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WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
WealthTrust-Arizona - Inflation/Deflation:  Harvesting the Inflation Opportunity
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WealthTrust-Arizona - Inflation/Deflation: Harvesting the Inflation Opportunity

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Workshop presented by WealthTrust-Arizona & special guest Walt Czaicki, vice president and senior portfolio manager from AllianceBernstein. …

Workshop presented by WealthTrust-Arizona & special guest Walt Czaicki, vice president and senior portfolio manager from AllianceBernstein.

Presentations highlights how a well-diversified mix of inflation-sensitive assets, which dynamically moves to exploit global growth and inflationary pressures, may benefit your portfolio.

Published in: Economy & Finance, Business
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  • 1. Real Assets: Seeking Inflation Protection and Profit Potential AllianceBernstein Real Asset Strategy September 30, 2011 Investment Products Offered: <ul><li>Are Not FDIC Insured </li></ul><ul><li>May Lose Value </li></ul><ul><li>Are Not Bank Guaranteed </li></ul>
  • 2. Inflation Already a Problem in Much of the World As of January 2011, most recent 12 months available except China Source: Bloomberg, IMF, AB Estimates
  • 3. Global Inflation Relevant for Real Asset Returns Recent Global Inflation Accelerations Average Move During Last Three Inflation Accelerations Accelerations Historical analysis and current estimates do not guarantee future results. As of November 30, 2010 Global Consumer Price Index (“CPI”) as represented by IMF Global Inflation Index, Real Assets as represented by equally weighted index of MSCI Commodity Producers Equity Index, FTSE EPRA/NAREIT Global Developed Market Total Return Index, DJ-UBS Total Return Commodity Index Source: Bloomberg, Factset and IMF
  • 4. Global Inflation Presents a Global Opportunity Set Forecasts are subject to change. As of February 12, 2011, BRIC = Brazil, Russia, India, China Source: Bloomberg 2011 Year-Over-Year CPI Consensus Forecasts Developed Market Average 1.9% BRIC Average 6.7%
  • 5. <ul><li>TIPS </li></ul><ul><li>REITs </li></ul><ul><li>Farmland </li></ul><ul><li>Timber </li></ul><ul><li>Commodity Stocks </li></ul><ul><li>Commodity Futures </li></ul><ul><li>Gold </li></ul><ul><li>Inflation Sensitivity </li></ul><ul><li>Reliability </li></ul><ul><li>Cost </li></ul>Key Questions Inflation Investments Source: AllianceBernstein TIPS-Treasury Inflation-Protected Securities REITs-Real Estate Investment Trusts Striving to Profit from Inflation: How We Aim to Achieve It Key Questions Inflation Investments
  • 6. Sensitivity: Varies by Asset Class Asset Class Inflation Betas 1965–2009 Historical analysis is not a guarantee of future results. Individuals cannot invest directly in an index. Total return beta to one-year inflation rate change in multivariate regression including lagged inflation rate. 10-year Treasury Inflation-Protected Securities (TIPS) are calculated from synthetic AllianceBernstein real yields estimated from actual inflation and nominal yield curve variables before 1999 and from Federal Reserve real yields thereafter. REITs (Real Estate) are sourced from the Ken French Data Library prior to 1972; they are represented by the NAREIT Equity REIT Index thereafter. Commodity Stocks are sourced from the Ken French Data Library and are weighted by market-capitalization. Commodity Futures and Precious Metals Futures prior to 1990 are on a US consumption–weighted basis and are sourced from AllianceBernstein series prior to 1970 and from the MJK Commodity Futures Database between 1970 and 1990; they are represented by the Dow Jones-UBS Commodity Futures Index (DJ-UBS) thereafter. All futures returns are fully collateralized by T-bills unless otherwise indicated. Real Assets represents the total return of a real asset portfolio (comprising one-third Commodity Stocks, one-third REITs, and one-third Commodity Futures fully collateralized by 10-year TIPS). Source: DJ-UBS, Federal Reserve, Global Financial Data, Ken French Data Library, London Times, MJK Associates, NAREIT, New York Times, Wall Street Journal and AllianceBernstein Protect from Inflation Rise Benefit from Inflation Rise Hurt by Inflation Rise 1.0 0.8 2.0 -1.4 -2.4 -3.1 6.5 8.6 20 Yr UST S&P 500 REITs 10 Yr TIPS Commodity Stocks Commodity Futures Precious Metals Futures
