N-CSR

NOV^11.30.23

LOGO

ANNUAL REPORT

AB TAX-AWARE SHORT DURATION MUNICIPAL ETF

(NYSE: TAFI)

LOGO

AllianceBernstein L.P. would like to thank you for your interest in the Fund.



Investment Products Offered		• Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AB’s website at www.abfunds.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AB at (800) 227 4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov. AB publishes full portfolio holdings for the Fund daily at www.abfunds.com.

Foreside Fund Services, LLC (“Foreside”) is the distributor of the fund. Foreside is a member of FINRA.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein^® is a registered service mark used by permission of the owner, AllianceBernstein L.P.


FROM THE PRESIDENT

Dear Shareholder,

We’re pleased to provide this report for the AB Tax-Aware Short Duration Municipal ETF (the “Fund”). Please review the discussion of ETF performance, the market conditions during the reporting period and the ETF’s investment strategy.

At AB, we’re striving to help our clients achieve better outcomes by:

⁺

Fostering diverse perspectives that give us a distinctive approach to navigating global capital markets

⁺

Applying differentiated investment insights through a connected global research network

⁺

Embracing innovation to design better ways to invest and leading-edge solutions

Whether you’re an individual investor or a multibillion-dollar institution, we’re putting our knowledge and experience to work for you every day.

For more information about AB’s comprehensive range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in AB exchange-traded funds—and for placing your trust in our firm.

Sincerely,

LOGO

Onur Erzan

President and Chief Executive Officer, AB ETFs



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ANNUAL REPORT

January 24, 2023

This report provides management’s discussion of fund performance for the AB Tax-Aware Short Duration Municipal ETF for the annual reporting period ended November 30, 2023.

The Fund seeks to provide relative stability of principal and a moderate rate of after-tax return and income.

NAV RETURNS AS OF NOVEMBER 30, 2023 (unaudited)



	6 Months		12 Months

AB Tax-Aware Short Duration Municipal ETF		1.94%		3.41%

Bloomberg 1-5 Year Municipal Bond Index		2.20%		2.76%

INVESTMENT RESULTS

The preceding table shows the Fund’s performance compared with its primary benchmark, Bloomberg 1-5 Year Municipal Bond Index, for the six- and 12-month periods ended November 30, 2023.

During the 12-month period, the Fund outperformed the benchmark. Industry selection and security selection, particularly allocations to corporate financials, toll roads and airports, contributed to performance, relative to the benchmark. Yield-curve positioning detracted from performance.

During the six-month period, the Fund underperformed the benchmark. Industry selection, particularly allocations to asset-backed securities, as well as security selection, predominantly allocations within local general obligation and water and sewer sectors, detracted from performance. Out-of-benchmark allocations to corporate financials as well as security selection within airports contributed. Yield-curve performance attribution was roughly neutral throughout the period.

The Fund used derivatives in the form of interest rate swaps for hedging purposes, which had no material impact during the six-month period and added during the 12-month period.

MARKET REVIEW AND INVESTMENT STRATEGY

For the 12-month period ending November 30, 2023, the yield on a 10-Year AAA municipal bond rose modestly to 2.63% from 2.61% and the yield on the 10-Year US Treasury rose to 4.34% from 3.51%. After-tax spreads widened on the short end of the curve, while compressing longer out on the curve, indicating municipals became cheaper relative to Treasuries on the short end, while becoming more expensive on the intermediate and long end. The year was full of surprises, with some of the



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events being forecasted at the beginning of the year such as an economic recession, followed by US Federal Reserve (“the Fed”) cuts, which did not come to fruition. The market performed well in the first half of the year, continuing the year-end rally from 2022. However, a difficult third quarter, in which robust economic indicators, particularly a strong jobs print in September, led to concerns of the Fed elongating their tightening cycle. This roiled markets, giving back all the gains earned up to that point in the year. However, the market strongly rebounded with impressive November rally, which was the highest monthly performance for the municipal market since the early 1980s.

The Fund’s Senior Investment Management Team (the “Team”) continues to focus on real after-tax return by investing in municipal bonds that generate income exempt from federal income taxes. In seeking to manage volatility and interest-rate risk, the Team focuses on short to intermediate-term bonds and seeks to provide inflation protection by entering inflation swap agreements or investing in other inflation-protected instruments when appropriate.

INVESTMENT POLICIES

The Fund pursues its objective by investing principally in a national portfolio of both municipal and taxable fixed-income securities. The Fund invests, under normal circumstances, at least 80% of its total assets in municipal securities that pay interest that is exempt from federal income tax. These securities may pay interest that is subject to the federal alternative minimum tax for certain taxpayers. The income earned and distributed to shareholders on non-municipal securities would not be exempt from federal income tax. The Fund may invest in fixed-income securities rated below investment grade (commonly known as “junk bonds”), although such securities are not expected to be the Fund’s primary focus. The Fund may invest in securities issued or guaranteed by Puerto Rico or its agencies or instrumentalities.

The Adviser selects securities for the Fund based on a variety of factors, including credit quality, maturity, diversification benefits, and the relative expected after-tax returns of taxable and municipal securities (considering federal tax rates and without regard to state and local income taxes). Consistent with the Fund’s objective to provide a moderate rate of after-tax return, an investor in the Fund may incur a tax liability that will generally be greater than the same investor would have in a fund investing exclusively in municipal securities, and that will be higher if the investor is in a higher tax bracket. In addition, the tax implications of the Fund’s trading activity, such as realizing taxable gains, are considered in making purchase and sale decisions for the Fund. Consistent with the Fund’s investment objective, the Fund could

(continued on next page)



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continue to hold a security even if the interest on that security changes from being tax-exempt to taxable. Under normal circumstances, the Fund will maintain a dollar-weighted average duration of less than three years, although it may invest in securities of any duration or maturity.

The Fund may also invest in forward commitments, and variable and floating-rate municipal securities.

The Fund may use derivatives, primarily swaps, but also options, futures contracts and forwards, to achieve its investment strategies. For example, the Fund may enter into interest rate swaps relating to municipal and taxable fixed-income securities or credit default swaps relating to securities indices. Derivatives may provide more efficient and economical exposure to fixed-income securities markets than direct investments.

The Fund may invest more than 25% of its total assets in securities or obligations that are related in such a way that business or political developments or changes affecting one such security could also affect the others (for example, securities with interest that is paid from projects of a similar type).



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DISCLOSURES AND RISKS

Benchmark Disclosure

The Bloomberg 1-Year Municipal Bond Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Bloomberg 1-Year Municipal Bond Index is a total-return performance benchmark for the short-term municipal bond market with maturities of up to 1.99 years. An investor cannot invest directly in an index or average, and their results are not indicative of the performance for any specific investment, including the Fund.

A Word About Risk

Market Risk: The value of the Fund’s assets will fluctuate as the bond market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events, including public health crises (including the occurrence of a contagious disease or illness), interest rate levels and regional and global conflicts, that affect large portions of the market.

Credit Risk: An issuer or guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default, causing a loss of the full principal amount of a security and accrued interest. The degree of risk for a particular security may be reflected in its credit rating. There is the possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security.

Below Investment Grade Securities Risk: Investments in fixed-income securities with lower ratings (commonly known as “junk bonds”) are subject to a higher probability that an issuer will default or fail to meet its payment obligations. These securities may be subject to greater price volatility due to such factors as specific municipal or corporate developments and negative performance of the junk bond market generally and may be more difficult to trade than other types of securities.

Municipal Market Risk: This is the risk that special factors may adversely affect the value of municipal securities and have a significant effect on the yield or value of the Fund’s investments in municipal securities. These factors include economic conditions, political or legislative changes, public health crises, uncertainties related to the tax status of municipal securities, and the rights of investors in these securities. To the extent that the Fund invests more of its assets in a particular state’s municipal securities, the Fund may be vulnerable to events adversely affecting that state, including economic, political and regulatory occurrences, court decisions, terrorism, public health crises (including the occurrence of a contagious disease or illness) and catastrophic natural disasters, such as hurricanes, fires or



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DISCLOSURES AND RISKS (continued)

earthquakes. For example, the novel coronavirus (COVID-19) pandemic has significantly stressed the financial resources of many issuers of municipal securities, which could impair any such issuer’s ability to meet its financial obligations when due and adversely impact the value of its securities held by the Fund. As the full effects of the COVID-19 pandemic on state and local economies and on issuers of municipal securities are still uncertain, the financial difficulties of issuers of municipal securities may worsen, adversely affecting the performance of the Fund. The Fund’s investments in certain municipal securities with principal and interest payments that are made from the revenues of a specific project or facility, and not general tax revenues, may have increased risks. Factors affecting the project or facility, such as local business or economic conditions, could have a significant effect on the project’s ability to make payments of principal and interest on these securities.

In addition, changes in tax rates or the treatment of income from certain types of municipal securities, among other things, could negatively affect the municipal securities markets.

