Transcript Document

ACMBernstein –
Japan Strategic Value Portfolio
19 September 2007
Nicholas Davidson
Senior Portfolio Manager
Bernstein Value Equities
The sale of shares in AllianceBernstein funds may be restricted in certain jurisdictions. In particular, no shares may be acquired by persons in the UK except in
certain circumstances and shares may not be offered or sold, directly or indirectly, in the United States or to US Persons, as described in the Fund’s prospectus.
Further details may be obtained from the Distributor. A portfolio of ACMBernstein, a mutual investment fund (fonds commun de placement) organized under the
laws of Luxembourg, which conducts business outside of Germany, Austria and Switzerland under the name AllianceBernstein.
There is no guarantee that any forecasts or opinions in this material will be realized. Information should not be construed as investment advice.
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Agenda
 Investment team
 Philosophy and process
 Portfolio positioning
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As of June 30, 2007
*$293 billion total assets under management; excludes approximately $65 billion value equity assets managed in style blend and other mandates.
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Bernstein - Japan Strategic Value Composite
Bernstein Japan Strategic Value
Number of Holdings
approx. 40
Premium Target
3%
Expected Tracking Error
7%
Inception Date
31 March 2002
Investment Approach
 Premium driven by stock selection
 Value investment philosophy
 Intensive fundamental research identifies companies with catalysts for improvement
Portfolio characteristics are subject to change.
As of 30 June 2007
Source: AllianceBernstein
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Bernstein Value Equities: Our Competitive Advantage
Annualized Performance Premiums
 Clear investment philosophy
Product
 Global investment research
 Disciplined investment process driven by
stock selection
 Experienced and stable investment teams
Inception
Date
Since
Inception*–
Jun 2007
US Strategic Value
Dec 73
+3.1%
US Diversified Value
Jun 86
+1.5
International Value—Developed
Jun 92
+3.1
Global Value
Sep 95
+4.6
Emerging Markets Value
Dec 95
+4.7
European Value
Jun 97
+3.4
Canadian Value
Dec 97
+5.1
Global Diversified Value
Mar 98
+3.5
UK Value Plus
Jun 00
+4.6
International Diversified Value
Sep 00
+5.9
International Strategic Value
Mar 01
+8.9
Global Strategic Value
Apr 01
+9.9
Japan Strategic Value
Mar 02
+9.0
Australian Value
Jun 03
+3.0
*US Strategic Value vs. S&P 500; US Diversified Value (S&P 500 optimization) vs. S&P 500; International Value—Developed (GDP-weighted, half hedged) vs. MSCI EAFE; Global Value vs. MSCI
World (Bernstein's Global Value record starts in 1995 as “Developed,” and from the end of September 2002, it includes both those accounts with emerging markets and those without); Emerging
Markets Value vs. MSCI EM; European Value vs. MSCI Europe (performance premium based in euros); Canadian Value vs. S&P/TSX (performance premium based in Canadian dollars); Global
Diversified Value vs. MSCI World; UK Value Plus vs. FTSE All-Share (performance premium based in sterling); International Diversified Value vs. MSCI EAFE; International Strategic Value vs. MSCI
EAFE; Global Strategic Value vs. MSCI World; Japan Strategic Value vs. TOPIX (performance premium based in Japanese yen); Australian Value vs. S&P ASX 300 (performance premium based in
Australian dollars). Past performance is no guarantee of future results. The returns presented above are gross of fees. The results do not reflect the deduction of investment-management fees; the
client's return will be reduced by the management fees and any other expenses incurred in the management of its account. For example, a US$100 million account, paying a 0.50% annual fee, with
a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees are described in Part II of AllianceBernstein’s Form ADV.
Source: FTSE, MSCI, S&P, TOPIX and Bernstein; see Performance Disclosures.
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Bernstein Value Equities
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Bernstein Value Equities
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As of June 30, 2007
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As of August 1, 2007
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Our Philosophy
Long-Term
Earnings Power
Investment
Controversy
Profits &
Stock Price
Decline
Which?
Research
Conclusion
 Based on enduring patterns of human behavior...
Loss aversion
Overreaction to short-term events
 …and economic behavior
Mean reversion of returns
Cash flow ultimately determines value
Investment policies apply under normal market conditions.
As of 30 June 2007
Source: AllianceBernstein
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Investment Process Overview
Explicit Marriage of Fundamental and Quantitative Research
Fundamental
Research
Quantitative
Research
Investment Universe
Identify Value Opportunities
Select Best Ideas
Build
Portfolio
Investment policies apply under normal market conditions.
As of 30 June 2007
Source: AllianceBernstein
For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
Bernstein Value Equities
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For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
Bernstein Value Equities
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For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
Bernstein Value Equities
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For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
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For financial representative use only. Not for inspection by, distribution or quotation to, the general public.