  • 7. Reliability: Higher Sensitivity Related to Lower Reliability Percent of Rising Inflation Years with Positive Return 1965–2009 Historical analysis is not a guarantee of future results. Individuals cannot invest directly in an index. Total return beta to one-year inflation rate change in multivariate regression including lagged inflation rate. 10-year Treasury Inflation-Protected Securities (TIPS) are calculated from synthetic AllianceBernstein real yields estimated from actual inflation and nominal yield curve variables before 1999 and from Federal Reserve real yields thereafter. REITs (Real Estate) are sourced from the Ken French Data Library prior to 1972; they are represented by the NAREIT Equity REIT Index thereafter. Commodity Stocks are sourced from the Ken French Data Library and are weighted by market-capitalization. Commodity Futures and Precious Metals Futures prior to 1990 are on a US consumption–weighted basis and are sourced from AllianceBernstein series prior to 1970 and from the MJK Commodity Futures Database between 1970 and 1990; they are represented by the Dow Jones-UBS Commodity Futures Index (DJ-UBS) thereafter. All futures returns are fully collateralized by T-bills unless otherwise indicated. Real Assets represents the total return of a real asset portfolio (comprising one-third Commodity Stocks, one-third REITs, and one-third Commodity Futures fully collateralized by 10-year TIPS). Source: DJ-UBS, Federal Reserve, Global Financial Data, Ken French Data Library, London Times, MJK Associates, NAREIT, New York Times, Wall Street Journal and AllianceBernstein Coin Toss Perfectly Reliable 50% 49% 84% 76% 76% 54% 10 Yr TIPS REITs Commodity Stocks Commodity Futures Precious Metals Futures
  • 8. Cost: Higher Sensitivity Related to Lower Risk-Adjusted Return Inflation Betas vs. Volatility-Adjusted Returns 1965–2009 Industrial Metal Stocks Lower Risk-Adjusted Return Greater Inflation Sensitivity Historical analysis is not a guarantee of future results. Individuals cannot invest directly in an index. Commodity futures (including grain and precious metal futures) prior to 1990 are on a US consumption–weighted basis and are sourced from the AllianceBernstein series (synthetic AllianceBernstein real yields estimated from actual inflation and nominal yield curve variables) prior to 1970 and from the MJK Commodity Futures Database between 1970 and 1990; they are represented by Dow Jones-UBS Commodity Futures Index (DJ-UBS) thereafter. Commodity-related stocks and futures are sourced from the Ken French Data Library; gold bullion data provided by London Bullion Market Association (LBMA), and REITs by the NAREIT Index. Source: BLS, GFD, Ken French, LBMA, London Times, NAREIT, The New York Times, The Wall Street Journal and AllianceBernstein S&P 500 REITs Ag Stocks Energy Stocks Livestock Futures Industrial Metal Futures Gold Stocks Grain Futures Precious Metal Futures Softs Futures Gold Bullion 0 0.2 0.4 0.6 0.8 -3 -1 1 3 5 7 9 Inflation Beta Return/Volatility
  • 9. Blends: Improved Tradeoff Between Sensitivity and Cost Inflation Betas vs. Volatility-Adjusted Returns 1965–2009 Return/Volatility Maximizing Blends Commodity Futures: 33% Real Estate Stocks: 33% Commodity Stocks: 33% Historical analysis is not a guarantee of future results. *Allocation is representative of the zone in which a static, well-diversified blend of these assets would roughly fall; it does not point to a particular spot on the curve as having exactly such an allocation historically. The blending of real assets does not eliminate the risk of loss in a portfolio. Figures do not sum to 100% due to rounding. Commodity futures prior to 1990 are on a US consumption–weighted basis and are sourced from the AllianceBernstein series prior to 1970 and from the MJK Commodity Futures Database between 1970 and 1990; they are represented by DJ-UBS thereafter. Commodity-related stocks and futures are sourced from the Ken French Data Library. Gold bullion is represented by London FX, and REITs by the NAREIT Index. Source: BLS, GFD, Ken French, London FX, London Times, NAREIT, The New York Times, The Wall Street Journal and AllianceBernstein Blend of Real Assets* Greater Inflation Sensitivity Lower Risk-Adjusted Return 0.0 0.2 0.4 0.6 0.8 1.0 -3 -1 1 3 5 7 9 Inflation Beta Return/Volatility