The Fund invests, from time to time, in the municipal securities of Puerto Rico and other U.S. territories and their governmental agencies and municipalities, which are exempt from federal, state, and, where applicable, local income taxes. These municipal securities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a very challenging economic and fiscal environment, worsened by the spread of COVID-19 and the adverse effect that related governmental and public responses have had on Puerto Rico’s economy. If the general economic situation in Puerto Rico continues to persist or worsens, the volatility and credit quality of Puerto Rican municipal securities could continue to be adversely affected, and the market for such securities may deteriorate further.

Tax Risk: From time to time, the U.S. Government and the U.S. Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Fund by increasing taxes on that income. In such event, the Fund’s net asset value (“NAV”) could also decline as yields on municipal bonds, which are typically lower than those on taxable bonds, would be expected to increase to approximately the yield of comparable taxable bonds. Actions or anticipated actions affecting the tax-exempt status of municipal bonds could also result in significant shareholder redemptions of Fund shares as investors anticipate adverse effects on the Fund or seek higher yields to offset the potential loss of the tax deduction. As a result, the Fund would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Fund’s yield.



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DISCLOSURES AND RISKS (continued)

Interest-Rate Risk: Changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. Interest-rate risk is generally greater for fixed-income securities with longer maturities or durations. The Fund may be subject to a greater risk of rising interest rates than would normally be the case due to the recent end of a period of historically low rates and the effects of potential central bank monetary policy, and government fiscal policy, initiatives and resulting market reactions to those initiatives.

Duration Risk: Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise. For example, a fixed-income security with a duration of three years will likely decrease in value by approximately 3% if interest rates increase by 1%.

Inflation Risk: This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Fund’s assets can decline as can the value of the Fund’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.

Illiquid Investments Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Municipal securities may have more illiquid investments risk than other fixed-income securities because they trade less frequently and the market for municipal securities is generally smaller than many other markets.

Leverage Risk: To the extent the Fund uses leveraging techniques, such as derivatives, its NAV may be more volatile because leverage tends to exaggerate the effect of changes in interest rates and any increase or decrease in the value of the Fund’s investments.

Derivatives Risk: Derivatives may be difficult to price or unwind and may be leveraged so that small changes may produce disproportionate losses for the Fund. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, which could cause the Fund to suffer a potentially unlimited loss. Derivatives, especially over-the-counter derivatives, are also subject to counterparty risk, which is the risk that the counterparty (the party on the other side of



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DISCLOSURES AND RISKS (continued)

the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Fund.

Variable and Floating-Rate Securities Risk: Variable and floating-rate securities pay interest at rates that are adjusted periodically, according to a specific formula. Because the interest rate is reset only periodically, changes in the interest rate on these securities may lag behind changes in the prevailing market interest rates. The value of the security may rise or fall depending on changes in interest rates between periodic resets.

When-Issued and Forward Commitment Risks: These securities are purchased before the securities are actually issued or delivered. These securities are subject to the risk that, when delivered, they will be worth less than the agreed-upon purchase price.

ETF Share Price and Net Asset Value Risk: The Fund’s shares are listed for trading on the NYSE Arca, Inc. (the “Exchange”). Shares are bought and sold in the secondary market at market prices. The NAV per share of the Fund will fluctuate with changes in the market value of the Fund’s holdings. The Fund’s NAV is calculated once per day, at the end of the day. The market price of a share on the Exchange could be higher than the NAV (premium), or lower than the NAV (discount) and may fluctuate during the trading day. When all or a portion of the Fund’s underlying securities trade in a market that is closed when the market for the Fund’s shares is open, there may be differences between the current value of a security and the last quoted price for that security in the closed local market, which could lead to a deviation between the market value of the Fund’s shares and the Fund’s NAV. Disruptions in the creations and redemptions process or the existence of extreme market volatility could result in the Fund’s shares trading above or below NAV. As the Fund may invest in securities traded on foreign exchanges, Fund shares may trade at a larger premium or discount to the Fund’s NAV than shares of other ETFs. In addition, in stressed market conditions, the market for Fund shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings.

Authorized Participant Risk: Only a limited number of financial institutions that enter into an authorized participant relationship with the Fund (“Authorized Participants”) may engage in creation or redemption transactions. If the Fund’s Authorized Participants decide not to create or redeem shares, Fund shares may trade at a larger premium or discount to the Fund’s NAV, or the Fund could face trading halts or de-listing.

Active Trading Market Risk: There is no guarantee that an active trading market for Fund shares will exist at all times. In times of market stress, markets can suffer erratic or unpredictable trading activity, extraordinary



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DISCLOSURES AND RISKS (continued)

volatility or wide bid/ask spreads, which could cause some market makers and Authorized Participants to reduce their market activity or “step away” from making a market in ETF shares. Market makers and Authorized Participants are not obligated to place or execute purchase and redemption orders. This could cause the Fund’s market price to deviate, materially, from the NAV, and reduce the effectiveness of the ETF arbitrage process. Any absence of an active trading market for Fund shares could lead to a heightened risk that there will be a difference between the market price of a Fund share and the underlying value of the Fund share.

Management Risk: The Fund is subject to management risk because it is an actively managed investment fund. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected.

These risks are fully discussed in the Fund’s prospectus. As with all investments, you may lose money by investing in the Fund.

An Important Note About Historical Performance

The investment return and principal value of an investment in the Fund will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance shown in this report represents past performance and does not guarantee future results. 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.abfunds.com.

All fees and expenses related to the operation of the Fund have been deducted. Performance assumes reinvestment of distributions and does not account for taxes.



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HISTORICAL PERFORMANCE

GROWTH OF A $10,000 INVESTMENT IN THE FUND (unaudited)

11/30/2022 TO 11/30/2023

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Tax-Aware Short Duration Municipal ETF (from 11/30/2022 to 11/30/2023) as compared to the performance of the Fund’s benchmark. The chart assumes the reinvestment of dividends and capital gains distributions.

Information about the Fund’s NAV, market price, and premiums and discounts is available on the Fund’s website at www.abfunds.com.



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HISTORICAL PERFORMANCE (continued)

AVERAGE ANNUAL RETURNS AS OF NOVEMBER 30, 2023 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)

AB Tax-Aware Short Duration Municipal ETF

1 Year		3.41%		3.41%

The Fund’s current prospectus fee table shows the Fund’s total annual operating expense ratio as 0.27% gross of any fee waivers or expense reimbursements. The Fund’s investment advisory agreement provides that the Adviser will pay substantially all expenses of the Fund (including expenses of AB Active ETFs, Inc. relating to the Fund), except for payments under the Fund’s 12b-1 plan (if any), interest expenses, taxes, acquired fund fees and expenses (other than fees and expenses for funds advised by the Adviser and/or its affiliates), and litigation and extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be responsible for its non-operating expenses, including brokerage commissions. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratio shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.



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HISTORICAL PERFORMANCE (continued)

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

DECEMBER 31, 2023 (unaudited)



	SEC Returns (reflects applicable sales charges)

AB Tax-Aware Short Duration Municipal ETF

1 Year		4.21%



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EXPENSE EXAMPLE

(unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including broker commissions on purchases and sales of shares and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


	Beginning Account Value June 1, 2023		Ending Account Value November 30, 2023		Expenses Paid During Period*		Annualized Expense Ratio*
Actual	$	1,000	$	1,019.40	$	1.37		0.27	%
Hypothetical**	$	1,000	$	1,023.71	$	1.37		0.27	%

*	Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). The Fund’s operating expenses are borne by the Adviser or its affiliates.

**	Assumes 5% annual return before expenses.



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PORTFOLIO SUMMARY

November 30, 2023 (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $290.1

LOGO

The Portfolio’s quality rating and state breakdowns are expressed as a percentage of the Portfolio’s total investments in municipal securities and may vary over time. The Portfolio also enters into derivative transactions, which may be used for hedging or investment purposes (see “Portfolio of Investments” section of the report for additional details). The quality ratings are determined by using the S&P Global Ratings (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) and Fitch Ratings, Ltd. (“Fitch”). The Portfolio considers the credit ratings issued by S&P, Moody’s and Fitch and uses the highest rating issued by the agencies. These ratings are a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is the highest (best) and D is the lowest (worst). If applicable, the pre-refunded category includes bonds which are secured by U.S. Government securities and therefore are deemed high-quality investment grade by the Adviser. If applicable, Not Applicable (N/A) includes non-credit worthy investments; such as, equities, currency contracts, futures and options. If applicable, the Not Rated category includes bonds that are not rated by a nationally recognized statistical rating organization. The Adviser evaluates the creditworthiness of non-rated securities based on a number of factors including, but not limited to, cash flows, enterprise value and economic environment.

2	“Other” represents less than 2.0% in 22 different states, District of Columbia, Guam and Puerto Rico.



