|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
17
|
|
Portfolio of Investments
STATEMENT OF ASSETS & LIABILITIES
November 30, 2013
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Investments in securities, at value
|
|
|
|
|
|
Unaffiliated issuers (cost $117,812,279)
|
|
$
|
136,347,625
|
(a)
|
|
Affiliated issuers (cost $4,775,980—including investment of cash collateral for securities loaned of $2,577,988)
|
|
|
4,775,980
|
|
|
Foreign currencies, at value (cost $619,485)
|
|
|
616,623
|
|
|
Unrealized appreciation of forward currency exchange contracts
|
|
|
652,233
|
|
|
Dividends receivable
|
|
|
282,772
|
|
|
Receivable for capital stock sold
|
|
|
75,413
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
142,750,646
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Payable for collateral received on securities loaned
|
|
|
2,577,988
|
|
|
Unrealized depreciation of forward currency
exchange contracts
|
|
|
614,692
|
|
|
Payable for investment securities purchased
|
|
|
343,839
|
|
|
Payable for capital stock redeemed
|
|
|
180,861
|
|
|
Advisory fee payable
|
|
|
63,400
|
|
|
Distribution fee payable
|
|
|
46,293
|
|
|
Administrative fee payable
|
|
|
11,534
|
|
|
Transfer Agent fee payable
|
|
|
10,440
|
|
|
Accrued expenses and other liabilities
|
|
|
171,174
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
4,020,221
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
138,730,425
|
|
|
|
|
|
|
|
|
Composition of Net Assets
|
|
|
|
|
|
Capital stock, at par
|
|
$
|
10,412
|
|
|
Additional paid-in capital
|
|
|
178,891,749
|
|
|
Undistributed net investment income
|
|
|
904,354
|
|
|
Accumulated net realized loss on investment and
foreign currency transactions
|
|
|
(59,643,453
|
)
|
|
Net unrealized appreciation of investments and foreign currency denominated assets and liabilities
|
|
|
18,567,363
|
|
|
|
|
|
|
|
|
|
|
$
|
138,730,425
|
|
|
|
|
|
|
|
Net Asset Value Per Share—21 billion shares of capital stock authorized,
$.001 par value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
|
|
Net Assets
|
|
|
Shares
Outstanding
|
|
|
Net Asset
Value
|
|
|
|
|
|
A
|
|
$
|
79,216,311
|
|
|
|
5,918,266
|
|
|
$
|
13.39
|
*
|
|
|
|
|
B
|
|
$
|
2,530,822
|
|
|
|
193,504
|
|
|
$
|
13.08
|
|
|
|
|
|
C
|
|
$
|
22,057,588
|
|
|
|
1,673,782
|
|
|
$
|
13.18
|
|
|
|
|
|
Advisor
|
|
$
|
13,273,987
|
|
|
|
995,951
|
|
|
$
|
13.33
|
|
|
|
|
|
R
|
|
$
|
9,476,844
|
|
|
|
716,661
|
|
|
$
|
13.22
|
|
|
|
|
|
K
|
|
$
|
10,083,035
|
|
|
|
757,602
|
|
|
$
|
13.31
|
|
|
|
|
|
I
|
|
$
|
2,091,838
|
|
|
|
156,224
|
|
|
$
|
13.39
|
|
|
|
|
|
(a)
|
|
Includes securities on loan with a value of $2,451,955 (See Note E).
|
|
*
|
|
The maximum offering price per share for Class A shares was $13.98 which reflects a sales charge of 4.25%.
|
See notes to financial statements.
|
|
|
|
|
18
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Statement of Assets & Liabilities
STATEMENT OF OPERATIONS
Year Ended November 30, 2013
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
|
|
|
|
|
|
|
Unaffiliated issuers (net of foreign taxes withheld of $193,865)
|
|
$
|
5,131,138
|
|
|
|
|
|
|
Affiliated issuers
|
|
|
4,332
|
|
|
|
|
|
|
Securities lending income
|
|
|
46,685
|
|
|
$
|
5,182,155
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Advisory fee (see Note B)
|
|
|
808,813
|
|
|
|
|
|
|
Distribution fee—Class A
|
|
|
260,921
|
|
|
|
|
|
|
Distribution fee—Class B
|
|
|
33,169
|
|
|
|
|
|
|
Distribution fee—Class C
|
|
|
217,772
|
|
|
|
|
|
|
Distribution fee—Class R
|
|
|
51,353
|
|
|
|
|
|
|
Distribution fee—Class K
|
|
|
26,137
|
|
|
|
|
|
|
Transfer agency—Class A
|
|
|
167,205
|
|
|
|
|
|
|
Transfer agency—Class B
|
|
|
7,646
|
|
|
|
|
|
|
Transfer agency—Class C
|
|
|
43,309
|
|
|
|
|
|
|
Transfer agency—Advisor Class
|
|
|
23,406
|
|
|
|
|
|
|
Transfer agency—Class R
|
|
|
24,769
|
|
|
|
|
|
|
Transfer agency—Class K
|
|
|
19,652
|
|
|
|
|
|
|
Transfer agency—Class I
|
|
|
2,436
|
|
|
|
|
|
|
Custodian
|
|
|
126,389
|
|
|
|
|
|
|
Registration fees
|
|
|
102,948
|
|
|
|
|
|
|
Directors’ fees
|
|
|
59,303
|
|
|
|
|
|
|
Audit
|
|
|
59,098
|
|
|
|
|
|
|
Administrative
|
|
|
49,465
|
|
|
|
|
|
|
Printing
|
|
|
41,167
|
|
|
|
|
|
|
Legal
|
|
|
38,964
|
|
|
|
|
|
|
Miscellaneous
|
|
|
45,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
|
|
|
|
2,209,714
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
2,972,441
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions
|
|
|
|
|
|
|
|
|
|
Net realized gain on:
|
|
|
|
|
|
|
|
|
|
Investment transactions
|
|
|
|
|
|
|
11,565,632
|
|
|
Foreign currency transactions
|
|
|
|
|
|
|
606,783
|
|
|
Net change in unrealized appreciation/depreciation of:
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
(3,499,576
|
)
|
|
Foreign currency denominated
assets and liabilities
|
|
|
|
|
|
|
(99,156
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on investment and foreign
currency transactions
|
|
|
|
|
|
|
8,573,683
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Net Assets
from Operations
|
|
|
|
|
|
$
|
11,546,124
|
|
|
|
|
|
|
|
|
|
|
|
See notes to financial statements.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
19
|
|
Statement of Operations
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
November 30,
2013
|
|
|
Year Ended
November 30,
2012
|
|
|
Increase (Decrease) in Net Assets from Operations
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
2,972,441
|
|
|
$
|
2,093,563
|
|
|
Net realized gain on investment and foreign currency transactions
|
|
|
12,172,415
|
|
|
|
7,954,810
|
|
|
Net change in unrealized appreciation/depreciation of investments and foreign currency denominated assets and liabilities
|
|
|
(3,598,732
|
)
|
|
|
14,246,202
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations
|
|
|
11,546,124
|
|
|
|
24,294,575
|
|
|
Dividends to Shareholders from
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
(5,109,932
|
)
|
|
|
(2,284,018
|
)
|
|
Class B
|
|
|
(204,059
|
)
|
|
|
(114,437
|
)
|
|
Class C
|
|
|
(1,015,401
|
)
|
|
|
(495,428
|
)
|
|
Advisor Class
|
|
|
(485,256
|
)
|
|
|
(207,734
|
)
|
|
Class R
|
|
|
(536,558
|
)
|
|
|
(211,475
|
)
|
|
Class K
|
|
|
(541,563
|
)
|
|
|
(260,755
|
)
|
|
Class I
|
|
|
(108,681
|
)
|
|
|
(103,369
|
)
|
|
Capital Stock Transactions
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
|
|
|
(1,993,559
|
)
|
|
|
9,819,559
|
|
|
Proceeds from third party regulatory settlement (see Note F)
|
|
|
47,779
|
|
|
|
– 0
|
–
|
|
|
|
|
|
|
|
|
|
|
|
Total increase
|
|
|
1,598,894
|
|
|
|
30,436,918
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
137,131,531
|
|
|
|
106,694,613
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period (including undistributed net investment income of $904,354 and $1,178,249, respectively)
|
|
$
|
138,730,425
|
|
|
$
|
137,131,531
|
|
|
|
|
|
|
|
|
|
|
|
See notes to financial statements.
|
|
|
|
|
20
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Statement of Changes in Net Assets
NOTES TO FINANCIAL STATEMENTS
November 30, 2013
NOTE A
Significant
Accounting Policies
AllianceBernstein Global Real Estate Investment Fund, Inc. (the “Fund”) was incorporated in the state of
Maryland on July 15, 1996 is registered under the Investment Company Act of 1940, as a diversified, open-end management investment company. The Fund offers Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares.
Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a
contingent deferred sales charge of 1%. Class B shares are currently sold with a contingent deferred sales charge which declines from 4% to zero depending on the period of time the shares are held. Effective January 31, 2009, sales of Class B
shares of the Fund to new investors were suspended. Class B shares will only be issued (i) upon the exchange of Class B shares from another AllianceBernstein Mutual Fund, (ii) for purposes of dividend reinvestment, (iii) through the
Fund’s Automatic Investment Program (the “Program”) for accounts that established the Program prior to January 31, 2009, and (iv) to Class B shareholders as of January 31, 2009. The ability to establish a new
Program for accounts containing Class B shares was suspended as of January 31, 2009. Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase. Class C shares are subject to a
contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Class R and Class K shares are sold without an initial or contingent deferred sales charge. Advisor Class and Class I shares are sold without an
initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. All seven classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and
transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which
require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from
those estimates. The following is a summary of significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily
available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Fund’s Board of Directors (“the Board”).
In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national
securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
21
|
|
Notes to Financial Statements
price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities
listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter
(“OTC”) market put or call options are valued at the mid level between the current bid and asked prices. If either a current bid or current ask price is unavailable, AllianceBernstein L.P. (the “Adviser”) will have discretion to
determine the best valuation (e.g. last trade price in the case of listed options); open futures contracts are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations
available for the day of valuation, the last available closing settlement price is used; U.S. government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity
was 60 days or less; or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the
basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are
used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party
broker-dealers or counterparties. Investment companies are valued at their net asset value each day.
Securities for which market quotations
are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer,
analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund
values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of
those securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.
2. Fair Value Measurements
In accordance with
U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP
establishes a framework for measuring fair value, and a
|
|
|
|
|
22
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to
the assumptions that market participants would use in pricing the asset or liability (including those valued based on their market values as described in Note A.1 above). Observable inputs reflect the assumptions market participants would use in
pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability
based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
|
|
•
|
|
Level 1—quoted prices in active markets for identical investments
|
|
|
•
|
|
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk,
etc.)
|
|
|
•
|
|
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
|
Where readily available market prices or relevant bid prices are not available for certain equity investments, such
investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other
multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions
on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and
other significant inputs to determine the valuation.
The following table summarizes the valuation of the Fund’s investments by the above
fair value hierarchy levels as of November 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: Other
|
|
$
|
23,035,882
|
|
|
$
|
35,684,945
|
|
|
$
|
– 0
|
–
|
|
$
|
58,720,827
|
|
|
Retail
|
|
|
13,238,723
|
|
|
|
13,388,104
|
|
|
|
– 0
|
–
|
|
|
26,626,827
|
|
|
Residential
|
|
|
12,298,117
|
|
|
|
8,410,165
|
|
|
|
– 0
|
–
|
|
|
20,708,282
|
|
|
Office
|
|
|
9,326,971
|
|
|
|
5,800,680
|
|
|
|
– 0
|
–
|
|
|
15,127,651
|
|
|
Lodging
|
|
|
7,804,674
|
|
|
|
751,437
|
|
|
|
– 0
|
–
|
|
|
8,556,111
|
|
|
Industrials
|
|
|
3,978,522
|
|
|
|
2,629,405
|
|
|
|
– 0
|
–
|
|
|
6,607,927
|
|
|
Short-Term Investments
|
|
|
2,197,992
|
|
|
|
– 0
|
–
|
|
|
– 0
|
–
|
|
|
2,197,992
|
|
|
Investments of Cash Collateral for Securities Loaned in Affiliated Money Market Fund
|
|
|
2,577,988
|
|
|
|
– 0
|
–
|
|
|
– 0
|
–
|
|
|
2,577,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in Securities
|
|
|
74,458,869
|
|
|
|
66,664,736
|
†
|
|
|
– 0
|
–
|
|
|
141,123,605
|
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
23
|
|
Notes to Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Other Financial Instruments*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Currency Exchange Contracts
|
|
$
|
– 0
|
–
|
|
$
|
652,233
|
|
|
$
|
– 0
|
–
|
|
$
|
652,233
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Currency Exchange Contracts
|
|
|
– 0
|
–
|
|
|
(614,692
|
)
|
|
|
– 0
|
–
|
|
|
(614,692
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
^
|
|
$
|
74,458,869
|
|
|
$
|
66,702,277
|
|
|
$
|
– 0
|
–
|
|
$
|
141,161,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/depreciation on the
instrument.
|
|
†
|
|
A significant portion of the Fund’s foreign equity investments are categorized as
Level 2 investments since they are valued using fair value prices based on third party vendor modeling tools to the extent available, see Note A.1.
|
|
^
|
|
There were de minimis transfers under 1% of net assets between Level 1 and Level 2 during the reporting period.
|
The Fund recognizes all transfers between levels of the fair value hierarchy assuming the financial instrument was transferred at the beginning of the
reporting period.
The Adviser has established a Valuation Committee (the “Committee”) which is responsible for overseeing the
pricing and valuation of all securities held in the Fund. The Committee operates under pricing and valuation policies and procedures established by the Adviser and approved by the Board, including pricing policies which set forth the mechanisms and
processes to be employed on a daily basis to implement these policies and procedures. In particular, the pricing policies describe how to determine market quotations for securities and other instruments. The Committee’s responsibilities
include: 1) fair value and liquidity determinations (and oversight of any third parties to whom any responsibility for fair value and liquidity determinations is delegated), and 2) regular monitoring of the Adviser’s pricing and valuation
policies and procedures and modification or enhancement of these policies and procedures (or recommendation of the modification of these policies and procedures) as the Committee believes appropriate.
The Committee is also responsible for monitoring the implementation of the pricing policies by the Adviser’s Pricing Group (the “Pricing
Group”) and a third party which performs certain pricing functions in accordance with the pricing policies. The Pricing Group is responsible for the oversight of the third party on a day-to-day basis. The Committee and the Pricing Group perform
a series of activities to provide reasonable assurance of the accuracy of prices including: 1) periodic vendor due diligence meetings, review of methodologies, new developments, process at vendors, 2) daily compare of security valuation versus prior
day for all fixed income securities that exceeded established thresholds, and 3) daily review of unpriced, stale, and variance reports with exceptions reviewed by senior management and the Committee.
|
|
|
|
|
24
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
In addition,
several processes outside of the pricing process are used to monitor valuation issues including: 1) performance and performance attribution reports are monitored for anomalous impacts based upon benchmark performance, and 2) portfolio managers
review all portfolios for performance and analytics (which are generated using the Adviser’s prices).
3. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange contracts are translated into U.S. dollars at the
mean of the quoted bid and ask prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and
expenses are translated into U.S. dollars at rates of exchange prevailing when accrued.
Net realized gain or loss on foreign currency
transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, foreign currency exchange contracts, holding of foreign currencies, currency gains or losses realized between the trade and
settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation and depreciation of foreign currency denominated assets
and liabilities.
4. Taxes
It is the
Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no
provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied
to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned.
In
accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes
,
management has analyzed the Fund’s tax positions taken or expected to be taken on federal and state income tax returns for all open tax years
(the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.
5. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is informed of the dividend. Interest income is accrued daily. Investment
transactions are accounted for on the date securities are purchased or sold. Investment gains
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
25
|
|
Notes to Financial Statements
and losses are determined on the identified cost basis. The Fund amortizes premiums and accretes discounts as adjustments to interest income.
6. Class Allocations
All income earned and
expenses incurred by the Fund are borne on a pro-rata basis by each settled class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific expenses which are allocated to the
respective class. Realized and unrealized gains and losses are allocated among the various share classes based on their respective net assets.
7.
Dividends and Distributions
Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends
and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.
NOTE B
Advisory Fee and Other Transactions with Affiliates
Under the terms of the investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .55% of the first $2.5 billion, .45% of the next $2.5 billion and .40% in excess of $5
billion, of the Fund’s average daily net assets. The fee is accrued daily and paid monthly.
Pursuant to the investment advisory
agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the year ended November 30, 2013, such fee amounted to $49,465.
The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency
Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation
retained by ABIS amounted to $114,456 for the year ended November 30, 2013.
AllianceBernstein Investments, Inc. (the
“Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has retained front-end sales charges of $7,706 from the sale of Class A shares
and received $2,276, $2,372 and $7,414 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the year ended November 30, 2013.
|
|
|
|
|
26
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
The Fund may invest in the AllianceBernstein Fixed-Income Shares, Inc.—Government STIF Portfolio (“Government STIF Portfolio”), an open-end management investment company managed by the
Adviser. The Government STIF Portfolio is offered as a cash management option to mutual funds and other institutional accounts of the Adviser, and is not available for direct purchase by members of the public. The Government STIF Portfolio pays no
investment management fees but does bear its own expenses. A summary of the Fund’s transactions in shares of the Government STIF Portfolio for the year ended November 30, 2013 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
November 30, 2012
(000)
|
|
Purchases
at Cost
(000)
|
|
|
Sales
Proceeds
(000)
|
|
|
Market Value
November 30, 2013
(000)
|
|
|
Dividend
Income
(000)
|
|
|
$ 711
|
|
$
|
65,175
|
|
|
$
|
63,688
|
|
|
$
|
2,198
|
|
|
$
|
2
|
|
Brokerage commissions paid on investment transactions for the year ended November 30, 2013 amounted to $485,372 of
which $2,626 and $0, respectively, were paid to Sanford C. Bernstein & Co., LLC and Sanford C. Bernstein Limited, affiliates of the Adviser.