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ACMBernstein–Japan Strategic Value Portfolio: Performance Summary
In Japanese Yen, A-Shares
Periods Ended 30 June 2007
Jan-June
2007
One
Year
Since
Inception
13.5%
ACMBernstein–Japan
Strategic Value Portfolio
9.0
18.0%
TOPIX Index
6.3
13.1
Relative Performance
MSCI Japan Index
Relative Performance
+2.7
6.6
+2.4
8.9
+4.9%
+4.6%
15.8
12.0
+2.2%
+1.5%
Past performance does not guarantee future results.
Inception date: AllianceBernstein–Japan Strategic Value Portfolio—15 December 2005
Periods of more than one year are annualized
Source: MSCI, TSE and AllianceBernstein; see Performance Disclosure.
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Bernstein Japan Strategic Value: Composite Performance Summary
In Japanese Yen
Periods Ended June 30, 2007
Jan–Jun
2007
Japan Strategic Value
TOPIX
Relative Performance
MSCI Japan
Relative Performance
10.0%
6.3
+3.8%
6.6
+3.5%
One
Year
Three
Years
Five
Years
Since
Inception
20.8%
24.6%
21.7%
20.5%
13.1
15.6
12.9
11.5
+7.7%
+9.0%
+8.9%
+9.0%
15.8
17.5
13.0
11.6
+5.0%
+7.0%
+8.7%
+8.9%
Inception date: Japan Strategic Value—March 31, 2002
Based on composite account. Individual accounts will vary.
Periods of more than one year are annualized. Numbers may not sum due to rounding. Past performance is no guarantee of future results. The returns presented above are gross of fees. The
results do not reflect the deduction of investment-management fees; the client’s return will be reduced by the management fees and any other expenses incurred in the management of its account.
For example, a ¥100 million account, paying a 0.50% annual fee, with a given rate of 10% compounded over a 10-year period would result in a net-of-fee return of 9.5%. Investment advisory fees
are described in Part II of AllianceBernstein's Form ADV.
Source: MSCI, Tokyo Stock Exchange and Bernstein; see Performance Disclosure.
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Top 10 Active Weights
Versus TOPIX
Company Name
Sector
Active Weight
Nissan
Capital Equipment
4.3%
Mitsubishi UFJ Financial
Finance
4.1
Sumitomo Mitsui Financial
Finance
3.8
Nippon Mining Holdings
Energy
3.7
Mitsubishi Corporation
Finance
2.8
Honda
Capital Equipment
2.6
Dainippon Ink & Chemicals
Industrial Commodities
2.5
JFE Holdings
Industrial Commodities
2.5
Leopalace21
Construction & Housing
2.5
Tokyo Electric Power
Utilities
2.3
As of 30 June 2007; Holdings will vary over time.
Source: TSE and AllianceBernstein; see Disclosure on Stock Examples.
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Sector Weights
Versus TOPIX
Sector
Active Weight
Energy
3.7%
Industrial Commodities
3.4
Capital Equipment
2.6
Finance
2.3
Utilities
0.8
Telecommunications
0.3
Transportation
0.2
Technology
0
Consumer Staples
-1.5
Medical
-2
Construction & Housing
-2.8
Consumer Cyclicals
-6.3
As of 30 June 2007; Sector weightings will vary over time
Source: TSE and AllianceBernstein; see Disclosure on Stock Examples.
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Portfolio Characteristics
Versus TOPIX
Price/Earnings
Return on Equity*
2007E
19.2×
13.3%
15.9×
10.8%
ACMBernstein–Japan
Strategic Value Portfolio
TOPIX Index
ACMBernstein–Japan
Strategic Value Portfolio
TOPIX Index
Current analysis and estimates do not guarantee future results.
As of 30 June 2007
*Next 12 months
Source: TSE and AllianceBernstein
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Appendix
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Fujitsu: Well Positioned for Japan Inc’s IT Services Spending Growth
IT Services: Sales Growth
20
Nomura Research
Institute
20
Percent
 Fujitsu has suffered from a slow pickup in IT
services spending by its clientele compared with
the market, and from losses in system LSI
Percent
30
System LSI: Operating Margin
Hitachi (Services)
10
0
0
(20)
NTT Data
Fujitsu (Services)
(10)
00
02
(40)
04
06
00
02
04
06
30
25
20
15
10
5
0
(5)
IT Service Growth,
Average (Left Scale)
GDP Growth Rate, Real
（Right Scale)
6
4
2
0
Percent
 With the economy steadily expanding and a labor
shortage looming, IT spending growth is bound to
broaden to laggard sectors like retail, regional
banks and telecoms, which are Fujitsu’s client base
Percent
Japan IT Services vs. GDP Growth
(2)
90
92
94
96
98
00
02
04
06
Fujitsu: Price to Midcycle Earnings
 Our research also shows Fujitsu is likely to restrain
future spending on system LSI. From a long-term
perspective, Fujitsu is attractively priced
25×
17×
Fujitsu
Japanese Technology
Current analysis does not guarantee future results.
As of June 2007
Source: Company reports and AllianceBernstein; see Disclosure on Stock Examples.
