%
Sales
56%
53%
46%
32%
US
Europe
Japan
Historical analysis does not guarantee future results.
As of December 31, 2009
*US represented by companies in the S&P 500, Europe by MSCI Europe and Japan by Nikkei 225; data are as of November 30, 2009.
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Bloomberg, MSCI, Thomson I/B/E/S and Bernstein
AllianceBernstein.com
18
As Earnings Recover, Valuations Look More Attractive
MSCI World Operating Earnings per Share
100
US Dollars
90
2011 Consensus
Earnings Growth 21%
80
70
2010 Consensus
Earnings Growth 28%
Trend
60
50
07
08
09E
10E
11E
P/FE
17.6x
14.1x
11.7x
Past performance and current estimates do not guarantee future results.
Actual earnings through December 31, 2008; 2009–2011 consensus estimates as of December 17, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: FactSet, Thompson I/B/E/S, MSCI and AllianceBernstein
AllianceBernstein.com
19
As Risk Appetite Returns, “Safe Havens” Underperform
Returns (%)
2008
30
2009
VIX*
40.0
30
10
10
-10
-10
-30
-30
-50
-50
US
US Global Global CommTreas Dollar Corps Equities odities
VIX*
21.7
US
US Global Global CommTreas Dollar Corps Equities odities
Historical analysis does not guarantee future results.
*At year-end; CBOE volatility index
Categories represented by: Barclays Capital US Treasury Index; US dollar versus trade-weighted basket of currencies; Barclays Capital Global Aggregate–Corporates Index, hedged into
US dollars; S&P GSCI Total Return Index; and MSCI World, hedged into US dollars
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Barclays Capital, Bloomberg, CBOE, MSCI and S&P
AllianceBernstein.com
20
Company- and Industry-Specific Factors
Increasingly Drive Stock Performance
MSCI World Intra-Index Correlation of Performance
0.5
Correlation
0.4
Less
Stock-Specific
0.3
0.2
More
Stock-Specific
0.1
0.0
02
03
04
05
06
07
08
09
Historical analysis does not guarantee future results.
As of December 31, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Credit Suisse, MSCI and AllianceBernstein
AllianceBernstein.com
21
The Spread Opportunity Has Been Largely,
Although Not Fully, Captured
Global Corporate Bond Spreads to Treasuries
2007–2009
High Yield
Inv. Grade
Dec 2008
Basis Points
1,500
1,000
Dec 2009
500
Dec 2007
0
A
BBB
BB
B
Historical analysis does not guarantee future results.
As of December 31, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Barclays Capital and Merrill Lynch
AllianceBernstein.com
22
Sound Research Is a Must In a Lower-Yield Landscape
Global Investment-Grade
Corporates (%)
Global High Yield
(%)
86.3
17.0
16.9
7.8
5.5
1.1
8.4
4.5
0.7
6.5
1.1
Dec 07
Dec 08
8.7
6.2
Dec 09
Dec 07
21.1
18.6
8.5
8.5
Highest
Yielding
Issue
Median
Yield
5.0
Dec 08
Lowest
Yielding
Dec 09 Issue
Historical analysis does not guarantee future results.
As of December 31, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: Barclays Capital and Merrill Lynch
AllianceBernstein.com
23
The Worst Year in Market History Followed By One of the Best
Annual Stock Market Returns
MSCI World Index
Number of
Positive Years:
30
75%
Number of
Negative Years:
10
25%
2008
-50
to -40
-40
to -30
1974
2002
2001
2000
1990
1973
1992
1981
1970
2007
2005
1994
1984
1982
1977
-30
to -20
-20
to -10
-10
to 0
0
to 10
2004
1997
1996
1991
1989
1987
1979
1978
1976
1971
2009
2006
1999
1998
1995
1993
1988
1983
1980
1972
2003
1975
1986
1985
10
to 20
20
to 30
30
to 40
40
to 50
Percentage Total Return
Historical analysis does not guarantee future results.
As of December 31, 2009
Individuals cannot invest directly in an index. Please see slide 27 for index definitions.
Source: MSCI and FactSet
AllianceBernstein.com
AllianceBernstein
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Anxiety Creates Opportunity
 Economic recovery is gaining steam
 Policy risks remain
 Anxiety about the future…
 …continues to generate investment opportunities
AllianceBernstein.com
25
A Word About Risk
Past performance is no guarantee of future results. The investment return and principal value of an
investment in any Fund will fluctuate as the prices of the individual securities in which they invest fluctuate, so
that shares, when redeemed, may be worth more or less than their original cost.
