Capital Market Outlook

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.

Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed

Investment Products Offered:

Capital Markets OutlookNew Landscape Generates Opportunities

December 31, 2009

2AllianceBernstein.com

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

3AllianceBernstein.com 33

0.6%2.4%2.2% 1.5%3.3%5.2%

-1.3%-0.1%

8.5% 6.0%

4Q:2009 Returns

Credit “Safe” Assets

2009 Returns

Returns in USD

78.5%

26.5% 31.8%

57.7%

28.5% 34.2%16.6%

1.4% 4.1%

-3.6%

JapanGov’t

EM EAFEUS GlobalHighYield

USCMBS

USGov’t

EuroGov’t

EmergingMarketDebt

GlobalCorp

Equities

Past performance does not guarantee future results.As of December 31, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions. Source: Bloomberg, Barclays Capital, MSCI, S&P and AllianceBernstein

Equities and Credit Sharply Higher in 2009…


-2.3%

3.5%

…in Response to an Improved Economic Outlook

Current estimates and forecasts may not be attained.As of January 4, 2010Source: AllianceBernstein

-5.4%-3.9%

-2.5%

1.0%1.9% 2.4%

3.5%

6.4%

AllianceBernstein Real GDP Forecasts

EmergingCountries

Global Japan Euro Area US

2009E 2010F


Confidence, While Still Weak, Is Improving

90

92

94

96

98

100

102

104

00 01 02 03 04 05 06 07 08 09

G7 Confidence Measures

Neutral

Business

Consumer

Historical analysis does not guarantee future results.As of September 30, 2009Source: Organisation for Economic Co-operation and Development (OECD)


-60

-40

-20

0

20

40

97 98 99 00 01 02 03 04 05 06 07 08 09

Per

cent

More Willing

Less Willing

Historical analysis does not guarantee future results.As of September 30, 2009Source: Haver Analytics and US Federal Reserve

Bank Willingness to Lend Is Becoming Less Restrictive

Bank Willingness to Make Consumer Installment Loans


Significant Fiscal Stimulus Remains in Pipeline

0

20

40

60

80

100

US China

Per

cent

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

Fiscal Stimulus

Total StimulusApproved: US $787 Bil. US $790 Bil.

“Realized” as% of 2008 GDP: 2.0% 6.0%

Realized*

Still to Come


Inflation: Three Key Factors to Watch

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

Aggregate Demandvs. Supply

Wage Growth

Money and Credit Growth

High

Low

Medium

High

Low

Medium

High

Low

Medium


-4

-2

0

2

4

6

8

10

97 98 99 00 01 02 03 04 05 06 07 08 09 10F

Per

cent

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, 2010Official 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

GDP Growth

Official Interest Rate

As Growth Accelerates, Interest Rates Should Rise

Nominal World GDP Growth and Official Interest Rate


How Fast, and How Far?

Official Interest RatesPercent

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

2.83.4

4.7

6.0

0.1

1.00.3 0.5

5.3

2.3 2.0 2.0

6.7

0.2 0.1

Japan Euro Area US UK China

2003–2007 2009* 2010F*


US Federal BudgetUS$ Billion

Long-Term Budget Projections Tend to Extrapolate Current Trends

-221

126

-1417

-269

444

-722

236

-1,417

Projection Made in 1990 for FY2000

FY1990 Actual

Projection Made in 1999 for FY2009

FY1999 Actual

FY2009Actual

FY2000Actual

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 yearsSource: Office of Management and Budget

FY2009Actual

Projection Made in 2009 for FY2019*

FY2019Actual

?


Anxiety about the Future Obscures Opportunity

US and other developed market consumers are too indebted to resume spending

The weak dollar is a sign of no confidence in the US

Regulation and uncertainty will stifle economic growth

Growing middle class in emerging markets are the key to consumption growth

The falling dollar is part of a necessary correction to an unhealthy imbalance

Innovation and productivity gains are as strong as ever

Anxiety Opportunity


1990s 2000–2005 2006–2008

The US Is Not the Only Driver of Consumption

Historical analysis does not guarantee future results.Source: Haver Analytics, International Financial Statistics, World Bank and AllianceBernstein

Emerging Markets’ Share of Global Real Consumption GrowthPercent of Total

22%

29%

46%

EEMEA

Asiaex Japan

Latin America

Total GlobalConsumptionGrowth: 2.8% 3.9% 3.3%


We Believe The US Dollar Is Not at Risk of Losing Reserve Status

Historical analysis does not guarantee future results.As of December 31, 2009*Includes debt securities issued by nonresidents**Excludes interbank loansSource: Bank of International Settlements, European Central Bank, MSCI and AllianceBernstein

Daily Currency TransactionsUS$ Billion

0

1,500

3,000

US Dollar Euro Yen

24%

40%

48%52%

US GDP as a

Share of World GDP

US Dollar as a Share of Capital Market Transactions

International Debt

Securities*

Cross-Border

Loans**

GlobalEquities


0

50

100

150

200

250

300

350

02 03 04 05 06 07 08

US

$ B

illio

ns

Historical analysis does not guarantee future results.Left as of December 31, 2008. Right as of September 30, 2009.*Based on first three quartersSource: Bureau of Economic Analysis, Haver Analytics and US Federal Reserve

Weak Dollar Is Attracting Foreign Investment to the US and Driving a Shift in Trade Flows