NOTE C
Distribution Services Agreement
The Fund has adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the Agreement the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund’s average daily net assets attributable to Class A shares, 1% of the Fund’s average daily net assets
attributable to Class B and Class C shares, .50% of the Fund’s average daily net assets attributable to Class R shares and .25% of the Fund’s average daily net assets attributable to Class K shares. There are no distribution and servicing
fees on the Advisor Class and Class I shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Since the
commencement of the Fund’s operations, the Distributor has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amounts of $8,976,528, $2,250,625, $278,052 and $130,224 for Class B, Class C, Class R and Class K
shares, respectively. While such costs may be recovered from the Fund in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder
vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal period for Class A shares. The Agreement also provides that the Adviser may use
its own resources to finance the distribution of the Fund’s shares.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
27
|
|
Notes to Financial Statements
NOTE D
Investment Transactions
Purchases and sales of investment securities (excluding
short-term investments) for the year ended November 30, 2013 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
Sales
|
|
|
Investment securities (excluding
U.S. government securities)
|
|
$
|
164,376,281
|
|
|
$
|
172,387,620
|
|
|
U.S. government securities
|
|
|
– 0
|
–
|
|
|
– 0
|
–
|
The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation
(excluding foreign currency exchange contracts) are as follows:
|
|
|
|
|
|
|
Cost
|
|
$
|
127,861,903
|
|
|
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
22,472,099
|
|
|
Gross unrealized depreciation
|
|
|
(9,210,397
|
)
|
|
|
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
13,261,702
|
|
|
|
|
|
|
|
1. Derivative Financial Instruments
The Fund may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively,
“investment purposes”), or to hedge or adjust the risk profile of its portfolio.
The principal types of derivatives utilized by the
Fund, as well as the methods in which they may be used are:
|
|
•
|
|
Forward Currency Exchange Contracts
|
The Fund may enter into forward currency exchange contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to hedge certain firm purchase
and sale commitments denominated in foreign currencies and for non-hedging purposes as a means of making direct investments in foreign currencies, as described below under “Currency Transactions”.
A forward currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate.
The gain or loss arising from the difference between the original contract and the closing of such contract would be included in net realized gain or loss on foreign currency transactions. Fluctuations in the value of open forward currency exchange
contracts are recorded for financial reporting purposes as unrealized appreciation and/or depreciation by the Fund. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in
the value of a foreign currency relative to the U.S. dollar.
During the year ended November 30, 2013, the Fund held
forward currency exchange contracts for hedging and non-hedging purposes.
|
|
|
|
|
28
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
Documentation governing the Fund’s OTC derivatives may contain provisions for early termination of such transaction in the event the net assets of the Fund decline below specific levels set forth in
the documentation (“net asset contingent features”). If these levels are triggered, the Fund’s counterparty has the right to terminate such transaction and require the Fund to pay or receive a settlement amount in connection with the
terminated transaction. As of November 30, 2013, the Fund had OTC derivatives with contingent features in net liability positions in the amount of $350,332. If a trigger event had occurred at November 30, 2013, for those derivatives in a
net liability position, an amount of $350,332 would be required to be posted by the Fund.
At November 30, 2013, the Fund had entered
into the following derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives
|
|
|
Liability Derivatives
|
|
|
Derivative Type
|
|
Statement of
Assets and
Liabilities
Location
|
|
Fair Value
|
|
|
Statement of
Assets and
Liabilities
Location
|
|
Fair Value
|
|
|
Foreign exchange contracts
|
|
Unrealized
appreciation of
forward currency
exchange contracts
|
|
$
|
652,233
|
|
|
Unrealized
depreciation of
forward currency
exchange contracts
|
|
$
|
614,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
652,233
|
|
|
|
|
$
|
614,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The effect of derivative instruments on the statement of operations for the year ended November 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Type
|
|
Location of Gain
or (Loss) on
Derivatives
|
|
Realized Gain
or (Loss) on
Derivatives
|
|
|
Change in
Unrealized
Appreciation or
(Depreciation)
|
|
|
Foreign exchange contracts
|
|
Net realized gain/(loss) on foreign currency transactions; Net change in unrealized appreciation/depreciation of foreign currency denominated assets and liabilities
|
|
$
|
617,104
|
|
|
$
|
(98,819
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
617,104
|
|
|
$
|
(98,819
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table represents the volume of the Fund’s derivative transactions during the year ended
November 30, 2013:
|
|
|
|
|
|
|
Foreign Exchange Contracts:
|
|
|
|
|
|
Average principal amount of buy contracts
|
|
$
|
20,343,763
|
|
|
Average principal amount of sale contracts
|
|
$
|
21,268,485
|
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
29
|
|
Notes to Financial Statements
2. Currency Transactions
The Fund may invest in non-U.S. dollar securities on a currency hedged or
unhedged basis. The Fund may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and
other options. The Fund may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Fund and do not
present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Fund may also conduct currency exchange
contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).
NOTE E
Securities
Lending
The Fund may enter into securities lending transactions. Under the Fund’s securities lending program, all loans of securities
will be collateralized continually by cash. The Fund will be compensated for the loan from a portion of the net return from the income earned on cash collateral after a rebate is paid to the borrower (in some cases, this rebate may be a
“negative rebate” or fee paid by the borrower to the Fund in connection with the loan), and payments are made for fees of the securities lending agent and for certain other administrative expenses. It is the policy of the Fund to receive
collateral consisting of cash in an amount exceeding the value of the securities loaned. A Fund will have the right to call a loan and obtain the securities loaned at any time on notice to the borrower within the normal and customary settlement time
for the securities. While the securities are on loan, the borrower is obligated to pay the Fund amounts equal to any income or other distributions from the securities. The Fund will not have the right to vote on any securities during the existence
of a loan, but will have the right to regain ownership of loaned securities in order to exercise voting or other ownership rights. The lending agent has agreed to indemnify the Fund in the case of default of any securities borrower. Collateral
received and securities loaned are marked to market daily to ensure that the securities loaned are secured by collateral. The lending agent will invest the cash collateral received in AllianceBernstein Exchange Reserves, an eligible money market
vehicle, in accordance with the investment restrictions of the Fund, and as approved by the Board of Directors. The collateral received on securities loaned is recorded as an asset as well as a corresponding liability in the statement of assets and
liabilities. When the Fund lends securities, its investment performance will continue to reflect changes in the value of the securities loaned. At November 30, 2013, the Fund had securities on loan with a value of $2,451,955 and had received
cash collateral which has been invested into AllianceBernstein Exchange Reserves of $2,577,988. The cash collateral will be adjusted on the next business day to maintain the required collateral amount. The Fund earned securities lending income of
$46,685 and $2,775 from the borrowers and AllianceBernstein Exchange Reserves, respectively, for the year ended
|
|
|
|
|
30
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
November 30, 2013; these amounts are reflected in the statement of operations. A principal risk of lending portfolio securities is that the borrower will fail to return the loaned securities
upon termination of the loan and that the collateral will not be sufficient to replace the loaned securities. A summary of the Fund’s transactions in shares of AllianceBernstein Exchange Reserves for the year ended November 30, 2013 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
November 30, 2012
(000)
|
|
Purchases
at Cost
(000)
|
|
|
Sales
Proceeds
(000)
|
|
|
Market Value
November 30, 2013
(000)
|
|
|
$ 5,165
|
|
$
|
46,708
|
|
|
$
|
49,295
|
|
|
$
|
2,578
|
|
NOTE F
Capital Stock
Each class consists of 3,000,000,000 authorized shares. Transactions
in capital shares for each class were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
Amount
|
|
|
|
|
|
|
Year Ended
November 30,
2013
|
|
|
Year Ended
November 30,
2012
|
|
|
|
|
Year Ended
November 30,
2013
|
|
|
Year Ended
November 30,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
2,585,533
|
|
|
|
2,204,517
|
|
|
|
|
$
|
35,203,401
|
|
|
$
|
26,404,182
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