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PORTFOLIO OF INVESTMENTS

November 30, 2023


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 92.9%
Long-Term Municipal Bonds – 90.4%
Alabama – 3.7%
Black Belt Energy Gas District (Goldman Sachs Group, Inc. (The)) Series 2023-D 5.414% (SOFR + 1.85%), 06/01/2049^(a)	$	1,000	$	1,007,034
Series 2021-B 4.00%, 10/01/2052		1,200		1,187,811
Black Belt Energy Gas District (Royal Bank of Canada) Series 2022-D 4.00%, 12/01/2025		650		652,401
City of Huntsville AL Series 2016-B 5.00%, 05/01/2028		470		490,792
Southeast Energy Authority A Cooperative District (Goldman Sachs Group, Inc. (The)) Series 2022-B 5.00%, 05/01/2053		1,000		1,023,770
Southeast Energy Authority A Cooperative District (Morgan Stanley) Series 2022-A 5.50%, 01/01/2053		2,000		2,118,407
Southeast Energy Authority A Cooperative District (Royal Bank of Canada) Series 2023-B 5.00%, 01/01/2054		1,500		1,564,469
Southeast Energy Authority A Cooperative District (Sumitomo Mitsui Financial Group, Inc.) Series 2023-A 5.25%, 01/01/2054		2,500		2,610,804

				10,655,488

Arizona – 1.4%
Chandler Industrial Development Authority (Intel Corp.) Series 2022 5.00%, 09/01/2042		2,000		2,064,534
City of Phoenix Civic Improvement Corp. Series 2014-A 5.00%, 07/01/2030 (Pre-refunded/ETM)		1,000		1,009,541



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PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Industrial Development Authority of the City of Phoenix Arizona (The) (AZ GFF Tiyan LLC Lease) Series 2014 5.00%, 02/01/2029	$	1,000	$	973,881

				4,047,956

Arkansas – 0.0%
Arkansas Development Finance Authority (Hybar LLC) Series 2023 6.875%, 07/01/2048^(b)		115		118,195


California – 6.2%
California Community Choice Financing Authority (Deutsche Bank AG) Series 2023 5.25%, 01/01/2054		1,000		1,030,428
California Community Choice Financing Authority (Goldman Sachs Group, Inc. (The)) Series 2021 4.00%, 10/01/2052		1,000		993,234
California State Public Works Board (California State Public Works Board Lease) Series 2017-H 5.00%, 04/01/2031		1,425		1,513,936
California Statewide Communities Development Authority (Southern California Edison Co.) Series 2023 4.50%, 11/01/2033^(c)		1,000		1,053,777
City of Los Angeles Department of Airports Series 2022 5.00%, 05/15/2025		475		484,922
Newport Mesa Unified School District NATL Series 2007 Zero Coupon, 08/01/2031		2,000		1,565,181
Oakland Unified School District/Alameda County Series 2016 5.00%, 08/01/2025		1,000		1,031,839
Port of Oakland Series 2021 5.00%, 11/01/2029		1,575		1,706,245



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PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

San Diego County Regional Airport Authority Series 2023 5.00%, 07/01/2029	$	1,610	$	1,734,232
Southern California Public Power Authority Series 2020 5.00%, 07/01/2030 (Pre-refunded/ETM)		1,000		1,001,338
State of California Series 2018 5.00%, 10/01/2024		1,990		2,020,640
Series 2023 5.00%, 10/01/2024		640		649,854
Stockton Public Financing Authority BAM Series 2014 5.00%, 09/01/2028		1,475		1,490,185
Sweetwater Union High School District BAM Series 2014 5.00%, 08/01/2026		1,075		1,086,172
Washington Township Health Care District Series 2020-A 5.00%, 07/01/2031		650		690,104

				18,052,087

Colorado – 1.9%
Adams & Weld Counties School District No. 27J Brighton/CO Series 2016-A 2.50%, 12/01/2027		1,500		1,448,981
Arapahoe County School District No. 5 Cherry Creek AGM Series 2004 2.00%, 12/15/2023		1,225		1,224,557
City & County of Denver Co. Airport System Revenue Series 2013-B 5.00%, 11/15/2043 (Pre-refunded/ETM)		2,000		2,004,574
Series 2020-B 5.00%, 11/15/2031		700		716,247

				5,394,359

Connecticut – 0.9%
State of Connecticut Series 2015-A 4.50%, 03/15/2033		2,500		2,507,232


District of Columbia – 1.4%
District of Columbia (Plenary Infrastructure DC LLC State Lease) Series 2022 5.00%, 02/28/2026		1,485		1,521,027



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 17

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Metropolitan Washington Airports Authority Aviation Revenue Series 2017 5.00%, 10/01/2026	$	465	$	483,788
Series 2020-A 5.00%, 10/01/2032		2,000		2,180,221

				4,185,036

Florida – 6.1%
City of Jacksonville FL (Genesis Health, Inc. Obligated Group) Series 2017 5.00%, 11/01/2026		600		621,303
City of Port St Lucie FL Utility System Revenue Series 2016 4.00%, 09/01/2032		3,560		3,575,007
County of Brevard FL (County of Brevard FL Fuel Tax) AGM Series 2016 5.00%, 08/01/2028		1,445		1,511,381
County of Broward FL Airport System Revenue (Fort Lauderdale Hollywood Intl Airport) Series 2015-A 5.00%, 10/01/2025		930		951,097
County of Broward FL Professional Sports Facilities Tax Revenue Series 2016 5.00%, 09/01/2025		1,265		1,266,724
County of Charlotte FL Series 2015 5.00%, 10/01/2027		1,080		1,111,817
Greater Orlando Aviation Authority Series 2022-A 5.00%, 10/01/2029		1,020		1,105,210
Series 2022-C 5.00%, 10/01/2025		1,350		1,380,624
Hillsborough County Aviation Authority Series 2015 5.00%, 10/01/2040 (Pre-refunded/ETM)		1,000		1,010,578
School Board of Miami-Dade County (The) Series 2014-A 5.00%, 05/01/2031 (Pre-refunded/ETM)		1,435		1,444,330
Series 2023 5.00%, 06/18/2024		1,000		1,008,464



18 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

West Palm Beach Community Redevelopment Agency (West Palm Beach Community Redevelopment Agency City Center Community Redev Area) Series 2015 5.00%, 03/01/2026	$	2,590	$	2,659,477

				17,646,012

Georgia – 3.7%
Augusta Development Authority (WellStar Health System Obligated Group) Series 2018 5.00%, 07/01/2025		200		203,363
City of Atlanta GA Airport Passenger Facility Charge Series 2023 5.00%, 07/01/2030		2,000		2,184,477
City of Atlanta GA Department of Aviation Series 2023-G 5.00%, 07/01/2027		1,000		1,052,921
Main Street Natural Gas, Inc. (Citigroup, Inc.) Series 2019-C 4.00%, 03/01/2050		1,000		992,318
5.00%, 09/01/2024		1,500		1,507,282
Series 2022-B 5.00%, 12/01/2052		2,000		2,055,445
Main Street Natural Gas, Inc. (Royal Bank of Canada) Series 2023 5.264% (SOFR + 1.70%), 12/01/2053^(a)		1,000		1,007,511
Main Street Natural Gas, Inc. (Toronto-Dominion Bank (The)) Series 2019-B 4.00%, 08/01/2049		1,300		1,297,196
Municipal Electric Authority of Georgia Series 2020 5.00%, 01/01/2029		500		537,842

				10,838,355

Guam – 1.0%
Territory of Guam Series 2019 5.00%, 11/15/2031		910		930,808



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 19

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Territory of Guam (Guam Section 30 Income Tax) Series 2016-A 5.00%, 12/01/2026	$	2,000	$	2,064,632

				2,995,440

Illinois – 9.5%
Chicago Board of Education Series 2017-C 5.00%, 12/01/2030		1,000		1,014,312
Series 2019-A 5.00%, 12/01/2030		1,575		1,618,227
AGM Series 2018-C 5.00%, 12/01/2031		1,000		1,039,712
Chicago Transit Authority Series 2017 5.00%, 06/01/2026		1,695		1,754,314
Chicago Transit Authority Capital Grant Receipts Revenue (City of Chicago IL Fed Hwy Grant) Series 2017 5.00%, 06/01/2025		1,000		1,020,163
City of Chicago IL Series 2020-A 5.00%, 01/01/2026		2,125		2,171,297
City of Chicago IL Waterworks Revenue AMBAC Series 2001 5.75%, 11/01/2030		865		934,237
Du Page & Will Counties Community School District No. 24 Indian Prairie Series 2015-A 5.00%, 12/30/2023		1,000		1,001,207
Illinois State Toll Highway Authority Series 2014-D 5.00%, 01/01/2024		5,495		5,502,519
Kane McHenry Cook & De Kalb Counties Unit School District No. 300/IL Series 2015 5.00%, 01/01/2024		1,000		1,001,085
Metropolitan Pier & Exposition Authority Series 2022 3.00%, 06/15/2024		2,250		2,234,567
Series 2023 5.00%, 12/15/2027		1,000		1,062,731
Northern Illinois University BAM Series 2020-B 5.00%, 04/01/2031		725		771,009