  • 10. Relative 10-Year Performance Real Asset Blend vs. S&P 500 Blends: Improved Reliability of Inflation Sensitivity Past performance does not guarantee future results. Real Assets = 1/3 rd Commodity Stocks, 1/3 rd Real Estate Stocks, 1/3 rd Commodity Futures collateralized with 5-year AB Synthetic TIPS Series. Individuals cannot invest directly in an index. Source: FRB and GFD Commodity Futures Real Estate Stocks Inflation Blend of Real Assets Commodity Stocks vs. S&P 500 -15 -10 -5 0 5 10 15 10 20 30 40 50 60 70 80 90 00 10 % Annualized
  • 11. AllianceBernstein Real Asset Strategy Strategy <ul><li>Dynamically allocate to a broad range of sectors </li></ul><ul><li>Leverage the global research infrastructure of AllianceBernstein to identify specific companies </li></ul>Investment Universe <ul><li>Global Commodity Related Stocks </li></ul><ul><li>Commodities </li></ul>Objective <ul><li>Seeks to maximize real return over inflation through a diversified portfolio consisting of a variety of asset classes </li></ul><ul><li>Global Real Estate Stocks </li></ul><ul><li>Inflation Protected Securities </li></ul>
  • 12. Risks to Consider <ul><li>Market Risk: The market values of the portfolio’s holdings rise and fall from day to day, so investments may lose value </li></ul><ul><li>Credit Risk: A bond’s credit rating reflects the issuer’s ability to make timely payments of interest or principal—the lower the rating, the higher the risk of default. If the issuer’s financial strength deteriorates, the issuer’s rating may be lowered and the bond’s value may decline </li></ul><ul><li>Interest Rate Risk: As interest rates rise, bond prices fall and vice versa—long-term securities tend to rise and fall more than short-term securities </li></ul><ul><li>Commodity Risk: Commodity-linked investments may experience greater volatility than investments in traditional securities. The value of commodity-linked investments may be affected by financial factors, political developments and natural disasters </li></ul><ul><li>Liquidity Risk: The difficulty of purchasing or selling a security at an advantageous time or price </li></ul><ul><li>Foreign (Non-US) Risk: Non-US securities may be more volatile because of political, regulatory, market and economic uncertainties associated with such securities. Fluctuations in currency exchange risk may negatively affect the value of the investment or reduce returns. These risks are magnified in emerging or developing markets </li></ul><ul><li>Diversification/Focused Portfolio Risk: Portfolios that hold a smaller number of securities may be more volatile than more diversified portfolios, since gains or losses from each security will have a greater impact on the portfolio’s overall value. </li></ul><ul><li>Real Estate Risk: The Fund’s investments in the real estate market have many of the same risks as direct ownership of real estate, including the risk that the value of real estate could decline due to a variety of factors that affect the real estate market generally. Investments in REITs may have additional risks. REITs are dependent on the capability of their managers, may have limited diversification, and could be significantly affected by changes in tax laws. </li></ul><ul><li>Derivatives Risk: Investing in derivative instruments such as options, futures, forwards or swaps can be riskier than traditional investments, and may be more volatile, especially in a down market. </li></ul><ul><li>Leverage Risk: Trying to enhance investment returns by borrowing money or using other leverage tools—magnify both gains and losses, resulting in greater volatility. </li></ul>