Value investing does not guarantee a profit or eliminate risk. Not all companies whose stocks are considered to
be “value” stocks are able to turn their business around or successfully employ corrective strategies that would
result in stock prices that rise as initially expected.
Investments in foreign securities may magnify fluctuations due to changes in foreign exchange rates and the
possibility of substantial volatility due to political and economic uncertainties in foreign countries. Because a
Fund may invest in emerging markets and in developing countries, an investment also has the risk that market
changes or other factors affecting emerging markets and developing countries, including political instability and
unpredictable economic conditions, may have a significant effect on a Fund's net asset value.
Investing in non-US securities may be more volatile because of political, regulatory, market and economic
uncertainties associated with such securities. These risks are magnified in securities of emerging or
developing markets.
While a Fund may invests principally in common stocks and other equity securities, in order to achieve its
investment objectives, a Fund may at times use certain types of investment derivatives, such as options,
futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than,
the risks presented by more traditional investments. These risks are fully discussed in each Fund’s prospectus.
AllianceBernstein.com
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Index Descriptions
Following is a description of the indices referred to in this presentation. It is important to recognize that all indices are unmanaged
and do not reflect fees and expenses associated with the active management of a mutual fund portfolio. Investors cannot invest
directly in an index, and its performance does not reflect the performance of any AllianceBernstein mutual fund.
 Standard & Poor's Index (S&P 500) Widely regarded as the best single gauge of the US equities market, this world-renowned
index includes a representative sample of 500 leading companies in leading industries of the US economy. Although the S&P
500 focuses on the large-cap segment of the market, with over 80% coverage of US equities, it is also an ideal proxy for the
total market. The S&P 500 is part of a series of US indices that can be used as building blocks for portfolio construction. With
close to $1 trillion in indexed assets, the S&P US indices have earned a reputation for being not only leading market indicators,
but also investable portfolios designed for cost efficient replication or the creation of index-linked products.
 MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market
performance of the developed markets in Europe. As of June 2007, the MSCI Europe Index consisted of the following 16
developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
 Morgan Stanley Capital International (MSCI) World Index is a market capitalization–weighted index that measures the
performance of stock markets in 23 countries.
 Morgan Stanley Capital International (MSCI) Emerging Market Index is a free float–adjusted market capitalization index that
is designed to measure equity market performance in the global emerging markets. It consists of 26 emerging market country
indices.
 TOPIX Index measures stock prices on the Tokyo Stock Exchange (TSE).
 VIX Index or Chicago Board Options Exchange (CBOE) Volatility Index shows the market's expectation of 30-day volatility
constructed using the implied volatilities of a wide range of S&P 500 index options.
AllianceBernstein.com
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Index Descriptions (continued)
 Barclays Capital US Dollar Emerging Market Index includes USD-denominated debt from emerging markets in the following
regions: Americas, Europe, Middle East, Africa, and Asia. As with other fixed income benchmarks provided by Barclays Capital,
the index is rules-based, which allows for an unbiased view of the marketplace and easy replicability.
 Barclays Capital Global Aggregate - Corporate Bond Index tracks the performance of investment grade corporate bonds
publicly issued in the global market found in the Global Aggregate.
 Barclays Capital Global High Yield Index provides a broad-based measure of the global high-yield fixed income markets. The
Global High-Yield Index represents that union of the U.S. High-Yield, Pan-European High-Yield, U.S. Emerging Markets HighYield, CMBS High-Yield, and Pan-European Emerging Markets High-Yield Indices.
 Barclays Capital US Corporate High Yield Index covers the USD-denominated, non-investment grade, fixed-rate taxable
corporate bonds that are classified as high-yield in the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below.
Excludes Emerging Markets.
 Barclays Capital Commercial Mortgage-Backed Securities (CMBS) Index tracks the performance of US dollar denominated
commercial mortgage-backed securities publicly issued in the US domestic market.
 Barclays Capital US Treasury Index includes fixed-rate, local currency sovereign debt that make up the US Treasury sector of
the Global Aggregate Index.
 Barclays Capital Japan Treasury Index includes fixed-rate, local currency sovereign debt that make up the Japanese
Treasury sector of the Global Aggregate Index.
 Barclays Capital Euro Treasury Index includes fixed-rate, local currency sovereign debt that make up the Euro Treasury
sector of the Global Aggregate Index.
 JP Morgan Emerging Markets Bond Index Plus (EMBI+) tracks total returns for external-currency-denominated debt
instruments of the emerging markets: Brady bonds, loans and Eurobonds. It offers coverage of 21emerging market countries
AllianceBernstein.com
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16874
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