20 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Sangamon County School District No. 186 Springfield AGM Series 2020-B 5.00%, 02/01/2032	$	690	$	760,213
State of Illinois Series 2017-D 5.00%, 11/01/2026		1,000		1,042,747
Series 2019-A 5.00%, 11/01/2029		685		743,359
Series 2020 5.50%, 05/01/2030		2,000		2,195,094
Series 2023-D 5.00%, 07/01/2024		1,000		1,007,471
State of Illinois Sales Tax Revenue Series 2021-A 4.00%, 06/15/2028		605		615,373

				27,489,637

Indiana – 1.2%
Indiana Finance Authority (Ohio Valley Electric Corp.) Series 2020 3.00%, 11/01/2030		500		464,735
Indianapolis Local Public Improvement Bond Bank Series 2021-A 5.00%, 06/01/2024		3,045		3,068,213

				3,532,948

Iowa – 0.2%
Iowa Finance Authority (Iowa Health System Obligated Group) Series 2018-B 5.00%, 02/15/2025		500		508,152


Kansas – 0.6%
Overland Park Development Corp. (City of Overland Park KS) Series 2019 5.00%, 03/01/2024		1,605		1,605,978


Kentucky – 0.6%
Western Kentucky University Series 2016-A 5.00%, 09/01/2025		1,660		1,704,110


Louisiana – 1.4%
City of Shreveport LA BAM Series 2016 5.00%, 03/01/2027		1,400		1,461,801



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 21

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Louisiana Local Government Environmental Facilities & Community Development Auth (American BioCarbon CT LLC) Series 2023 4.00%, 12/01/2046	$	1,000	$	1,000,328
Louisiana Local Government Environmental Facilities & Community Development Auth (Louisiana Insurance Guaranty Association) Series 2022 5.00%, 08/15/2029		665		700,650
Louisiana Public Facilities Authority (ElementUS Minerals LLC) Series 2023 5.00%, 10/01/2043^(b)		1,000		1,014,337

				4,177,116

Maryland – 1.6%
Maryland Economic Development Corp. (Purple Line Transit Partners LLC) Series 2022 5.00%, 11/12/2028		1,000		1,019,958
Maryland Stadium Authority (Maryland Stadium Authority State Lease) Series 2023-A 5.00%, 03/01/2025		1,850		1,890,900
State of Maryland Series 2017-A 5.00%, 08/01/2025		1,765		1,827,873

				4,738,731

Massachusetts – 2.1%
City of Quincy MA Series 2023 5.00%, 01/12/2024		1,270		1,272,143
Massachusetts Development Finance Agency (Beth Israel Lahey Health Obligated Group) Series 2015-H 5.00%, 07/01/2025		1,500		1,535,606
Series 2019 5.00%, 07/01/2031		870		937,959
Massachusetts Port Authority Series 2017-A 5.00%, 07/01/2027		1,120		1,177,345
Series 2019-A 5.00%, 07/01/2024		1,070		1,078,501

				6,001,554



22 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Michigan – 0.6%
Great Lakes Water Authority Water Supply System Revenue Series 2018-A 5.00%, 07/01/2024	$	450	$	454,473
Michigan Finance Authority (Great Lakes Water Authority Sewage Disposal System Revenue) AGM Series 2014 5.00%, 07/01/2026		1,190		1,198,981

				1,653,454

Minnesota – 0.8%
State of Minnesota Series 2022-A 5.00%, 08/01/2025		1,000		1,032,824
University of Minnesota Series 2017-B 5.00%, 12/01/2023		1,325		1,325,000

				2,357,824

Missouri – 1.4%
City of St Louis MO Airport Revenue AGM Series 2017-B 5.00%, 07/01/2025		2,130		2,165,490
County of St Louis MO (County of St Louis MO Lease) Series 2020-A 4.00%, 12/01/2030		755		777,482
Missouri Highway & Transportation Commission Series 2023 5.00%, 05/01/2024^(c)		1,000		1,007,304

				3,950,276

Nebraska – 0.9%
Public Power Generation Agency Series 2015 5.00%, 01/01/2025		2,525		2,565,601


Nevada – 1.1%
County of Clark Department of Aviation Series 2021-B 5.00%, 07/01/2025		3,100		3,164,025
State of Nevada Department of Business & Industry (DesertXpress Enterprises LLC) Series 2023 8.125%, 01/01/2050^(b)		100		101,282

				3,265,307



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 23

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

New Jersey – 4.7%
County of Monmouth NJ Series 2019 5.00%, 07/15/2026	$	1,320	$	1,395,074
Garden State Preservation Trust AGM Series 2005-A 5.75%, 11/01/2028		1,000		1,069,315
New Brunswick Parking Authority BAM Series 2016-A 5.00%, 09/01/2030		2,000		2,093,891
New Jersey Economic Development Authority (New Jersey Economic Development Authority State Lease) Series 2015-X 5.00%, 06/15/2025		1,450		1,487,325
New Jersey Economic Development Authority (New Jersey-American Water Co., Inc.) Series 2023 3.75%, 11/01/2034		1,000		992,451
New Jersey Economic Development Authority (United Airlines, Inc.) Series 2012 5.75%, 09/15/2027		2,000		2,000,341
New Jersey Transportation Trust Fund Authority (New Jersey Transportation Trust Fund Authority State Lease) Series 2019 5.00%, 06/15/2030		250		271,783
Newark Board of Education BAM Series 2021 5.00%, 07/15/2029		1,210		1,316,712
State of New Jersey Series 2020 5.00%, 06/01/2024		1,000		1,009,088
Township of South Orange Village NJ Series 2023 5.00%, 06/28/2024		1,000		1,008,174
Township of Woodbridge NJ Series 2023 4.50%, 03/15/2024		1,000		1,003,441

				13,647,595

New York – 7.0%
City of New York NY Series 2014-A 5.00%, 08/01/2024		1,000		1,012,655



24 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Metropolitan Transportation Authority Series 2016-A 5.00%, 11/15/2024	$	2,000	$	2,030,364
Series 2017-C 5.00%, 11/15/2025		630		650,268
5.00%, 11/15/2029		1,000		1,072,842
Nassau Health Care Corp. Series 2021 5.00%, 08/01/2024		865		875,493
New York City Municipal Water Finance Authority Series 2018-E 5.00%, 06/15/2032		1,410		1,457,252
New York State Dormitory Authority (NYU Langone Hospitals Obligated Group) Series 2014 5.00%, 07/01/2030		1,000		1,004,346
New York State Urban Development Corp. (State of New York Pers Income Tax) Series 2015-A 5.00%, 03/15/2026		1,000		1,025,375
New York Transportation Development Corp. (JFK International Air Terminal LLC) Series 2020 5.00%, 12/01/2031		1,000		1,062,860
Port Authority of New York & New Jersey Series 2014 5.00%, 09/01/2031		1,000		1,006,931
Series 2016 5.00%, 10/01/2025		1,000		1,027,674
Series 2021-2 3.00%, 10/01/2028		3,950		3,816,635
5.00%, 07/15/2024		1,500		1,512,924
5.00%, 07/15/2027		1,445		1,519,370
Triborough Bridge & Tunnel Authority Series 2017-B 5.00%, 11/15/2033		1,205		1,277,964

				20,352,953

North Carolina – 2.6%
Columbus County Industrial Facilities & Pollution Control Financing Authority (International Paper Co.) Series 2019 2.10%, 03/01/2027		1,000		979,802
County of Gaston NC Series 2023 4.00%, 05/01/2025		2,600		2,622,742



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 25

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

North Carolina Turnpike Authority Series 2020 5.00%, 02/01/2024 (Pre-refunded/ETM)	$	4,000	$	4,010,092

				7,612,636

Ohio – 0.9%
Ohio Air Quality Development Authority (American Electric Power Co., Inc.) Series 2019 2.40%, 12/01/2038		500		435,313
State of Ohio (University Hospitals Health System, Inc. Obligated Group) Series 2016 5.00%, 01/15/2030		1,090		1,121,211
University of Akron (The) Series 2019-A 5.00%, 01/01/2024		1,060		1,061,175

				2,617,699

Oklahoma – 1.1%
Oklahoma Development Finance Authority (OU Medicine Obligated Group) Series 2018-B 5.00%, 08/15/2029		1,000		987,720
Oklahoma Municipal Power Authority Series 2014-B 5.00%, 01/01/2025		1,000		1,016,610
AGM Series 2021-A 5.00%, 01/01/2024		1,250		1,251,376

				3,255,706

Oregon – 1.1%
Medford Hospital Facilities Authority (Asante Health System Obligated Group) Series 2020-A 5.00%, 08/15/2027		1,000		1,058,479
Port of Portland OR Airport Revenue Series 2022-2 5.00%, 07/01/2030		1,000		1,089,166
Port of Portland OR Airport Revenue (Portland Intl Airport) Series 2017-2 5.00%, 07/01/2029		1,000		1,043,182

