AB Global High Yield Portfolio

Broadening Horizons in Search for Income

Why Global High Yield Bonds?

Today's market environment is challenging, with lots of unknowns. But investors’ need for income has not changed. The evolving high-yield markets make the case for a global, multi-sector approach to generating income. Here's why:

Go Global for More Opportunities

Seeking efficient income—maximizing income while managing downside risk—typically includes US high-yield (HY) corporate bonds because of their appealing return potential and relatively low correlation with Treasuries. However, there are also other avenues for generating efficient income that can be found outside the US.

The global HY corporate universe has grown rapidly over the years and is now US$1.9 trillion in size. It has also expanded beyond its traditional US focus, with the growth coming from other regions such as Europe and emerging markets. Given the current economic backdrop and a wide array of high-quality offerings, taking a global approach to bond investing opens more possibilities.

Historical and current analyses do not guarantee future results.
AUM based off of the Bloomberg US Aggregate Index and its components, Bloomberg US Corporate Index, S&P Levered Loan Index. As of November 30, 2024. Source: Bloomberg, J.P. Morgan and AB; SIFMA Research, 2024 Capital Markets Fact Book

Broad Exposure Allows for More Flexibility in Managing Risks

Global HY markets are also well diversified, with various sectors spanning across the world. Because each sector carries a unique risk-reward profile, bond investors can strategically adjust their allocations to mitigate risk and take on a more defensive stance when market conditions warrant it.

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# Historical analyses do not guarantee future results. EM: emerging-market; HY: high yield
Emerging-market high yield is represented by J.P. Morgan EMBI Global Non-Investment Grade; emerging-market corporates by J.P. Morgan CEMBI Broad Diversified; Pan-European high yield by Bloomberg Pan-European High Yield (Euro) USD hedged; Asia credit by J.P. Morgan Asia Credit Index; bank loans by S&P/LSTA Leveraged Loan Index; emerging-market local by J.P. Morgan GBI-EM (since 2002) and J.P. Morgan ELMI+ (prior to 2002); and US securitized by commercial mortgage-backed security, collateralized loan obligation and credit risk–sharing transaction market data aggregated internally. An investor cannot invest directly in an index or average and neither includes sales charges or operating expenses associated with an investment in a mutual fund, which would reduce total returns. As of 31 December 2023. Source: Bank of America, Bloomberg, CoreLogic, Credit Suisse, Fannie Mae, Freddie Mac, J.P. Morgan, Loan Syndications and Trading Association, and AB

Potential to Enhance Yields

Investing globally also has the potential to shore up yields and help generate risk-adjusted returns. Yield-to-worst (YTW), which helps investors assess the minimum yield they can expect from a bond under various scenarios, has historically foreshadowed future returns. With current YTW at compelling levels, HY corporates can potentially provide a good source of income, especially if investors can focus on higher-quality issuers whose default risk tends to be lower.

Since the last major default wave in 2020, strong corporate balance sheets, coupled with fewer low-rated issues coming online, have helped stabilize HY credit quality. As a result, many HY issuers today are higher rated, with lower leverage, better cash flow and less cyclicality.

And with fewer rate cuts anticipated, yields are likely to stay higher for longer, keeping returns attractive.

Historical analysis does not guarantee future results.
As of April 30, 2025. Source: Bloomberg and AllianceBernstein (AB)

High Yield Bonds Stack Up Well Alongside Equities

Historically, HY has delivered equity-like returns with roughly half the volatility. During previous major selloffs such as the dot-com crash, global financial crisis and the pandemic, equity returns fell more than HY returns, while HY rebounded faster. As such HY bonds can offer opportunities for investors seeking returns.

That said, investors should also be mindful that investing in HY bonds involves a higher level of risk including a greater likelihood of default than investment-grade debt.

Historical and current analyses do not guarantee future results.
US high yield is represented by the Bloomberg US Corporate High Yield Index; inception date: July 1, 1983. S&P 500 data since March 31, 1936. Annualized return and volatility are calculated based on data since inception. S&P 500 current yield is calculated as estimated forward dividend yield. US high-yield current yield is calculated at current yield to worst. Through March 31, 2025.
Source: Bloomberg, S&P and AB

Focus on Generating Efficient Income

As financial markets evolve, actively adjusting a portfolio’s exposures to focus on the most compelling opportunities throughout the cycle can be an effective way to navigate changing environments. While the US HY market remains the world’s largest HY market, it is possible to get that efficient income by tapping into more attractive yield opportunities across sectors that go beyond the US market and having better quality names.

Why AB Global High Yield Portfolio?

Long Track Record

Since its inception in September 1997, the Portfolio has delivered a total return of 5% per annum (A USD share class; Net of fees), or 4.9% ^ per annum (A USD share class; charges applied). It has also delivered a highly competitive and stable yield over time. In May, the AB Global High Yield Portfolio distributed an annualized dividend yield of 7.28% *. (source: AB, as of May 31, 2025)

Attractive Return Potential

A dynamic, global multisector approach aimed at providing high income to investors. It is focused on HY issuers located worldwide, including the US and emerging markets.

Active Management

With decades of combined experience, AB’s investment team has kept the portfolio in good stead. As active managers, we focus on both quantitative and fundamental research and analysis, drawing on firmwide expertise to build a high quality portfolio of fixed income securities and deliver differentiated returns.

^ Performance calculations are based on a single pricing basis, include the change in Net Asset Value and reinvestment of any distributions paid on Portfolio shares for the period shown, net of assumed front-end load (FEL) 2.5% for Class A.