348,667
|
|
|
|
188,642
|
|
|
|
|
|
4,410,629
|
|
|
|
1,986,162
|
|
|
|
|
|
|
|
|
|
Shares converted from Class B
|
|
|
79,783
|
|
|
|
76,658
|
|
|
|
|
|
1,075,752
|
|
|
|
917,220
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(3,838,050
|
)
|
|
|
(1,615,152
|
)
|
|
|
|
|
(50,405,942
|
)
|
|
|
(19,045,595
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease)
|
|
|
(824,067
|
)
|
|
|
854,665
|
|
|
|
|
$
|
(9,716,160
|
)
|
|
$
|
10,261,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
20,400
|
|
|
|
33,120
|
|
|
|
|
$
|
272,188
|
|
|
$
|
391,436
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
15,308
|
|
|
|
10,002
|
|
|
|
|
|
190,429
|
|
|
|
103,962
|
|
|
|
|
|
|
|
|
|
Shares converted to Class A
|
|
|
(81,273
|
)
|
|
|
(78,205
|
)
|
|
|
|
|
(1,075,752
|
)
|
|
|
(917,220
|
)
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(71,608
|
)
|
|
|
(57,770
|
)
|
|
|
|
|
(937,735
|
)
|
|
|
(672,724
|
)
|
|
|
|
|
|
|
|
|
Net decrease
|
|
|
(117,173
|
)
|
|
|
(92,853
|
)
|
|
|
|
$
|
(1,550,870
|
)
|
|
$
|
(1,094,546
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
491,233
|
|
|
|
166,586
|
|
|
|
|
$
|
6,556,259
|
|
|
$
|
1,976,839
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
67,919
|
|
|
|
40,719
|
|
|
|
|
|
851,017
|
|
|
|
424,719
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(379,384
|
)
|
|
|
(369,058
|
)
|
|
|
|
|
(4,996,872
|
)
|
|
|
(4,315,564
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease)
|
|
|
179,768
|
|
|
|
(161,753
|
)
|
|
|
|
$
|
2,410,404
|
|
|
$
|
(1,914,006
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
31
|
|
Notes to Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
Amount
|
|
|
|
|
|
|
Year Ended
November 30,
2013
|
|
|
Year Ended
November 30,
2012
|
|
|
|
|
Year Ended
November 30,
2013
|
|
|
Year Ended
November 30,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisor Class
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
990,230
|
|
|
|
254,057
|
|
|
|
|
$
|
13,170,101
|
|
|
$
|
2,963,691
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
22,839
|
|
|
|
14,084
|
|
|
|
|
|
286,858
|
|
|
|
146,980
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(610,210
|
)
|
|
|
(150,432
|
)
|
|
|
|
|
(7,935,252
|
)
|
|
|
(1,745,452
|
)
|
|
|
|
|
|
|
|
|
Net increase
|
|
|
402,859
|
|
|
|
117,709
|
|
|
|
|
$
|
5,521,707
|
|
|
$
|
1,365,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
317,585
|
|
|
|
337,986
|
|
|
|
|
$
|
4,226,197
|
|
|
$
|
3,992,778
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
42,856
|
|
|
|
20,275
|
|
|
|
|
|
536,556
|
|
|
|
211,475
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(341,142
|
)
|
|
|
(214,172
|
)
|
|
|
|
|
(4,517,782
|
)
|
|
|
(2,524,717
|
)
|
|
|
|
|
|
|
|
|
Net increase
|
|
|
19,299
|
|
|
|
144,089
|
|
|
|
|
$
|
244,971
|
|
|
$
|
1,679,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class K
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
437,657
|
|
|
|
254,188
|
|
|
|
|
$
|
5,869,001
|
|
|
$
|
3,023,227
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
43,083
|
|
|
|
24,961
|
|
|
|
|
|
541,560
|
|
|
|
260,754
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(401,934
|
)
|
|
|
(234,263
|
)
|
|
|
|
|
(5,387,472
|
)
|
|
|
(2,757,738
|
)
|
|
|
|
|
|
|
|
|
Net increase
|
|
|
78,806
|
|
|
|
44,886
|
|
|
|
|
$
|
1,023,089
|
|
|
$
|
526,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares sold
|
|
|
60,859
|
|
|
|
34,980
|
|
|
|
|
$
|
840,738
|
|
|
$
|
409,995
|
|
|
|
|
|
|
|
|
|
Shares issued in reinvestment of dividends
|
|
|
8,619
|
|
|
|
9,886
|
|
|
|
|
|
108,681
|
|
|
|
103,369
|
|
|
|
|
|
|
|
|
|
Shares redeemed
|
|
|
(66,429
|
)
|
|
|
(124,622
|
)
|
|
|
|
|
(876,119
|
)
|
|
|
(1,518,220
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease)
|
|
|
3,049
|
|
|
|
(79,756
|
)
|
|
|
|
$
|
73,300
|
|
|
$
|
(1,004,856
|
)
|
|
|
|
|
|
|
|
For the year ended November 30, 2013, a third party vendor reimbursed the Fund $47,779 for losses incurred due to a
regulatory settlement. This amount is presented in the Fund’s statement of changes in net assets. Neither the Fund nor its affiliates were involved in the proceedings or the calculation of the payment.
NOTE G
Risks Involved in
Investing in the Fund
Concentration of Risk
—Although the Fund does not invest directly in real estate, it invests primarily in
Real Estate Equity Securities and has a policy of concentration of its investments in the real estate industry. Therefore, an investment in the Fund is subject to certain risks associated with the direct ownership of real estate and with the real
estate industry in general. To the extent that assets underlying the Fund’s investments are concentrated geographically, by property type or in certain other respects, the Fund may be subject to additional risks.
|
|
|
|
|
32
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
In addition, investing in Real Estate Investment Trusts (“REITs”) involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs
are dependent upon management skills, are not diversified, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for tax-free pass-through of
income under the Internal Revenue Code and failing to maintain their exemptions from registration under the 1940 Act. REITs (especially mortgage REITs) also are subject to interest rate risks.
Foreign Securities Risk
—Investing in securities of foreign companies or foreign governments involves special risks which include changes in
foreign currency exchange rates and the possibility of future political and economic developments which could adversely affect the value of such securities. Moreover, securities of many foreign companies or foreign governments and their markets may
be less liquid and their prices more volatile than those of comparable U.S. companies or of the U.S. government.
Currency
Risk
—This is the risk that changes in foreign currency exchange rates may negatively affect the value of the Fund’s investments or reduce the returns of the Fund. For example, the value of the Fund’s investments in foreign
currency-denominated securities or currencies may decrease if the U.S. dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the U.S. dollar). Currency markets are generally
not as regulated as securities markets. Independent of the Fund’s investments in securities denominated in foreign currencies, the Fund’s positions in various foreign currencies may cause the Fund to experience investment losses due to the
changes in exchange rates and interest rates.
Derivatives Risk
—The Fund may enter into derivative transactions such as forwards,
options, futures and swaps. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Fund, and subject to counterparty risk to a greater degree than more traditional
investments. Derivatives may result in significant losses, including losses that are far greater than the value of the derivatives reflected in the statement of assets and liabilities.
Leverage Risk
—When the Fund borrows money or otherwise leverages its investments, its performance may be volatile because leverage tends to exaggerate the effect of any increase or decrease in
the value of the Fund’s investments. The Fund may create leverage through the use of reverse repurchase arrangements, forward currency exchange contracts, forward commitments, dollar rolls or futures contracts or by borrowing money. The use of
derivative instruments by the Fund, such as forwards, futures, options and swaps, may also result in a form of leverage. Leverage may result in higher returns to the Fund than if the Fund were not leveraged, but may also adversely affect returns,
particularly if the market is declining.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
33
|
|
Notes to Financial Statements
Indemnification Risk
—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. Therefore, the Fund has not accrued any liability in connection with these
indemnification provisions.
NOTE H
Joint Credit Facility
A number of open-end mutual funds managed by the Adviser,
including the Fund, participate in a $140 million revolving credit facility (the “Facility”) intended to provide short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment
fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the year ended November 30, 2013.
NOTE I
Distributions to
Shareholders
The tax character of distributions paid during the fiscal years ended November 30, 2013 and November 30, 2012 were
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
$
|
8,001,450
|
|
|
$
|
3,677,216
|
|
|
|
|
|
|
|
|
|
|
|
|
Total taxable distributions paid
|
|
$
|
8,001,450
|
|
|
$
|
3,677,216
|
|
|
|
|
|
|
|
|
|
|
|
As of November 30, 2013, the components of accumulated earnings/(deficit) on a tax basis were as follows:
|
|
|
|
|
|
|
Undistributed ordinary income
|
|
$
|
4,207,390
|
|
|
Accumulated capital and other losses
|
|
|
(57,635,299
|
)
(a)
|
|
Unrealized appreciation/(depreciation)
|
|
|
13,256,178
|
(b)
|
|
|
|
|
|
|
|
Total accumulated earnings/(deficit)
|
|
$
|
(40,171,731
|
)
|
|
|
|
|
|
|
|
(a)
|
|
As of November 30, 2013, the Fund had a net capital loss carryforward of $57,635,299.During the fiscal year, the Fund utilized $7,899,466 of
capital loss carryforwards to offset current year net realized gains.
|
|
(b)
|
|
The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the tax deferral of losses on
wash sales, the tax treatment of passive foreign investment companies (PFICs), and the realization for tax purposes of gains/losses on certain derivative instruments.
|
For tax purposes, net capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses incurred in taxable years beginning after
December 22, 2010 for an indefinite period. These post-enactment capital losses must be utilized prior to the pre-enactment capital losses,
|
|
|
|
|
34
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Notes to Financial Statements
which are subject to expiration. Post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered short-term as
under previous regulation.