				3,190,827



26 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Pennsylvania – 6.3%
Allegheny County Hospital Development Authority (UPMC Obligated Group) Series 2022 4.30% (MUNIPSA + 0.70%), 11/15/2047^(a)	$	1,000	$	986,597
Bucks County Industrial Development Authority (Grand View Hospital/Sellersville PA Obligated Group) Series 2021 5.00%, 07/01/2032		500		474,227
City of Philadelphia PA Airport Revenue Series 2020-C 5.00%, 07/01/2030		1,220		1,317,614
Series 2021 5.00%, 07/01/2025		945		963,790
Delaware River Port Authority Series 2013 5.00%, 01/01/2031 (Pre-refunded/ETM)		1,000		1,001,261
Montgomery County Higher Education and Health Authority (Thomas Jefferson University Obligated Group) Series 2018 5.00%, 09/01/2031		1,500		1,584,468
Pennsylvania Economic Development Financing Authority (Commonwealth of Pennsylvania Department of Transportation) Series 2022 5.00%, 12/31/2032		2,000		2,103,302
Pennsylvania Turnpike Commission Series 2019 5.00%, 12/01/2024		1,000		1,017,695
Pennsylvania Turnpike Commission Registration Fee Revenue Series 2023 4.45% (MUNIPSA + 0.85%), 07/15/2041^(a)		1,000		997,202
Philadelphia Authority for Industrial Development (Temple University-of The Commonwealth System of Higher Education) Series 2015-2 5.00%, 04/01/2029		1,375		1,402,715
Series 2016-2 5.00%, 04/01/2028		1,550		1,583,468



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 27

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Philadelphia Gas Works Co. Series 2016 5.00%, 10/01/2024	$	1,000	$	1,012,697
Philadelphia Municipal Authority (City of Philadelphia PA) Series 2017 5.00%, 04/01/2025		1,325		1,349,521
Reading School District BAM Series 2019-D 5.00%, 04/01/2025		1,500		1,529,322
School District of Philadelphia (The) Series 2023-A 5.00%, 06/28/2024		1,000		1,007,180

				18,331,059

Puerto Rico – 1.0%
Commonwealth of Puerto Rico Series 2021-A 5.625%, 07/01/2027		1,108		1,156,876
5.625%, 07/01/2029		675		713,412
Puerto Rico Commonwealth Aqueduct & Sewer Authority Series 2020-A 5.00%, 07/01/2030^(b)		1,000		1,011,126

				2,881,414

South Carolina – 1.4%
SCAGO Educational Facilities Corp. for Pickens School District (Pickens County School District/SC) Series 2015 5.00%, 12/01/2030		1,000		1,019,029
SCAGO Educational Facilities Corp. for Pickens School District (SCAGO Educational Facilities Corp. for Pickens School District Lease) Series 2015 5.00%, 12/01/2029		1,500		1,528,858
South Carolina Public Service Authority AGM Series 2014-C 5.00%, 12/01/2025		1,500		1,522,243

				4,070,130

Tennessee – 1.5%
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board (Vanderbilt University Medical Center Obligated Group) Series 2023 5.00%, 07/01/2028		1,000		1,073,964



28 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Metropolitan Nashville Airport Authority (The) Series 2019-B 5.00%, 07/01/2030	$	1,000	$	1,080,011
Tennessee Energy Acquisition Corp. (Goldman Sachs Group, Inc. (The)) Series 2023-A 5.00%, 05/01/2053		2,000		2,045,258

				4,199,233

Texas – 6.3%
Central Texas Regional Mobility Authority Series 2016 5.00%, 01/01/2024		1,000		1,001,123
5.00%, 01/01/2028		1,065		1,097,684
Series 2020-F 5.00%, 01/01/2025		1,315		1,325,492
Central Texas Turnpike System Series 2015-C 5.00%, 08/15/2037		1,000		1,004,617
City of Carrollton TX Series 2019 5.00%, 08/15/2031		735		816,290
City of Houston TX Series 2016-A 5.00%, 03/01/2024		1,375		1,380,918
City of San Antonio TX Airport System Series 2019-A 5.00%, 07/01/2029		550		588,696
La Joya Independent School District Series 2013 5.00%, 02/15/2028		1,355		1,459,149
North Texas Tollway Authority (North Texas Tollway System) Series 2014-A 5.00%, 01/01/2025		1,000		1,002,981
Series 2019-B 5.00%, 01/01/2024		1,000		1,001,376
Texas Municipal Gas Acquisition & Supply Corp. IV (BP PLC) Series 2023-A 5.50%, 01/01/2054		4,000		4,248,125
Texas Private Activity Bond Surface Transportation Corp. (NTE Mobility Partners LLC) Series 2019 5.00%, 12/31/2030		1,000		1,071,343



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 29

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Texas Water Development Board (Texas Water Development Board State Revolving Fund) Series 2018 5.00%, 08/01/2025	$	1,000	$	1,033,153
Tyler Independent School District Series 2022 5.00%, 02/15/2024		1,110		1,113,284

				18,144,231

Utah – 0.5%
Utah Board of Higher Education (University of Utah(The)) NATL Series 1998 5.50%, 04/01/2029		1,440		1,563,803


Virginia – 1.3%
Greater Richmond Convention Center Authority (Greater Richmond Convention Center Authority Hotel Occupancy Tax) Series 2015 5.00%, 06/15/2025		1,800		1,850,090
Virginia College Building Authority (Marymount University) Series 2015 5.25%, 07/01/2030^(b)		1,000		1,004,752
Virginia Small Business Financing Authority (Pure Salmon Virginia LLC) Series 2023 5.00%, 11/01/2052		1,000		1,002,950

				3,857,792

Washington – 2.5%
Port of Seattle WA Series 2017-D 5.00%, 05/01/2024		1,500		1,507,862
Snohomish County School District No. 13 Monroe Series 2015 5.00%, 12/01/2032		1,000		1,023,454
State of Washington Series 2016-R 5.00%, 08/01/2024		565		572,113
Series 2018-C 5.00%, 02/01/2027		1,000		1,067,770



30 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Washington Economic Development Finance Authority (Mura Cascade ELP LLC) Series 2022 3.90%, 12/01/2042^(b)	$	1,000	$	999,932
Washington Health Care Facilities Authority (Multicare Health System Obligated Group) Series 2015-B 5.00%, 08/15/2024		2,125		2,147,784

				7,318,915

West Virginia – 1.5%
West Virginia Economic Development Authority (Provident Group - Marshall Properties LLC) AGM Series 2023 5.00%, 07/01/2030		2,665		2,945,499
West Virginia Hospital Finance Authority (West Virginia United Health System Obligated Group) Series 2016A 5.00%, 06/01/2025		1,360		1,391,798

				4,337,297

Wisconsin – 2.4%
City of Milwaukee WI Series 2020-N 5.00%, 04/01/2027		1,000		1,050,432
AGM Series 2023 5.00%, 04/01/2031		1,000		1,100,752
City of Milwaukee WI Sewerage System Revenue Series 2016-S 4.00%, 06/01/2028		350		355,704
State of Wisconsin Series 2021-2 5.00%, 05/01/2025		1,730		1,778,488
Wisconsin Public Finance Authority (Celanese US Holdings LLC) Series 2016-A 5.00%, 01/01/2024		1,000		1,000,134
Wisconsin Public Finance Authority (Renown Regional Medical Center) Series 2020 5.00%, 06/01/2029		755		799,832



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 31

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Wisconsin Public Finance Authority (Southeastern Regional Medical Center Obligated Group) Series 2022 5.00%, 02/01/2030	$	1,000	$	960,731

				7,046,073

Total Long-Term Municipal Bonds (cost $261,408,553)				262,418,211


Short-Term Municipal Notes – 2.5%
District of Columbia – 0.2%
District of Columbia (MedStar Health Obligated Group) Series 2017-A 1.45%, 08/15/2038^(d)		650		650,000


Indiana – 0.5%
Indiana Municipal Power Agency (Indiana Municipal Power Agency) Series 2019-B 4.00%, 01/01/2042^(d)		1,470		1,470,000


New Jersey – 0.3%
New Jersey Health Care Facilities Financing Authority (Virtua Health Obligated Group) Series 2009-C 2.85%, 07/01/2043^(d)		800		800,000


New York – 0.4%
City of New York NY (City of New York NY) Series 2008-L 3.25%, 04/01/2038^(d)		650		650,000
Triborough Bridge & Tunnel Authority (Triborough Bridge & Tunnel Authority) Series 2022-B 3.25%, 01/01/2033^(d)		400		400,000

				1,050,000

Oregon – 0.2%
Oregon State Facilities Authority (PeaceHealth Obligated Group) Series 2018-A 3.25%, 08/01/2034^(d)		500		500,000