* Dividends are not paid for all share classes and are not guaranteed. The share classes above intend to declare and pay dividends. Dividend amount/distribution rate is not guaranteed and dividends may be paid from capital or effectively out of the capital of the Portfolio, which may amount to a partial return or withdrawal of an investor’s original investment or from any capital gains attributable to that original investment and result in an immediate decrease of the Net Asset Value per Share. Annualized dividend yield is calculated with the following formula: [(Dividend of the month x 12) / NAV] x 100. Positive distribution yield does not imply positive return. The historical data provided above are for information purposes only and do not imply prospective yields of the Portfolio. For more information on the composition of distribution payments, please click here.

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Investment Risks to Consider

These and other risks are described in the Portfolio’s prospectus. Investment in the Portfolio entails certain risks. Investment returns and principal value of the Portfolio will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Some of the principal risks of investing in the Portfolio include:

Currency Risk: Currency movements in the underlying investments of a portfolio that is denominated in a currency different from that of the portfolio itself may significantly affect the NAV of that portfolio.

Credit Risks: The Portfolio will invest in fixed-income securities (including bonds) issued by companies and other entities and the Portfolio will be subject to the risk that a particular issuer may not fulfill its payment or other obligations in respect of such fixed-income securities. Generally, debt instruments with a lower credit rating or that are unrated are more susceptible to the credit risk of the issuers. In the event of a default or credit rating downgrading of the issuers of the fixed income securities, the Portfolio’s value may be adversely affected and investors may suffer a substantial loss as a result.

Derivatives Risk: The portfolio may invest in financial derivative instruments for investment purposes in addition to hedging and/or efficient portfolio management purposes and hence this may lead to a higher volatility to the net asset value of the Portfolio.

Emerging Markets Risks: The Portfolio will invest in emerging markets, which are subject to higher risks (for example, liquidity risk, currency risk, political risk, regulatory risk and economic risk) and higher volatility than portfolios investing in developed markets. Fluctuations in currency exchange rates may negatively affect the value of the investment or reduce returns - these risks are magnified in emerging or developing markets.

Fixed-income securities risk: The NAV of a portfolio invested in fixed-income securities will change in response to fluctuations in interest rates and currency exchange rates, as well as changes in credit quality of the issuer. Lower-rated securities and unrated securities of comparable quality may be subject to wider fluctuations in yield and market values than higher-rated securities.

Global Country Risk: Investments in issuers located in a particular country or geographic region may have more market, political and economic risks because of particular factors affecting that country or region.

Liquidity Risk: The risk that arises when adverse market conditions affect the ability to sell assets when necessary. Reduced liquidity may have a negative impact on the price of the assets.

Glossary:

Bloomberg US Aggregate Bond Index: A broad-based benchmark that measures the investment-grade, US dollar–denominated, fixed-rate, taxable bond market, including US Treasuries, government-related and corporate securities, mortgage-backed securities (MBS [agency fixed-rate and hybrid ARM pass-throughs]), asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS).

Bloomberg US Corporate Bond Index: Measures the investment grade, fixed-rate, taxable corporate bond market. It includes USD denominated securities publicly issued by US and non-US industrial, utility and financial issuers.

Bloomberg Global High-Yield Bond Index: Provides a broad-based measure of the global high-yield fixed-income markets. It represents the union of the US High-Yield, Pan-European High Yield, US Emerging Markets High-Yield, CMBS High Yield and Pan-European Emerging Markets High-Yield indices.

J.P. Morgan EMBI Global Non-Investment Grade: tracks non-investment grade (high yield) bonds from emerging markets.

J.P. Morgan CEMBI Broad Diversified: An expansion of the JPMorgan Corporate Emerging Markets Bond Index (CEMBI).

Bloomberg Pan-European High Yield Index: Measures the market of non-investment grade, fixed-rate corporate bonds denominated in the following currencies: euro, pounds sterling, Danish krone, Norwegian krone, Swedish krona, and Swiss franc. Inclusion is based on the currency of issue, and not the domicile of the issuer.

J.P. Morgan Asia Credit Index: Tracks total return performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and it is partitioned by country, sector and credit rating.

S&P/LSTA Leveraged Loan Index: Measures the performance of leveraged loan markets.

J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM): Tracks regularly traded, liquid, fixed-rate, domestic currency debt issues by emerging market governments.

J.P. Morgan Emerging Local Markets Index (ELMI): Tracks total returns for local currency-denominated money market instruments in the emerging markets.

Important information

The Portfolio is part of AB FCP I (referred to as “AB”). AB is a mutual investment fund (fonds communde placement) organized under the laws of the Grand Duchy of Luxembourg. Prior to 5 February 2016, AB’s legal name was ACMBernstein, its trading name was AllianceBernstein.

Investment in the Fund entails certain risks. Past performance is not a guide to future performance. Investment returns and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The Fund is meant as a vehicle for diversification and does not represent a complete investment program. Some of the principal risks of investing in the Fund include country risk, currency hedged share class risk, illiquid assets risk, focused portfolio risk, portfolio turnover risk, management risk, derivatives risk, borrowing risk, taxation risk, fixed income securities risk, interest rate risk, lower rated and unrated investments risk, prepayment risk, sovereign debt obligations risk and lower-or unrated securities risk. These and other risks are described in the Fund’s prospectus. Prospective investors should read the prospectus and Product Highlights Sheet carefully and discuss risk and the fund’s fees and charges with their financial adviser to determine if the investment is appropriate for them.

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Past performance, historical and current analyses, and expectations do not guarantee future results.

Investment involves risk. The information contained here reflects the views of AllianceBernstein L.P. or its affiliates and sources it believes are reliable as of the date of this publication. AllianceBernstein L.P. makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this publication. This document is for informational purposes only and does not constitute investment advice. AllianceBernsteinL.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AllianceBernstein or its affiliates.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.