Foreign Direct Investment in the US

-800

-600

-400

-200

0

98 01 04 07

US

$ B

illio

ns

Real US Trade Deficit

09*


Innovation Should Continue to Drive Economic Growthand Create Investment Opportunities

1818 Bicycle

1827Ohm's Law (Electricity)

1829Steam Locomotive

1846 Anaesthesia

1860InternalCombustionEngine

1876Telephone

1880 Electric Lighting

1885First Car

1893 Radio

1895 X-Ray

1903 Aeroplane

1923 Television

1928Penicillin

1942Nuclear Reactor

1953Helical Structureof DNA Discovered

1971 Microprocessor

1973 Genetically Modified Organism

& Personal Computer

1977 Mobile Phone

1985 DNA Finger Printing

1990World Wide Web

2003 First Human

Genome Sequenced

1865 Mendel's Law (basis of genetics)

1800

1900

2000

Source: AllianceBernstein

Technological Revolutions


Historical analysis and current estimates do not guarantee future results.As of December 31, 2009Historical 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

Equity Markets Look Attractive by Long-Term Measures, But Fairly Valued on Current Levels of Earnings

Price to Book MSCI World

1.9×

2.5×

Current HistoricalAverage

1.0×1.2×

Current HistoricalAverage

Price to SalesMSCI World

Price to EarningsMSCI World

2009E HistoricalAverage

18.2× 17.7×


Global Profitability Is at a Cyclical Low

MSCI World ROE*

Historical analysis does not guarantee future results.As of December 31, 2009*Defined as price/book value divided by price/earningsIndividuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: MSCI and AllianceBernstein

6

8

10

12

14

16

18

89 92 95 98 01 04 07

Per

cent

Long-Term Average: 12.0%

Current: 6.6%


Companies Have Started to Beat Earnings Estimates

Positive 3Q:2009 Earnings Surprises*

82%

56% 53%58%

46%

32%

US Europe Japan

EPS Sales

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


50

60

70

80

90

100

07 08 09E 10E 11E

US

Dol

lars

As Earnings Recover, Valuations Look More Attractive

MSCI World Operating Earnings per Share

2010 ConsensusEarnings Growth 28%

Trend

Past performance and current estimates do not guarantee future results. Actual earnings through December 31, 2008; 2009–2011 consensus estimates as of December 17, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: FactSet, Thompson I/B/E/S, MSCI and AllianceBernstein

2011 ConsensusEarnings Growth 21%

P/FE 17.6x 14.1x 11.7x


As Risk Appetite Returns, “Safe Havens” Underperform

Returns (%)

2008 2009

Historical analysis does not guarantee future results.*At year-end; CBOE volatility indexCategories 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 dollarsIndividuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: Barclays Capital, Bloomberg, CBOE, MSCI and S&P

-50

-30

-10

10

30VIX*40.0

-50

-30

-10

10

30VIX*21.7

US Dollar

US Treas

Global Corps

Global Equities

Comm-odities

US Dollar

US Treas

Global Corps

Global Equities

Comm-odities


Historical analysis does not guarantee future results.As of December 31, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: Credit Suisse, MSCI and AllianceBernstein

MSCI World Intra-Index Correlation of Performance

0.0

0.1

0.2

0.3

0.4

0.5

02 03 04 05 06 07 08 09

Cor

rela

tion

LessStock-Specific

MoreStock-Specific

Company- and Industry-Specific Factors Increasingly Drive Stock Performance


The Spread Opportunity Has Been Largely, Although Not Fully, Captured

Global Corporate Bond Spreads to Treasuries2007–2009

0

500

1,000

1,500

A BBB BB B

Bas

is P

oint

s

Dec 2009

Dec 2008

Dec 2007

High YieldInv. Grade

Historical analysis does not guarantee future results.As of December 31, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: Barclays Capital and Merrill Lynch


Sound Research Is a Must In a Lower-Yield Landscape

Historical analysis does not guarantee future results.As of December 31, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: Barclays Capital and Merrill Lynch

Global Investment-GradeCorporates (%)

0.71.11.15.5 4.56.5

16.9

7.8 8.4

Dec 07 Dec 08 Dec 09

HighestYielding Issue

MedianYield

Global High Yield(%)

5.08.5

6.28.7 8.5

18.617.021.1

Dec 07 Dec 08 Dec 09

86.3

LowestYielding Issue


Number of Positive Years: 30 75%

Number of Negative Years: 10 25%

Historical analysis does not guarantee future results. As of December 31, 2009Individuals cannot invest directly in an index. Please see slide 27 for index definitions.Source: MSCI and FactSet

AllianceBernstein

The Worst Year in Market History Followed By One of the Best

Annual Stock Market ReturnsMSCI World Index

Percentage Total Return

-20 to -10

2002

20to 30

0to 10

1973

1990

2000

2001

1970 1977 1971 19721974

1981 1982 1976 1980

1992 1984 1978 1983

1994 1979 1988

2005 1987 1993

2007 1989 1995

1991 1998

1996 1999

1997 2006

-40to -30

-30 to -20

-10 to 0

10 to 20

40to 50

1975 1985

2003

30to 40

-50 to -40

2004

1986

2009

2008


Anxiety Creates Opportunity

Economic recovery is gaining steam

Policy risks remain

Anxiety about the future…

…continues to generate investment opportunities


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.

A Word About Risk


Index Descriptions

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.

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.


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 High-Yield, 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

16874 AllianceBernstein Investments, Inc. (ABI) is the distributor of the AllianceBernstein family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the manager of the funds.

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Capital Market Outlook

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