32 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Tennessee – 0.2%
Greeneville Health & Educational Facilities Board (Ballad Health Obligated Group) Series 2018-B 3.25%, 07/01/2045^(d)	$	700	$	700,000


Virginia – 0.7%
Roanoke Economic Development Authority (Carilion Clinic Obligated Group) Series 2020 3.42%, 07/01/2052^(d)		2,000		2,000,000


Total Short-Term Municipal Notes (cost $7,170,000)				7,170,000


Total Municipal Obligations (cost $268,578,553)				269,588,211


CORPORATES - INVESTMENT GRADE – 2.2%
Financial Institutions – 1.5%
Banking – 1.1%
BPCE SA 5.15%, 07/21/2024^(b)		375		371,156
Citigroup, Inc. 7.625%, 11/15/2028^(e)		184		183,227
Credit Suisse AG/New York NY 7.95%, 01/09/2025		850		866,609
HSBC Holdings PLC 3.803%, 03/11/2025		500		496,755
Societe Generale SA 5.00%, 01/17/2024^(b)		750		748,155
Standard Chartered PLC 7.776%, 11/16/2025^(b)		250		254,050
Synchrony Bank 5.625%, 08/23/2027		340		322,041
Wells Fargo & Co. 7.625%, 09/15/2028^(e)		148		152,072

				3,394,065

Finance – 0.4%
Aircastle Ltd. 4.125%, 05/01/2024		880		871,209
Aviation Capital Group LLC 1.95%, 01/30/2026^(b)		290		264,167

				1,135,376

				4,529,441



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 33

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Industrial – 0.7%
Consumer Cyclical - Other – 0.2%
Lennar Corp. 4.50%, 04/30/2024	$	500	$	496,505


Consumer Non-Cyclical – 0.4%
Altria Group, Inc. 3.40%, 05/06/2030		215		191,071
BAT Capital Corp. 4.906%, 04/02/2030		230		219,523
Philip Morris International, Inc. 5.625%, 11/17/2029		250		254,250
Zimmer Biomet Holdings, Inc. 1.45%, 11/22/2024		500		478,980

				1,143,824

Technology – 0.1%
CDW LLC/CDW Finance Corp. 2.67%, 12/01/2026		370		339,090

				1,979,419

Total Corporates - Investment Grade (cost $6,514,018)				6,508,860


ASSET-BACKED SECURITIES – 1.4%
Autos - Fixed Rate – 0.9%
Carvana Auto Receivables Trust Series 2023-N1, Class A 6.36%, 04/12/2027^(b)		323		322,783
Foursight Capital Automobile Receivables Trust Series 2023-1, Class A2 5.43%, 10/15/2026^(b)		677		674,106
Lendbuzz Securitization Trust Series 2023-1A, Class A2 6.92%, 08/15/2028^(b)		881		880,261
Santander Bank Auto Credit-Linked Notes Series 2023-A, Class B 6.493%, 06/15/2033^(b)		225		225,398
Tricolor Auto Securitization Trust Series 2023-1A, Class A 6.48%, 08/17/2026^(b)		499		497,941

				2,600,489

Other ABS - Fixed Rate – 0.5%
ACHV ABS Trust Series 2023-2PL, Class A 6.42%, 05/20/2030^(b)		14		13,661
Dext ABS LLC Series 2023-1, Class A2 5.99%, 03/15/2032^(b)		500		494,329



34 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)


	Principal Amount (000)		U.S. $ Value

Pagaya AI Debt Trust Series 2023-3, Class A 7.60%, 12/16/2030^(b)	$	748	$	751,228
Theorem Funding Trust Series 2023-1A, Class A 7.58%, 04/15/2029^(b)		94		94,981

				1,354,199

Total Asset-Backed Securities (cost $3,960,372)				3,954,688


GOVERNMENTS - TREASURIES – 0.9%
United States – 0.9%
U.S. Treasury Notes 4.875%, 11/30/2025 (cost $2,508,301)		2,500		2,507,422


COLLATERALIZED MORTGAGE OBLIGATIONS – 0.5%
Risk Share Floating Rate – 0.5%
Federal Home Loan Mortgage Corp. Structured Agency Credit Risk Debt Notes Series 2023-DNA1, Class M1A 7.428% (SOFR + 2.10%), 03/25/2043^(a)(b)		885		898,074
Series 2023-DNA2, Class M1A 7.429% (SOFR + 2.10%), 04/25/2043^(a)(b)		443		448,743


Total Collateralized Mortgage Obligations (cost $1,328,217)				1,346,817


SHORT-TERM INVESTMENTS – 1.8%
U.S. Treasury Bills – 1.0%
U.S. Treasury Bill Zero Coupon, 02/08/2024 (cost $2,969,669)		3,000		2,969,870



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 35

PORTFOLIO OF INVESTMENTS (continued)


	Shares		U.S. $ Value

Investment Companies – 0.8%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 5.25%^(f)(g)(h) (cost $2,352,138)		2,352,138	$	2,352,138


Total Short-Term Investments (cost $5,321,807)				5,322,008


Total Investments – 99.7% (cost $288,211,268)				289,228,006
Other assets less liabilities – 0.3%				893,243


Net Assets – 100.0%			$	290,121,249

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid (Received)			Unrealized Appreciation (Depreciation)
USD	10,200		03/31/2025	1 Day SOFR	3.847%	Annual	$	(214,151	)	$	– 0	–	$	(214,151	)
USD	4,800		03/31/2025	1 Day SOFR	4.099%	Annual		(83,199	)		– 0	–		(83,199	)
USD	3,700		03/31/2025	1 Day SOFR	4.013%	Annual		(69,143	)		– 0	–		(69,143	)
USD	4,000		06/30/2025	1 Day SOFR	4.808%	Annual		(5,407	)		– 0	–		(5,407	)
USD	1,600		07/31/2025	1 Day SOFR	4.851%	Annual		1,340			– 0	–		1,340
USD	10,600		11/05/2025	1 Day SOFR	4.859%	Annual		52,740			– 0	–		52,740
USD	6,900		11/05/2025	1 Day SOFR	4.713%	Annual		15,368			– 0	–		15,368
USD	2,700		11/05/2025	1 Day SOFR	4.762%	Annual		8,639			– 0	–		8,639
USD	2,400		05/15/2026	1 Day SOFR	4.012%	Annual		(34,217	)		– 0	–		(34,217	)
USD	2,000		04/15/2032	3.275%	1 Day SOFR	Annual		123,666			– 0	–		123,666
USD	1,000		04/15/2032	3.215%	1 Day SOFR	Annual		66,486			– 0	–		66,486
USD	650		04/15/2032	3.291%	1 Day SOFR	Annual		39,392			– 0	–		39,392
USD	420		04/15/2032	3.852%	1 Day SOFR	Annual		7,332			– 0	–		7,332
USD	1,900		08/15/2033	4.488%	1 Day SOFR	Annual		(74,595	)		– 0	–		(74,595	)

							$	(165,749	)	$	– 0	–	$	(165,749	)



36 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

(a)	Floating Rate Security. Stated interest/floor/ceiling rate was in effect at November 30, 2023.

(b)

Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration. At November 30, 2023, the aggregate market value of these securities amounted to $11,188,657 or 3.9% of net assets.

(c)	When-Issued or delayed delivery security.

(d)

Variable Rate Demand Notes are instruments whose interest rates change on a specific date (such as coupon date or interest payment date) or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). This instrument is payable on demand and is secured by letters of credit or other credit support agreements from major banks.

(e)	Securities are perpetual and, thus, do not have a predetermined maturity date. The date shown, if applicable, reflects the next call date.

(f)	Affiliated investments.

(g)	The rate shown represents the 7-day yield as of period end.

(h)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

As of November 30, 2023, the Fund’s percentages of investments in municipal bonds that are insured and in insured municipal bonds that have been pre-refunded or escrowed to maturity are 11.0% and 0.0%, respectively.

Glossary:

ABS – Asset-Backed Securities

AGM – Assured Guaranty Municipal

AMBAC – Ambac Assurance Corporation

BAM – Build American Mutual

ETM – Escrowed to Maturity

MUNIPSA – SIFMA Municipal Swap Index

NATL – National Interstate Corporation

SOFR – Secured Overnight Financing Rate

UPMC – University of Pittsburgh Medical Center

See notes to financial statements.