As of November 30, 2013, the Fund had a net capital loss carryforward of $57,635,299 which will expire as
follows:
|
|
|
|
|
|
|
Short-Term
Amount
|
|
Long-Term
Amount
|
|
Expiration
|
|
$ 9,063,430
|
|
n/a
|
|
2016
|
|
46,626,013
|
|
n/a
|
|
2017
|
|
1,945,856
|
|
n/a
|
|
2018
|
During the current fiscal year, permanent differences primarily due to foreign currency reclassifications, proceeds from
third party regulatory settlements, and the tax treatment of passive foreign investment companies (PFICs) resulted in a net decrease in distributions in excess of net investment income, a net increase in accumulated net realized loss on investment
and foreign currency transactions, and a net decrease in additional paid-in capital. These reclassifications had no effect on net assets.
NOTE J
Recent Accounting
Pronouncement
In December 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update
(“ASU”) related to disclosures about offsetting assets and liabilities in financial statements. The amendments in this update require an entity to disclose both gross and net information for derivatives and other financial instruments that
are either offset in the statement of assets and liabilities or subject to an enforceable master netting arrangement or similar agreement. In January 2013, the FASB issued an ASU to clarify the scope of disclosures about offsetting assets and
liabilities. The ASU limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements and securities lending transactions. The ASU is effective during interim or annual reporting periods beginning on or after
January 1, 2013. At this time, management is evaluating the implication of this ASU and its impact on the financial statements has not been determined.
NOTE K
Subsequent Events
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements
are issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements through this date.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
35
|
|
Notes to Financial Statements
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.91
|
|
|
|
$ 10.89
|
|
|
|
$ 11.47
|
|
|
|
$ 10.46
|
|
|
|
$ 7.43
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.28
|
|
|
|
.22
|
|
|
|
.12
|
|
|
|
.16
|
|
|
|
.20
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.98
|
|
|
|
2.19
|
|
|
|
(.34
|
)
|
|
|
1.39
|
|
|
|
2.92
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.26
|
|
|
|
2.41
|
|
|
|
(.22
|
)
|
|
|
1.55
|
|
|
|
3.12
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.78
|
)
|
|
|
(.39
|
)
|
|
|
(.36
|
)
|
|
|
(.54
|
)
|
|
|
(.09
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.39
|
|
|
|
$ 12.91
|
|
|
|
$ 10.89
|
|
|
|
$ 11.47
|
|
|
|
$ 10.46
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return
based on net asset
value
(b)
|
|
|
10.10
|
%*
|
|
|
22.95
|
%
|
|
|
(2.08
|
)%
|
|
|
15.50
|
%
|
|
|
42.59
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$79,216
|
|
|
|
$87,013
|
|
|
|
$64,116
|
|
|
|
$79,631
|
|
|
|
$75,106
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.40
|
%
|
|
|
1.50
|
%
|
|
|
1.45
|
%
|
|
|
1.58
|
%
(c)
|
|
|
1.76
|
%
|
|
Net investment income
|
|
|
2.12
|
%
|
|
|
1.84
|
%
|
|
|
1.04
|
%
|
|
|
1.52
|
%
(c)
|
|
|
2.40
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
36
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.60
|
|
|
|
$ 10.62
|
|
|
|
$ 11.20
|
|
|
|
$ 10.27
|
|
|
|
$ 7.33
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.18
|
|
|
|
.13
|
|
|
|
.03
|
|
|
|
.08
|
|
|
|
.14
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.96
|
|
|
|
2.14
|
|
|
|
(.34
|
)
|
|
|
1.35
|
|
|
|
2.86
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.14
|
|
|
|
2.27
|
|
|
|
(.31
|
)
|
|
|
1.43
|
|
|
|
3.00
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.66
|
)
|
|
|
(.29
|
)
|
|
|
(.27
|
)
|
|
|
(.50
|
)
|
|
|
(.06
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.08
|
|
|
|
$ 12.60
|
|
|
|
$ 10.62
|
|
|
|
$ 11.20
|
|
|
|
$ 10.27
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return
based on net asset
value
(b)
|
|
|
9.31
|
%*
|
|
|
21.91
|
%
|
|
|
(2.89
|
)%
|
|
|
14.58
|
%
|
|
|
41.29
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$2,531
|
|
|
|
$3,915
|
|
|
|
$4,284
|
|
|
|
$6,532
|
|
|
|
$8,591
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
2.13
|
%
|
|
|
2.30
|
%
|
|
|
2.24
|
%
|
|
|
2.38
|
%
(c)
|
|
|
2.61
|
%
|
|
Net investment income
|
|
|
1.36
|
%
|
|
|
1.16
|
%
|
|
|
.27
|
%
|
|
|
.73
|
%
(c)
|
|
|
1.70
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
37
|
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.71
|
|
|
|
$ 10.72
|
|
|
|
$ 11.29
|
|
|
|
$ 10.34
|
|
|
|
$ 7.37
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.19
|
|
|
|
.14
|
|
|
|
.04
|
|
|
|
.08
|
|
|
|
.14
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.96
|
|
|
|
2.15
|
|
|
|
(.34
|
)
|
|
|
1.37
|
|
|
|
2.89
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.15
|
|
|
|
2.29
|
|
|
|
(.30
|
)
|
|
|
1.45
|
|
|
|
3.03
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.68
|
)
|
|
|
(.30
|
)
|
|
|
(.27
|
)
|
|
|
(.50
|
)
|
|
|
(.06
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.18
|
|
|
|
$ 12.71
|
|
|
|
$ 10.72
|
|
|
|
$ 11.29
|
|
|
|
$ 10.34
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return
based on net asset
value
(b)
|
|
|
9.34
|
%*
|
|
|
22.02
|
%
|
|
|
(2.78
|
)%
|
|
|
14.68
|
%
|
|
|
41.47
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$22,058
|
|
|
|
$18,989
|
|
|
|
$17,750
|
|
|
|
$20,629
|
|
|
|
$19,616
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
2.11
|
%
|
|
|
2.23
|
%
|
|
|
2.17
|
%
|
|
|
2.31
|
%
(c)
|
|
|
2.50
|
%
|
|
Net investment income
|
|
|
1.46
|
%
|
|
|
1.18
|
%
|
|
|
.31
|
%
|
|
|
.78
|
%
(c)
|
|
|
1.69
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
38
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisor Class
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.85
|
|
|
|
$ 10.86
|
|
|
|
$ 11.44
|
|
|
|
$ 10.41
|
|
|
|
$ 7.39
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.32
|
|
|
|
.26
|
|
|
|
.15
|
|
|
|
.19
|
|
|
|
.22
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.97
|
|
|
|
2.16
|
|
|
|
(.33
|
)
|
|
|
1.39
|
|
|
|
2.90
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.29
|
|
|
|
2.42
|
|
|
|
(.18
|
)
|
|
|
1.58
|
|
|
|
3.12
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.81
|
)
|
|
|
(.43
|
)
|
|
|
(.40
|
)
|
|
|
(.55
|
)
|
|
|
(.10
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.33
|
|
|
|
$ 12.85
|
|
|
|
$ 10.86
|
|
|
|
$ 11.44
|
|
|
|
$ 10.41
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return based on net asset
value
(b)
|
|
|
10.46
|
%*
|
|
|
23.23
|
%
|
|
|
(1.80
|
)%
|
|
|
15.94
|
%
|
|
|
42.90
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$13,274
|
|
|
|
$7,622
|
|
|
|
$5,161
|
|
|
|
$7,045
|
|
|
|
$4,675
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.10
|
%
|
|
|
1.20
|
%
|
|
|
1.15
|
%
|
|
|
1.28
|
%
(c)
|
|
|
1.46
|
%
|
|
Net investment income
|
|
|
2.37
|
%
|
|
|
2.16
|
%
|
|
|
1.29
|
%
|
|
|
1.81
|
%
(c)
|
|
|
2.64
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
39
|
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class R
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.77
|
|
|
|
$ 10.79
|
|
|
|
$ 11.39
|
|
|
|
$ 10.40
|
|
|
|
$ 7.40
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.25
|
|
|
|
.19
|
|
|
|
.09
|
|
|
|
.14
|
|
|
|
.18
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.96
|
|
|
|
2.17
|
|
|
|
(.34
|
)
|
|
|
1.38
|
|
|
|
2.92
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.21
|
|
|
|
2.36
|
|
|
|
(.25
|
)
|
|
|
1.52
|
|
|
|
3.10
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.76
|
)
|
|
|
(.38
|
)
|
|
|
(.35
|
)
|
|
|
(.53
|
)
|
|
|
(.10
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.22
|
|
|
|
$ 12.77
|
|
|
|
$ 10.79
|
|
|
|
$ 11.39
|
|
|
|
$ 10.40
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return based on net asset
value
(b)
|
|
|
9.78
|
%*
|
|
|
22.64
|
%
|
|
|
(2.36
|
)%
|
|
|
15.32
|
%
|
|
|
42.45
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$9,477
|
|
|
|
$8,904
|
|
|
|
$5,970
|
|
|
|
$6,186
|
|
|
|
$4,768
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.65
|
%
|
|
|
1.74
|
%
|
|
|
1.69
|
%
|
|
|
1.75
|
%
(c)
|
|
|
1.83
|
%
|
|
Net investment income
|
|
|
1.89
|
%
|
|
|
1.66