  • 13. Best Performer Worst Performer Striving to Profit From Inflation: Being Dynamic is Critical Past performance does not guarantee future results. Individuals cannot invest directly in an index. These returns are for illustrative purposes only and do not reflect the performance of any fund. Diversification does not eliminate the risk of loss. An investor cannot invest directly in an index or average and they do not include sales charges or operating expenses associated with an investment in a mutual fund, which would reduce total returns. Note: Performance reflects annualized total returns during ensuing two years following National Bureau of Economic Research (NBER) recession end month. Recession ending 7/1980 omitted due to less than two years of recovery before next recession. Early 1970s: 11/30/1970–11/30/1972, Mid-1970’s: 3/31/1975–3/31/1977, Early 1980s: 11/30/1982–11/30/1984, Early 1990s: 3/31/1991–3/31/1993, Early 2000s: 11/30/2001–11/30/2003. S&P 500 reflects S&P 500 Index total return. Commodity Stocks are sourced from the Ken French Data Library. Real Estate Stocks (REITS) are sourced from the Ken French Data Library prior to 1972; they are represented by the NAREIT Equity REIT Index thereafter. Commodity Futures prior to 1991 are represented by the S&P GSCI Commodity Index; they are represented by the Dow Jones-UBS Commodity Index thereafter. Source: Dow Jones-UBS, Ken French Data Library, NAREIT, NBER, Standard & Poor’s and AllianceBernstein Average Annual Return in Two Years Following Recessions Early 1970s Recovery Mid-1970s Recovery Early 1980s Recovery Early 1990s Recovery Early 2000s Recovery Commodity Futures 26.9% Real Estate Stocks (REITs) 25.6% Real Estate Stocks (REITs) 26.1% Real Estate Stocks (REITs) 24.1% Commodity Futures 19.4% Real Estate Stocks (REITs) 21.4% Commodity Stocks 21.8% Commodity Stocks 20.3% S&P 500 13.1% Real Estate Stocks (REITs) 18.7% S&P 500 19.2% S&P 500 13.2% S&P 500 13.7% Commodity Stocks 8.8% Commodity Stocks 4.6% Commodity Stocks 14.0% Commodity Futures -4.2% Commodity Futures 8.9% Commodity Futures 1.8% S&P 500 -2.0%
  • 14. Commodity Futures* Inflation-Linked Bonds Precious Metals Global Real Estate Stocks Global Commodity Stocks Risk Management** Tactical Shifts Real Asset Strategy: Current Strategy & Positioning Current Portfolio Themes as of December 31, 2010 <ul><li>Commodity Stocks—Underweight </li></ul><ul><li>Commodity Futures—Overweight </li></ul><ul><li>Real Estate Stocks—Neutral </li></ul><ul><li>Precious Metals—Underweight </li></ul>Allocations are subject to change. *Consists primarily of commodity futures and swaps on commodity futures indices **Consists primarily of adjustments to foreign exchange exposure and inflation-linked bond duration
  • 15. Top-Down Opportunity: Commodity Futures vs. Stocks Country Commodity Region Commodities Impacted Potential Bottlenecks Farmland Environmental Issues, Skilled Labor Wheat, Corn, Soy, Cotton Midwest US Alberta Canada Oil Data is subject to change. As of December 31, 2010 Source: AllianceBernstein Iron Ore, Coal, Lead, Nickel, Zinc, Natural Gas Skilled Labor Western Australia
  • 16. Average Gold Price Allocations are subject to change. Through December 31, 2010. Mine Production Cash Cost represented by C1 Cash Cost (in 2008 USD) from Brook Hunt 2010 Gold Mines League tables. Average cost mine in 2010 was Briggs mine in the US at $400/oz and highest cost mine was President Steyn mine in South Africa at $823/oz. Source: Bloomberg, Brook Hunt and AllianceBernstein Mine Costs Top-Down Opportunity: Precious Metals Gold Price & Mine Production Costs 2010 <ul><li>Average gold price in 2010 was significantly above the cash cost of producing an ounce of gold at both the average-cost mine and the world’s highest-cost mine </li></ul><ul><li>This gap between price and production costs suggests current gold prices are unsustainable </li></ul>$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 0 500 1,000 1,500 2,000 Cumulative Production (tons) $/oz