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 37

STATEMENT OF ASSETS & LIABILITIES

November 30, 2023


Assets
Investments in securities, at value
Unaffiliated issuers (cost $285,859,130)	$	286,875,868
Affiliated issuers (cost $2,352,138)		2,352,138
Cash collateral due from broker		395,489
Interest receivable		3,887,884
Receivable for shares of beneficial interest sold		3,748,395
Receivable for variation margin on centrally cleared swaps		23,443
Receivable for investment securities sold		19,262
Affiliated dividends receivable		18,857
Receivable due from Advisor		562

Total assets		297,321,898

Liabilities
Due to custodian		2,150
Payable for investment securities purchased		7,144,120
Advisory fee payable		54,379

Total liabilities		7,200,649

Net Assets	$	290,121,249

Composition of Net Assets
Capital stock, at par	$	1,160
Additional paid-in capital		288,666,370
Distributable earnings		1,453,719

Net Assets	$	290,121,249

Net Asset Value Per Share—500 million shares of capital stock authorized, $.0001 par value (based on 11,602,000 shares outstanding)	$	25.01

See notes to financial statements.



38 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

STATEMENT OF OPERATIONS

Year Ended November 30, 2023


Investment Income
Interest	$	6,040,552
Dividends—Affiliated issuers		114,206
Other income		1,087		$	6,155,845

Expenses
Advisory fee (see Note B)		445,832

Total expenses		445,832
Less: expenses waived and reimbursed by the Adviser (see Notes B)		(2,862	)

Net expenses					442,970

Net investment income					5,712,875

Realized and Unrealized Gain (Loss) on Investment Transactions
Net realized gain (loss) on:
Investment transactions					(254,376	)
In-kind redemptions					336,958
Swaps					(39,370	)
Net change in unrealized appreciation (depreciation) of:
Investments					852,211
Swaps					(151,509	)

Net gain on investment transactions					743,914

Net Increase in Net Assets from Operations				$	6,456,789

See notes to financial statements.



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 39

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended November 30, 2023			September 14, 2022^(a) to November 30, 2022
Increase (Decrease) in Net Assets from Operations
Net investment income	$	5,712,875		$	188,722
Net realized gain (loss) on investment transactions		43,212			(49,487	)
Net change in unrealized appreciation (depreciation) of investments		700,702			150,287

Net increase in net assets from operations		6,456,789			289,522
Distribution to Shareholders		(4,857,398	)		(98,236	)
Transactions in Shares of the Fund
Net increase		240,931,240			47,294,650
Other capital		98,627			6,055

Total increase		242,629,258			47,491,991
Net Assets
Beginning of period		47,491,991			– 0	–

End of period	$	290,121,249		$	47,491,991

(a)	Commencement of operations.

See notes to financial statements.



40 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

NOTES TO FINANCIAL STATEMENTS

November 30, 2023

NOTE A

Significant Accounting Policies

AB Active ETFs, Inc. (the “Corporation”) is registered under the Investment Company Act of 1940 (the “1940 Act”) as an open-end management investment company. The Corporation, which is a Maryland corporation, operates as a series company comprised of 12 funds currently in operation. Each fund is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB Tax-Aware Short Duration Municipal ETF (the “Fund”), a diversified portfolio. The Fund commenced investment operations on September 14, 2022. 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 Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Portfolio securities are valued at market value determined on the basis of market quotations or, if market quotations are not readily available or are unreliable, at “fair value” as determined in accordance with procedures approved by and under the oversight of the Fund’s Board of Trustees (the “Board”). Pursuant to these procedures, AllianceBernstein L.P. (the “Adviser”) serves as the Fund’s valuation designee pursuant to Rule 2a-5 of the 1940 Act. In this capacity, the Adviser is responsible, among other things, for making all fair value determinations relating to the Fund’s portfolio investments, subject to the Board’s oversight.

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 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 ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 41

NOTES TO FINANCIAL STATEMENTS (continued)

best valuation (e.g., last trade price in the case of listed options); open futures 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 any other debt instruments having 60 days or less remaining until maturity are generally valued at fair value by an independent pricing service. If an independent fair value price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. 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. Open-end mutual funds are valued at the closing net asset value per share, while exchangetraded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. 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 may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund may value foreign equity securities using fair value prices at the discretion of the Adviser.

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



42 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

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 three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. 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)

The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which are then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3.

Other fixed income investments, including non-U.S. government and corporate debt, are generally valued using quoted market prices, if available, which are typically impacted by current interest rates, maturity dates and any perceived credit risk of the issuer. Additionally, in the absence of quoted market prices, these inputs are used by pricing vendors to derive a valuation based upon industry or proprietary models which incorporate issuer specific data with relevant yield/spread comparisons with more widely quoted bonds with similar key characteristics. Those investments for which there are observable inputs are classified as Level 2. Where the inputs are not observable, the investments are classified as Level 3.



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 43

NOTES TO FINANCIAL STATEMENTS (continued)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of November 30, 2023:

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

262,418,211

– 0

–

262,418,211

Short-Term Municipal Notes

– 0

–

7,170,000

– 0

–

7,170,000

Corporates – Investment Grade

– 0

–

6,508,860

– 0

–

6,508,860

Asset-Backed Securities

– 0

–

3,954,688

– 0

–

3,954,688

Governments – Treasuries

– 0

–

2,507,422

– 0

–

2,507,422

Collateralized Mortgage Obligations

– 0

–

1,346,817

– 0

–

1,346,817

Short-Term Investments:

U.S. Treasury Bills

– 0

–

2,969,870

– 0

–

2,969,870

Investment Companies

2,352,138

– 0

–

– 0

–

2,352,138

Total Investments in Securities

2,352,138

286,875,868

– 0

–

289,228,006

Other Financial Instruments^(a):

Assets:

Centrally Cleared Interest Rate Swaps

– 0

–

314,963

– 0

–

314,963

^(b)

Liabilities:

Centrally Cleared Interest Rate Swaps

– 0

–

(480,712

)

– 0

–

(480,712

)^(b)

Total

2,352,138

286,710,119

– 0

–

289,062,257

(a)

Other financial instruments include reverse repurchase agreements and derivative instruments, such as futures, forwards and swaps. Derivative instruments are valued at the unrealized appreciation (depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, written options and written swaptions which are valued at market value.

(b)

Only variation margin receivable (payable) at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation (depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments. Where applicable, centrally cleared swaps with upfront premiums are presented here at market value.

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



44 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

income investments, 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 or depreciation of foreign currency denominated assets and liabilities.

4. Taxes

It is 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 tax year) 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 gains or losses are determined on the identified cost basis. Non-cash dividends, if any, are recorded on the ex-dividend date at the fair value of the securities received. The Fund amortizes premiums and accretes discounts as adjustments to interest income. Investment transactions are accounted for on the date the securities are purchased or sold. The Fund accounts for distributions received from REIT investments or from regulated investment companies as dividend income, realized gain, or return of capital based on information provided by the REIT or the investment company.

6. 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



abfunds.com		AB TAX-AWARE SHORT DURATION MUNICIPAL ETF ^\| 45

NOTES TO FINANCIAL STATEMENTS (continued)

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.

7. Offering Expenses

The Adviser has agreed to pay all of the Fund’s organization and offering costs. The Fund is not obligated to repay any such organizational expenses or offering costs paid by the Adviser.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, the Fund pays the Adviser a unitary advisory fee at an annual rate of .27% of the Fund’s average daily net assets. The fees are accrued daily and paid monthly.

Under the investment advisory agreement, in accordance with the unitary fee structure, the Adviser bears the cost of various third-party services required by the Fund, including audit, custodial, accounting, certain legal and transfer agency costs. Also under the investment advisory agreement, the Adviser will reimburse the Fund for the Fund’s share of the acquired funds fees and expenses (advisory fees and other expenses) of any pooled investment vehicle for which the Adviser serves as investment adviser. For the year ended November 30, 2023, such waiver/reimbursements relating to the Fund’s investment in AB Government Money Market Portfolio amounted to $2,862.

A summary of the Fund’s transactions in AB mutual funds for the year ended November 30, 2023 is as follows:


Fund	Market Value 11/30/22 (000)		Purchases at Cost (000)		Sales Proceeds (000)		Market Value 11/30/23 (000)		Dividend Income (000)
Government Money Market Portfolio	$	20	$	126,287	$	123,955	$	2,352	$	114

NOTE C

Distribution Plan

The Fund has adopted a Distribution and Service Plan pursuant to Rule 12b-1 of the Act which permits the Fund to pay distribution and servicing fees not to exceed .25% per year of the Fund’s average daily net assets. No such fees are currently paid, and the Board has not approved the commencement of payments under the Rule 12b-1 Distribution Plan.



46 ^\| AB TAX-AWARE SHORT DURATION MUNICIPAL ETF		abfunds.com

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments and in-kind purchases and sales) for the year ended November 30, 2023 were as follows:


	Purchases		Sales
Investment securities (excluding U.S. government securities)	$	211,142,582	$	12,677,055
U.S. government securities		25,663,883		21,632,113

During the year ended November 30, 2023, the Fund delivered portfolio securities for the redemption of Fund shares (in-kind redemptions). Cash and portfolio securities were transferred for redemptions at fair value. For financial reporting purposes, the Fund recorded net realized gains and losses in connection with each in-kind redemption transaction.