|
%
|
|
|
.79
|
%
|
|
|
1.32
|
%
(c)
|
|
|
2.12
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
40
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class K
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.84
|
|
|
|
$ 10.85
|
|
|
|
$ 11.44
|
|
|
|
$ 10.42
|
|
|
|
$ 7.40
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.30
|
|
|
|
.24
|
|
|
|
.13
|
|
|
|
.17
|
|
|
|
.22
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.96
|
|
|
|
2.16
|
|
|
|
(.34
|
)
|
|
|
1.40
|
|
|
|
2.91
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.26
|
|
|
|
2.40
|
|
|
|
(.21
|
)
|
|
|
1.57
|
|
|
|
3.13
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.79
|
)
|
|
|
(.41
|
)
|
|
|
(.38
|
)
|
|
|
(.55
|
)
|
|
|
(.11
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.31
|
|
|
|
$ 12.84
|
|
|
|
$ 10.85
|
|
|
|
$ 11.44
|
|
|
|
$ 10.42
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return based on net asset
value
(b)
|
|
|
10.14
|
%*
|
|
|
22.98
|
%
|
|
|
(2.02
|
)%
|
|
|
15.75
|
%
|
|
|
42.92
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period
(000’s omitted)
|
|
|
$10,083
|
|
|
|
$8,713
|
|
|
|
$6,875
|
|
|
|
$8,133
|
|
|
|
$6,581
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.34
|
%
|
|
|
1.43
|
%
|
|
|
1.38
|
%
|
|
|
1.45
|
%
(c)
|
|
|
1.50
|
%
|
|
Net investment income
|
|
|
2.22
|
%
|
|
|
2.01
|
%
|
|
|
1.13
|
%
|
|
|
1.64
|
%
(c)
|
|
|
2.59
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
See footnote summary on page 42.
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
41
|
|
Financial Highlights
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class I
|
|
|
|
|
Year Ended November 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value,
beginning of period
|
|
|
$ 12.90
|
|
|
|
$ 10.90
|
|
|
|
$ 11.48
|
|
|
|
$ 10.45
|
|
|
|
$ 7.41
|
|
|
|
|
|
|
|
|
Income From Investment Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(a)
|
|
|
.34
|
|
|
|
.28
|
|
|
|
.17
|
|
|
|
.22
|
|
|
|
.24
|
|
|
Net realized and unrealized gain (loss) on investment and foreign currency transactions
|
|
|
.96
|
|
|
|
2.16
|
|
|
|
(.34
|
)
|
|
|
1.37
|
|
|
|
2.92
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value from operations
|
|
|
1.30
|
|
|
|
2.44
|
|
|
|
(.17
|
)
|
|
|
1.59
|
|
|
|
3.16
|
|
|
|
|
|
|
|
|
Less: Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.81
|
)
|
|
|
(.44
|
)
|
|
|
(.41
|
)
|
|
|
(.56
|
)
|
|
|
(.12
|
)
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$ 13.39
|
|
|
|
$ 12.90
|
|
|
|
$ 10.90
|
|
|
|
$ 11.48
|
|
|
|
$ 10.45
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment return based on net asset
value
(b)
|
|
|
10.50
|
%*
|
|
|
23.38
|
%
|
|
|
(1.65
|
)%
|
|
|
15.97
|
%
|
|
|
43.35
|
%
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000’s omitted)
|
|
|
$2,092
|
|
|
|
$1,976
|
|
|
|
$2,538
|
|
|
|
$2,597
|
|
|
|
$3,364
|
|
|
Ratio to average net
assets of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
1.03
|
%
|
|
|
1.10
|
%
|
|
|
1.05
|
%
|
|
|
1.11
|
%
(c)
|
|
|
1.19
|
%
|
|
Net investment income
|
|
|
2.53
|
%
|
|
|
2.36
|
%
|
|
|
1.42
|
%
|
|
|
2.02
|
%
(c)
|
|
|
2.88
|
%
|
|
Portfolio turnover rate
|
|
|
115
|
%
|
|
|
108
|
%
|
|
|
71
|
%
|
|
|
70
|
%
|
|
|
67
|
%
|
|
(a)
|
|
Based on average shares outstanding.
|
|
(b)
|
|
Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and
distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charge or contingent deferred sales charge is not reflected in the calculation of total investment return. Total return does not reflect
the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return for a period of less than one year is not annualized.
|
|
(c)
|
|
The ratio includes expenses attributable to costs of proxy solicitation.
|
|
*
|
|
Includes the impact of proceeds received and credited to the Fund resulting from third party regulatory settlements, which enhanced the Fund’s performance for
the year ended November 30, 2013 by 0.03%.
|
See notes to financial statements.
|
|
|
|
|
42
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
Financial Highlights
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
AllianceBernstein Global Real Estate Investment Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
AllianceBernstein Global Real Estate Investment Fund, Inc. (“the “Fund”), including the portfolio of investments, as of November 30, 2013, and the related statement of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s
management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2013, by correspondence with the custodian and others, or by other appropriate auditing procedures where
replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial
statements and financial highlights referred to above present fairly, in all material respects, the financial position of AllianceBernstein Global Real Estate Investment Fund, Inc. at November 30, 2013, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
New York, New York
January 27, 2014
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
43
|
|
Report of Independent Registered Public Accounting Firm
2013 FEDERAL TAX INFORMATION
(unaudited)
For Federal income tax purposes, the following information is furnished with respect to
the distributions paid by the Fund during the taxable year ended November 30, 2013. For corporate shareholders, 1.07% of dividends paid qualify for the dividends received deduction.
The Fund intends to make an election to pass through foreign taxes to its shareholders. For the taxable year ended November 30, 2013, $135,799 of foreign taxes may be passed through and the associated
foreign source income for information reporting purposes is $2,627,196.
For the taxable year ended November 30, 2013, the Fund designates
$462,800 as the maximum amount that may be considered qualified dividend income for individual shareholders.
Shareholders should not use the
above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2014.
|
|
|
|
|
44
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
2013 Federal Tax Information
THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS
SUMMARY OF SENIOR
OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT
1
The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and the AllianceBernstein Global Real Estate Investment Fund,
Inc. (the “Fund”),
2
prepared by Philip L.
Kirstein, the Senior Officer of the Fund for the Directors of the Fund, as required by the August 2004 agreement between the Adviser and the New York State Attorney General (the “NYAG”). The Senior Officer’s evaluation of the
Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Directors to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the “40 Act”) and applicable state
law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Fund which was provided to the Directors in connection with their review
of the proposed approval of the continuance of the Investment Advisory Agreement.
The Senior Officer’s evaluation considered the
following factors:
|
|
1.
|
Advisory fees charged to institutional and other clients of the Adviser for like services;
|
|
|
2.
|
Advisory fees charged by other mutual fund companies for like services;
|
|
|
3.
|
Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit;
|
|
|
4.
|
Profit margins of the Adviser and its affiliates from supplying such services;
|
|
|
5.
|
Possible economies of scale as the Fund grows larger; and
|
|
|
6.
|
Nature and quality of the Adviser’s services including the performance of the Fund.
|
These factors, with the exception of the first factor, are generally referred to as the “
Gartenberg
factors,” which were articulated by the United States Court of Appeals for the Second
Circuit in 1982.
Gartenberg v. Merrill Lynch Asset Management, Inc.
, 694 F. 2d 923 (2d Cir. 1982). On March 30, 2010, the Supreme Court held the
Gartenberg
decision was correct in its basic formulation of what §36(b)
requires: to face liability under §36(b), “an investment adviser
|
1
|
|
The information in the fee evaluation was completed on April 22, 2013 and discussed with the Board of Directors on April 30 – May 2, 2013.
|
|
2
|
|
Future references to the Fund do not include “AllianceBernstein.” References in the fee summary pertaining to performance and expense ratio rankings refer
to the Class A shares of the Fund.