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Nissan: New Models to Revive Confidence in Recovery
Nissan: Latest Medium-term Plan
 Nissan came under pressure after pushing back its
medium-term sales target as its commitment to
ambitious plans, such as the 1999 “Revival Plan,”
had been central to investor confidence
 Operating Margin：
Top End of Industry in FY07
 Return on Invested Capital： 20% in FY07
 Global Sales：
Delayed by
One Year
4.2 Mil. Vehicles in FY08
Number of New Models: US and Global Markets
9
 While a dry spell in new model rollouts in 2005–
2006 undermined sales volume and prices,
particularly in the all-important US market, new
products are now arriving and are well-received
6
5
2
1
3
2
5
Total
3
US
1H:FY05* 2H:FY05 1H:FY06 2H:FY06 1H:FY07 2H:FY07E
Valuations: Nissan vs. Japanese Peers**
PFE***
 Nissan is valued at a significant discount. P/E and
P/B are well below peer average, even though
ROE is above average
Current analysis and estimates do not guarantee future results.
As of June 2007
*1H: April through September; 2H: October through March
**Includes Daihatsu, Fuji Heavy, Hino, Honda, Mazda, Mitsubishi, Nissan, Suzuki and Toyota
***Consensus FY2007 PFE
Source: I/B/E/S, company reports and AllianceBernstein; see Disclosure on Stock Examples.
19×
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2.0×
1.5×
12×
Nissan
P/B
Peer
Group
Nissan
Nissan
ROE
13 %
Peer GroupNissan
Peer
Group
Bernstein Value Equities
11%
Peer
Group
22
Alps Electric: Set to Overcome Hard Disk Controversy
Revenue Breakdown: FY2006
Logistics and Others 7%
 Alps shares have fallen on uncertainty over a
planned sale of its hard-disk-drive head business
to its rival, TDK. But magnetic devices account for
only 7% of the firm’s revenue
Components 13%
Magnetic Devices 7%
Comm. Devices 8%
Audiovisual Equipment
37%
Peripheral Products 14%
Automotive Products 14%
Operating Profit Margin: By Division
20
 The core components business remains profitable,
while other previously troubled divisions are
showing signs of recovery
Percent
Components
10
Automotive Products
0
Comm. Devices
(10)
Peripheral Products
1Q:04
4Q:04
3Q:05
2Q:06
Alps Electric: Valuations
 As a result of stock price decline, valuations have
become compelling
Price to Midcycle
Earnings
Price to Book
25×
12×
Alps
3.0×
1.1×
Industry Average
Alps
Industry Average
Current analysis does not guarantee future results.
As of June 2007
Source: Company reports and AllianceBernstein; see Disclosure on Stock Examples.
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Performance Disclosure
Past performance does not guarantee future results. Total returns
in this presentation, provided by AllianceBernstein, reflect the change
in net asset value and assume reinvestment of any distributions paid
on fund shares for the period shown, but do not reflect sales charges.
Accordingly, these figures do not represent actual returns to an
investor. The investment return and principal value of an investment in
the Fund will fluctuate as the prices of the individual securities in which
it invests fluctuate, so that fund shares, when redeemed, may be worth
more or less than their original cost.
You may obtain updated performance information by visiting
www.alliancebernstein.com/investments (click on International)
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Important Fund Disclosure
The sale of shares in AllianceBernstein funds (offshore ACMBernstein and ACMBernstein SICAV
funds) may be restricted in certain jurisdictions. In particular, no shares may be acquired by
persons in the UK except in certain circumstances and shares may not be offered or sold,
directly or indirectly, in the United States or to US Persons, as described in the Portfolios’
prospectus. Further details may be obtained from the Distributor.
ACMBernstein–Japan Strategic Value Portfolio
Investment Risks. Investment in the Fund entails certain risks. 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, interest rate risk, currency fluctuation risk, illiquid assets risk,
focused portfolio risk, portfolio turnover risk, management risk, lack of operating history risk,
derivatives risk, borrowing risk, taxation risk and equity securities risk. These and other risks are
described in the Fund’s prospectus. Prospective investors should read the prospectus carefully
and discuss risk and the fund’s fees and charges with their financial adviser to determine if
investment is appropriate for them.
AllianceBernstein (Luxembourg) S.A. is the management company of the AllianceBernstein – Japan Strategic Value Portfolio and has appointed
AllianceBernstein (Singapore) Ltd. (Company Registration No. 199703364C) as its agent for service of process and as its Singapore representative.
This material was originally prepared in the English language and provided only upon request to certain authorized financial representatives. AllianceBernstein, its affiliates and
third-parties, make no representation or warranty relating to the quality or accuracy of any foreign language translation of this material.
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Disclosure on Stock Examples
References to specific securities are presented to illustrate the application of
our investment philosophy only and are not to be considered recommendations
by AllianceBernstein. The specific securities identified and described in this
presentation do not represent all of the securities purchased, sold or
recommended for the portfolio, and it should not be assumed that investments
in the securities identified were or will be profitable. Upon request, we will
furnish a listing of all investments made during the prior one-year period.
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