  • 17. Portfolio Positioning: Global Real Estate Stocks Real Estate Sector Allocations December 31, 2010 Allocations are subject to change. Source: AllianceBernstein <ul><li>Overweight Lodging vs. Office Space </li></ul><ul><li>Inflation sensitivity captured as Lodging (i.e., Hotels) can adjust their prices more quickly </li></ul>Retail Office -5.1% -2.6% 0.5% 1.1% 6.4% Apartment Industrial Lodging
  • 18. Gross Net 7.68% 1.05% AB Real Asset Strategy Fund Class A: Performance Summary *Inception date: March 8, 2010 The performance information shown represents past performance and does not guarantee future results. The investment return and principal value of an investment in the Funds will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.alliancebernstein.com/investors/us. Fund returns are annualized for periods longer than one year. Returns for other share classes will vary due to different charges and expenses. Performance assumes reinvestment of distributions and does not account for taxes. Please keep in mind that high, double-digit returns are highly unusual and cannot be sustained. Investors should also be aware that these returns were primarily achieved during favorable market conditions. This Fund is relatively new and the performance reflected may not be illustrative of long-term performance. A fund’s performance, especially for very short time periods, should not be the sole factor in making your investment decision. **As of March 1, 2011 Reflects the Adviser’s contractual waiver of a portion of its advisory fee and/or reimbursement of a portion of the Fund’s operating expenses. This waiver extends through the Fund’s current fiscal year and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. Source: MSCI and AllianceBernstein Expense Ratios** 3.08% 22.32% 20.03% 25.40% Period Ended March 31, 2011 YTD Since Inception* Real Asset Strategy (without sales charge) 5.70% One Year 24.43% Real Asset Strategy (with max 4.25% sales charge) 1.24% 19.49% MSCI All Country Commodity Producers Index 8.04% 22.03% Relative Performance -2.34% 2.40%
  • 19. Summary <ul><li>Global inflation is here today creating risks and opportunities for investors </li></ul><ul><li>There is no single asset that best protects against the risks and captures the opportunities posed by inflation. Intelligent blends have the potential to provide a better optimization of the tradeoffs between inflation sensitivity, reliability and cost </li></ul><ul><li>The appropriate amount and type of exposure to inflation-sensitive portfolios varies with investor income, liabilities and risk tolerance </li></ul>
  • 20. Appendix
  • 21. Experienced Management and Research Portfolio management subject to change. As of December 31, 2010 Management Team with an Average 19 Years of Industry Experience and 12 Years with AllianceBernstein Supported by more than 249 research analysts with an average of 13 years of industry experience Jon Ruff Inflation Strategies Vince Childers Inflation Strategies Drew Demakis Commodity Futures Josh Lisser Commodity Stocks Teresa Marziano Real Estate Stocks Greg Wilensky & Dan Loughney Index-Linked Bonds Expertise Portfolio Manager
  • 22. Portfolio Allocation: Traditional or Core-Satellite Portfolio Allocation Approaches 10% Real Assets in Equity Allocation 5%–10% Real Assets in Alternatives Allocation Stocks Bonds Diversified Stocks Real Assets Other Diversified Stocks Real Assets Bonds Stocks Bonds Bonds Alternatives, e.g., real estate, credit, hedge funds
  • 23. Disclosure Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.alliancebernstein.com or contact your AllianceBernstein Investments representative. Please read the prospectus and/or summary prospectus carefully before investing. AllianceBernstein® and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P. AllianceBernstein Investments, Inc. (ABI) is the distributor of the AllianceBernstein family of mutual funds.  ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the manager of the funds. 11-0840 © 2011 AllianceBernstein L.P.

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