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
53
|
|
must charge a fee that is so disproportionately large that it bears no reasonable relationship to the services rendered and could not have been the product of arm’s length bargaining.”
Jones v. Harris Associates L.P.,
130 S. Ct. 1418 (2010)
.
In
Jones
, the Court stated the
Gartenberg
approach fully incorporates the correct understanding of fiduciary duty within the context of section 36(b) and noted with
approval that “
Gartenberg
insists that all relevant circumstances be taken into account” and “uses the range of fees that might result from arm’s length bargaining as the benchmark for reviewing challenged
fees.”
3
FUND ADVISORY FEES, NET ASSETS & EXPENSE RATIOS
The Adviser proposed that the Fund pays the advisory fee set forth in the table below for receiving the services to be provided pursuant to the Investment Advisory Agreement. The fee schedule below,
implemented in January 2004 in consideration of the Adviser’s settlement with the NYAG in December 2003, is based on a master schedule that contemplates eight categories of funds with almost all funds in each category having the same advisory
fee schedule.
4
|
|
|
|
|
|
|
|
|
|
|
Category
|
|
Advisory Fee
5
|
|
Net Assets
03/31/13
($MIL)
|
|
|
Fund
|
|
Value
|
|
0.55% on 1st $2.5 billion
0.45% on next $2.5
billion
0.40% on the balance
|
|
$
|
157.3
|
|
|
Global Real Estate Investment Fund, Inc.
|
The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting,
administrative and other services provided to the Fund. During the Fund’s most recently completed fiscal year, the Adviser received $57,208 (0.048% of the Fund’s average daily net assets) for such services.
Set forth below are the Fund’s total expense ratios for the most recently completed fiscal year:
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Total Expense
Ratio
|
|
|
Fiscal Year
|
|
Global Real Estate Investment Fund, Inc.
|
|
Advisor
Class A
Class B
Class C
Class R
Class K
Class I
|
|
|
1.20
1.50
2.30
2.23
1.74
1.43
1.10
|
%
%
%
%
%
%
%
|
|
November 30
|
|
3
|
|
Jones v. Harris
at 1427.
|
|
4
|
|
Most of the AllianceBernstein Mutual Funds, which the Adviser manages, were affected by the Adviser’s settlement with the NYAG.
|
|
5
|
|
The advisory fee of the Fund is based on the percentage of the Fund’s average daily net assets and is paid on a monthly basis.
|
|
|
|
|
|
54
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
|
I.
|
ADVISORY FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS
|
The advisory fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and
sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services to be provided by the Adviser to the Fund that are not provided to
non-investment company clients include providing office space and personnel to serve as Fund Officers, who among other responsibilities make the certifications required under the Sarbanes–Oxley Act of 2002, and coordinating with and monitoring
the Fund’s third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Fund are costly than those for institutional
client assets due to the greater complexities and time required for investment companies, although as previously noted, the Adviser is reimbursed for providing such services. The Adviser also believes that it incurs substantial entrepreneurial risk
when offering a new mutual fund, since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be
competitive and assets are acquired one account at a time. In addition, managing the cash flow of an investment company may be more difficult than managing that of a stable pool of assets, such as an institutional account with little cash movement
in either direction, particularly, if a fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable
pool of assets. Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and
reputational risks associated with institutional accounts are greater than previously thought, although still not equal to those related to the mutual fund industry.
Notwithstanding the Adviser’s view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, the Supreme Court has
indicated consideration should be given to the advisory fees charged to institutional accounts with a similar investment style as the Fund.
6
In addition to the AllianceBernstein institutional
|
6
|
|
The Supreme Court stated that “courts may give such comparisons the weight that they merit in light of the similarities and differences between the services
that the clients in question require, but the courts must be wary of inapt comparisons.” Among the significant differences the Supreme Court noted that may exist between services provided to mutual funds and institutional accounts are
“higher marketing costs.”
Jones v. Harris
at 1428.
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
55
|
|
fee schedule, set forth below is what would have been the effective advisory fee of the Fund had the AllianceBernstein institutional fee schedule been applicable to the Fund based on
March 31, 2013 net assets:
7
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Net Assets
03/31/13
($MIL)
|
|
AllianceBernstein
Institutional
Fee Schedule
|
|
Effective
AB Inst.
Adv. Fee
|
|
|
Fund
Advisory
Fee
|
|
Global Real Estate Investment Fund, Inc.
|
|
$157.3
|
|
Global REIT
0.60% on 1st $25 million
0.50% on next $25 million
0.45% on the balance
Minimum account size: $25m
|
|
|
0.482%
|
|
|
0.550%
|
The adviser also manages the AllianceBernstein Variable Products Series Fund, Inc.
(“AVPS”), which is available through variable annuity and variable life contracts offered by other financial institutions and offers policyholders the option to utilize certain AVPS portfolios as the investment option underlying their
insurance contracts. Set forth below is the fee schedule of the AVPS portfolio that has a substantially similar investment style as the Fund.
8
Also shown is the Fund’s advisory fee and what would have been the effective advisory fee of the Fund had the AVPS
fee schedule been applicable to the Fund based on March 31, 2013 net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
AVPS
Portfolio
|
|
Fee Schedule
|
|
Effective
AVPS
Adv. Fee
|
|
|
Fund
Advisory
Fee
|
|
Global Real Estate Investment Fund, Inc.
9
|
|
Real Estate Investment Portfolio
|
|
0.55% on first $2.5 billion
0.45% on next $2.5
billion
0.40% on the balance
|
|
|
0.550%
|
|
|
0.550%
|
|
7
|
|
The Adviser has indicated that with respect to institutional accounts with assets greater than $300 million, it will negotiate a fee schedule. Discounts that are
negotiated vary based upon each client relationship.
|
|
8
|
|
The AVPS portfolio was also affected by the settlement between the Adviser and the NYAG. As a result, the Fund has the same breakpoints in its advisory fee schedule
as the AVPS portfolio.
|
|
9
|
|
The investment guidelines of the Fund are not as restrictive as that of the AVPS portfolio. The Fund may invest in equity securities of non-U.S. REITS and other
non-U.S. real estate industry companies in contrast to the AVPS portfolio, which invests primarily in equities of U.S. REITS and other U.S. real estate industry companies.
|
|
|
|
|
|
56
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
The Adviser also manages and sponsors retail mutual funds, which are organized in jurisdictions outside the United States, generally Luxembourg and Japan, and sold to non-United States resident investors.
The Adviser charges the fees set forth below for the Luxembourg fund that has a somewhat similar investment style as the Fund:
|
|
|
|
|
|
|
Fund
|
|
Luxembourg Fund
|
|
Fee
10
|
|
Global Real Estate Investment Fund, Inc.
|
|
Global Real Estate Securities Portfolio
Class A
Class I (Institutional)
|
|
1.75%
0.95%
|
The Adviser represented that it does not sub-advise any registered investment company with a substantially similar
investment style as the Fund.
|
II.
|
MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.
|
Lipper, Inc. (“Lipper”), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services
offered by other investment advisers.
11
Lipper’s
analysis included the comparison of the Fund’s contractual management fee, estimated at the approximate current asset level of the Fund, to the median of the Fund’s Lipper Expense Group (“EG”)
12
and the Fund’s contractual management fee ranking.
13
Lipper describes an EG as a representative sample of comparable funds. Lipper’s standard methodology for screening funds to be included in an EG entails the consideration of several fund criteria,
including fund type, investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, expense components and attributes. An EG will typically consist of seven to twenty funds.
|
10
|
|
Class A shares of the fund are charged an “all-in” fee, which covers investment advisory services and distribution related services, unlike Class I
shares, whose fee is for investment advisory services only.
|
|
11
|
|
The Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since “these comparisons are problematic because these fees,
like those challenged, may not be the product of negotiations conducted at arm’s length.”
Jones v. Harris
at 1429.
|
|
12
|
|
Lipper does not consider average account size when constructing EGs. Funds with relatively small average account sizes tend to have higher transfer agent expense
ratio than comparable sized funds that have relatively large average account sizes. Note that there are limitations on Lipper expense category data because different funds categorize expenses differently.
|
|
13
|
|
The contractual management fee is calculated by Lipper using the Fund’s contractual management fee rate at a hypothetical asset level. The hypothetical asset
level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Lipper’s total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of “1”
would mean that the Fund had the lowest effective fee rate in the Lipper peer group.
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Contractual
Management
Fee (%)
14
|
|
|
Lipper EG
Median (%)
|
|
|
Lipper EG
Rank
|
|
|
Global Real Estate Investment Fund, Inc.
|
|
|
0.550
|
|
|
|
0.908
|
|
|
|
1/9
|
|
Lipper also compared the Fund’s total expense ratio to the medians of the Fund’s EG and Lipper Expense Universe
(“EU”).
15
The EU is a broader group compared to
the EG, consisting of all funds that have the same investment classifications/objective and load type as the subject Fund. Set forth below is Lipper’s comparison of the Fund’s total expense ratio and the medians of the Fund’s EG and
EU. The Fund’s total expense ratio rankings are also shown.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Total
Expense
Ratio (%)
16
|
|
|
Lipper EG
Median (%)
|
|
|
Lipper EG
Rank
|
|
Lipper EU
Median (%)
|
|
|
Lipper EU
Rank
|
|
Global Real Estate Investment Fund, Inc.
|
|
|
1.502
|
|
|
|
1.450
|
|
|
6/9
|
|
|
1.380
|
|
|
13/18
|
Based on this analysis, the Fund has a more favorable ranking on a contractual management fee basis than on a total
expense ratio basis.
|
III.
|
COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE MANAGEMENT FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.
|
The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s
profitability in connection with investment advisory services provided to the Fund. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and
allocations utilized by both profitability systems. See Section IV for additional discussion.
|
IV.
|
PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.
|
The Fund’s profitability information, prepared by the Adviser for the Board of Directors, was reviewed by the Senior Officer and the consultant. The Adviser’s profitability from providing
investment advisory services to the Fund increased during calendar year 2012, relative to 2011.
|
14
|
|
The contractual management fee rate does not reflect any expense reimbursement payments made by the Fund to the Adviser for certain clerical, legal, accounting,
administrative, and other services.
|
|
15
|
|
Except for asset (size) comparability, Lipper uses the same criteria for selecting an EG when selecting an EU. Unlike the EG, the EU allows for the same adviser to
be represented by more than just one fund.
|
|
16
|
|
Most recently completed fiscal year end Class A total expense ratio.
|
|
|
|
|
|
58
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
In addition to the Adviser’s direct profits from managing the Fund, certain of the Adviser’s affiliates have business relationships with the Fund and may earn a profit from providing other
services to the Fund. The courts have referred to this type of business opportunity as “fall-out benefits” to the Adviser and indicated that such benefits should be factored into the evaluation of the total relationship between the Fund
and the Adviser. Neither case law nor common business practice precludes the Adviser’s affiliates from earning a reasonable profit on this type of relationship provided the affiliates’ charges and services are competitive and the
relationship otherwise complies with the 40 Act restrictions. These affiliates provide transfer agent, distribution and brokerage related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, front-end sales loads, contingent
deferred sales charges (“CDSC”) and brokerage commissions. In addition, the Adviser benefits from soft dollar arrangements which offset expenses the Adviser would otherwise incur.
AllianceBernstein Investments, Inc. (“ABI”), an affiliate of the Adviser, is the Fund’s principal underwriter. ABI and the Adviser have disclosed in the Fund’s prospectus that they may
make revenue sharing payments from their own resources, in addition to resources derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Fund. In 2012, ABI paid approximately 0.05% of the average monthly assets of the
AllianceBernstein Mutual Funds or approximately $19 million for distribution services and educational support (revenue sharing payments).
During the Fund’s most recently completed fiscal year, ABI received from the Fund $2,679, $504,349 and $4,246 in front-end sales charges, Rule 12b-1
and CDSC fees, respectively.
Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc.
(“ABIS”), the affiliated transfer agent for the Fund, are charged on a per account basis, based on the level of service provided and the class of share held by the account. ABIS also receives a fee per shareholder sub-account for each
account maintained by an intermediary on an omnibus basis. During the Fund’s most recently completed fiscal year, ABIS received $116,408 in fees from the Fund.
The Fund did not effect brokerage transactions through the Adviser’s affiliate, Sanford C. Bernstein & Co., LLC (“SCB & Co.”) nor its U.K. affiliate, Sanford C. Bernstein
Limited (“SCB Ltd.”), collectively “SCB,” and pay commissions for such transactions during the Fund’s most recently completed fiscal year. The Adviser represented that SCB’s profitability from any future business
conducted with the Fund would be comparable to the profitability of SCB’s dealings with other similar third party clients. In the ordinary course of business, SCB receives and pays liquidity rebates from electronic communications networks
(“ECNs”) derived from trading for its clients. These credits and charges are not being
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
59
|
|
passed onto any SCB client. The Adviser also receives certain soft dollar benefits from brokers that execute agency trades for its clients. These soft dollar benefits reduce the Adviser’s
cost of doing business and increase its profitability.
|
V.
|
POSSIBLE ECONOMIES OF SCALE
|
The Adviser has
indicated that economies of scale are being shared with shareholders through pricing to scale, breakpoints, fee reductions/waivers and enhancement to services.
In May 2012, an independent consultant, retained by the Senior Officer, provided the Board of Directors information on the Adviser’s firm-wide average costs from 2005 through 2011 and the potential
economies of scale. The independent consultant noted that from 2005 through 2007 the Adviser experienced significant growth in assets under management (“AUM”). During this period, operating expenses increased, in part to keep up
with growth, and in part reflecting market returns. However, from 2008 through the first quarter of 2009, AUM rapidly and significantly decreased due to declines in market value and client withdrawals. When AUM rapidly decreased, some operating
expenses categories, including base compensation and office space, adjusted more slowly during this period, resulting in an increase in average costs. Since 2009, AUM has experienced less significant changes. The independent consultant noted
that changes in operating expenses reflect changes in business composition and business practices in response to changes in financial markets. Finally, the independent consultant concluded that the increase in average cost and the decline in net
operating margin across the Adviser since late 2008 are inconsistent with the view that there are currently reductions in average costs due to economies of scale that can be shared with the AllianceBernstein Mutual Funds managed by the Adviser
through lower fees.
Previously, in February 2008, the independent consultant provided the Board of Directors an update of the Deli
17
study on advisory fees and various fund characteristics.
18
The independent consultant first reiterated the results of his
previous two dimensional comparison analysis (fund size and family size) with the Board of Directors.
19
The independent consultant then discussed the results of the
|
17
|
|
The Deli study, originally published in 2002 based on 1997 data and updated for the February 2008 Presentation, may be of diminished value due to the age of the data
used in the presentation and the changes experienced in the industry over the last four years.
|
|
18
|
|
As mentioned previously, the Supreme Court cautioned against accepting mutual fund fee comparisons without careful scrutiny since the fees may not be the product of
negotiations conducted at arm’s length. See
Jones v. Harris
at 1429.
|
|
19
|
|
The two dimensional analysis showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with
smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical
analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.
|
|
|
|
|
|
60
|
|
•
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE
INVESTMENT FUND
|
regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained
by various factors, but substantially by fund AUM, family AUM, index fund indicator and investment style. The independent consultant also compared the advisory fees of the AllianceBernstein Mutual Funds to similar funds managed by 19 other large
asset managers, regardless of the fund size and each Adviser’s proportion of mutual fund assets to non-mutual fund assets.
|
VI.
|
NATURE AND QUALITY OF THE ADVISER’S SERVICES, INCLUDING THE PERFORMANCE OF THE FUND
|
With assets under management of approximately $443 billion as of March 31, 2013, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to
the Fund.
The information prepared by Lipper shows the 1, 3, 5 and 10 year performance returns and rankings
20
of the Fund relative to its Lipper Performance Group
(“PG”) and Lipper Performance Universe (“PU”)
21
for the periods ended February 28, 2013.
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
Return (%)
|
|
|
PG
Median (%)
|
|
|
PU
Median (%)
|
|
|
PG Rank
|
|
PU Rank
|
|
1 year
|
|
|
21.15
|
|
|
|
18.51
|
|
|
|
18.50
|
|
|
1/9
|
|
5/22
|
|
3 year
|
|
|
14.97
|
|
|
|
13.98
|
|
|
|
14.37
|
|
|
2/9
|
|
5/20
|
|
5 year
|
|
|
3.22
|
|
|
|
3.10
|
|
|
|
3.10
|
|
|
3/8
|
|
7/16
|
|
10 year
|
|
|
10.74
|
|
|
|
11.02
|
|
|
|
11.65
|
|
|
2/2
|
|
4/4
|
|
20
|
|
The performance returns and rankings of the Fund are for the Fund’s Class A shares. Fund performance returns were provided by Lipper.
|
|
21
|
|
The Fund’s PG is identical to the Fund’s EG. The Fund’s PU is not identical to the Fund’s EU as the criteria for including/excluding a fund from
a PU is somewhat different from that of an EU.
|
|
22
|
|
The current Lipper investment classification/objective dictates the PG and PU throughout the life of the Fund even if a Fund had a different investment
classification/objective at a different point in time.
|
|
|
|
|
|
|
|
ALLIANCEBERNSTEIN GLOBAL REAL ESTATE INVESTMENT FUND
•
|
|
|
61
|
|
Set forth below are the 1, 3, 5 and 10 year and since inception performance returns of the Fund (in bold)
23
versus its benchmarks.
24
Fund and benchmark volatility and reward-to-variability ratio (“Sharpe Ratio”) information is also
shown.
25