For the year ended November 30, 2023, the Fund had in-kind purchases and in-kind sales as follows:


	Purchases			Sales
In-kind transactions
Investment securities (excluding U.S. government securities)	$	45,719,104		$	22,556,039
U.S. government securities		– 0	–		14,554,375

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows:


Cost	$	288,211,268

Gross unrealized appreciation	$	2 ,176,269
Gross unrealized depreciation		(1,206,029	)

Net unrealized appreciation	$	970,240

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:

•

Swaps

The Fund may enter into swaps to hedge its exposure to interest rates, credit risk, equity markets or currencies. A swap is an



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NOTES TO FINANCIAL STATEMENTS (continued)

agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. In addition, collateral may be pledged or received by the Fund in accordance with the terms of the respective swaps to provide value and recourse to the Fund or its counterparties in the event of default, bankruptcy or insolvency by one of the parties to the swap.

Risks may arise as a result of the failure of the counterparty to the swap to comply with the terms of the swap. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Fund, and/or the termination value at the end of the contract. Therefore, the Fund considers the creditworthiness of each counterparty to a swap in evaluating potential counterparty risk. This risk is mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities. The Fund accrues for the interim payments on swaps on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swaps on the statement of assets and liabilities, where applicable. Once the interim payments are settled in cash, the net amount is recorded as realized gain/(loss) on swaps on the statement of operations, in addition to any realized gain/(loss) recorded upon the termination of swaps. Upfront premiums paid or received for swaps are recognized as cost or proceeds on the statement of assets and liabilities and are amortized on a straight line basis over the life of the contract. Amortized upfront premiums are included in net realized gain/(loss) from swaps on the statement of operations. Fluctuations in the value of swaps are recorded as a component of net change in unrealized appreciation/depreciation of swaps on the statement of operations.

Certain standardized swaps, including certain interest rate swaps and credit default swaps, are (or soon will be) subject to mandatory central clearing. Cleared swaps are transacted through futures commission merchants (“FCMs”) that are members of central clearinghouses, with the clearinghouse serving as central counterparty, similar to transactions in futures contracts. Centralized clearing will be required for additional categories of swaps on a phased-in basis based on requirements published by the Securities and Exchange Commission and Commodity Futures Trading Commission.



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At the time the Fund enters into a centrally cleared swap, Fund deposits and maintains as collateral an initial margin with the broker, as required by the clearinghouse on which the transaction is effected. Such amount is shown as cash collateral due from broker on the statement of assets and liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for centrally cleared swaps is generally less than non-centrally cleared swaps, since the clearinghouse, which is the issuer or counterparty to each centrally cleared swap, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.

Interest Rate Swaps:

The Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Fund may enter into interest rate swaps. Interest rate swaps are agreements between two parties to exchange cash flows based on a notional amount. The Fund may elect to pay a fixed rate and receive a floating rate, or, receive a fixed rate and pay a floating rate on a notional amount.

In addition, the Fund may also enter into interest rate swap transactions to preserve a return or spread on a particular investment or portion of its portfolio, or protecting against an increase in the price of securities the Fund anticipates purchasing at a later date. Interest rate swaps involve the exchange by the Fund with another party of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments) computed based on a contractually-based principal (or “notional”) amount. Interest rate swaps are entered into on a net basis (i.e., the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the net amount of the two payments).

During the year ended November 30, 2023, the Fund held interest rate swaps for hedging purposes.



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NOTES TO FINANCIAL STATEMENTS (continued)

During the year ended November 30, 2023, 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

Interest rate contracts

Receivable for variation margin on centrally cleared swaps

314,963

Payable for variation margin on centrally cleared swaps

480,712

Total

314,963

480,712

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities.

This amount reflects cumulative unrealized appreciation (depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives		Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation (depreciation) of swaps	$	(39,370)	$	(151,509)

Total		$	(39,370)	$	(151,509)

The following table represents the average monthly volume of the Fund’s derivative transactions during the year ended November 30, 2023:


Centrally Cleared Interest Rate Swaps:
Average notional amount	$	34,014,615

2. Currency Transactions

The Fund may invest in non-U.S. Dollar-denominated 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



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NOTES TO FINANCIAL STATEMENTS (continued)

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

Shares of the Fund

The Fund’s shares may only be bought and sold in a secondary market through a broker-dealer at a market price. Because ETF shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund issues and redeems shares at its NAV only in aggregations of a specified number of shares (a creation unit) generally in exchange for a designated portfolio of securities and/or cash (including any portion of such securities for which cash may be substituted). A fixed transaction fee is imposed on authorized participants in connection with creation unit redemption and creation transactions. Authorized participants may be required to pay an additional variable charge to cover certain costs and expenses related to the execution of trades resulting from creation unit transactions. Such variable charges, if any, are included in other capital within the Statement of Changes in Net Assets.

Transactions in shares of the Fund were as follows:



	Shares						Amount
	Year Ended November 30, 2023			September 14, 2022^(a) to November 30, 2022			Year Ended November 30, 2023			September 14, 2022^(a) to November 30, 2022

Shares sold		12,050,000			1,902,000		$	300,050,480		$	47,294,650

Shares redeemed		(2,350,000	)		– 0	–		(59,119,240	)		– 0	–

Net increase		9,700,000			1,902,000		$	240,931,240		$	47,294,650

(a)	Commencement of operations.

NOTE F

Risks Involved in Investing in the Fund

Market Risk—The value of the Fund’s assets will fluctuate as the bond market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because of economic changes or other events, including public health crises (including the occurrence of a contagious disease or illness), interest rate levels, and regional and global conflicts, that affect large portions of the market.



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NOTES TO FINANCIAL STATEMENTS (continued)

Credit Risk—An issuer or guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default, causing a loss of the full principal amount of a security and accrued interest. The degree of risk for a particular security may be reflected in its credit rating. There is the possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security.

Below Investment-Grade Securities Risk—Investments in fixed-income securities with lower ratings (commonly known as “junk bonds”) are subject to a higher probability that an issuer will default or fail to meet its payment obligations. These securities may be subject to greater price volatility due to such factors as specific municipal or corporate developments and negative performance of the junk bond market generally and may be more difficult to trade than other types of securities.

Municipal Market Risk—This is the risk that special factors may adversely affect the value of municipal securities and have a significant effect on the yield or value of the Fund’s investments in municipal securities. These factors include economic conditions, political or legislative changes, public health crises, uncertainties related to the tax status of municipal securities, and the rights of investors in these securities. To the extent that the Fund invests more of its assets in a particular state’s municipal securities, the Fund may be vulnerable to events adversely affecting that state, including economic, political and regulatory occurrences, court decisions, terrorism, public health crises (including the occurrence of a contagious disease or illness) and catastrophic natural disasters, such as hurricanes, fires or earthquakes. For example, the novel coronavirus (COVID-19) pandemic has significantly stressed the financial resources of many issuers of municipal securities, which could impair any such issuer’s ability to meet its financial obligations when due and adversely impact the value of its securities held by the Fund. As the full effects of the COVID-19 pandemic on state and local economies and on issuers of municipal securities are still uncertain, the financial difficulties of issuers of municipal securities may worsen, adversely affecting the performance of the Fund. The Fund’s investments in certain municipal securities with principal and interest payments that are made from the revenues of a specific project or facility, and not general tax revenues, may have increased risks. Factors affecting the project or facility, such as local business or economic conditions, could have a significant effect on the project’s ability to make payments of principal and interest on these securities.



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In addition, changes in tax rates or the treatment of income from certain types of municipal securities, among other things, could negatively affect the municipal securities markets.

Tax Risk—From time to time, the U.S. Government and the U.S. Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Fund by increasing taxes on that income. In such event, the Fund’s net asset value (“NAV”) could also decline as yields on municipal bonds, which are typically lower than those on taxable bonds, would be expected to increase to approximately the yield of comparable taxable bonds. Actions or anticipated actions affecting the tax-exempt status of municipal bonds could also result in significant shareholder redemptions of Fund shares as investors anticipate adverse effects on the Fund or seek higher yields to offset the potential loss of the tax deduction. As a result, the Fund would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Fund’s yield.

Interest-Rate Risk—Changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. Interest-rate risk is generally greater for fixed-income securities with longer maturities or durations. The Fund may be subject to a greater risk of rising interest rates than would normally be the case due to the recent end of a period of historically low rates and the effects of potential central bank monetary policy, and government fiscal policy, initiatives and resulting market reactions to those initiatives.

Duration Risk—Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The



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NOTES TO FINANCIAL STATEMENTS (continued)

duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise. For example, a fixed-income security with a duration of three years will likely decrease in value by approximately 3% if interest rates increase by 1%.

Inflation Risk—This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Fund’s assets can decline as can the value of the Fund’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.

Illiquid Investments Risk—Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Municipal securities may have more illiquid investments risk than other fixed-income securities because they trade less frequently and the market for municipal securities is generally smaller than many other markets.

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 or by borrowing money. The use of other types of derivative instruments by the Fund, such as 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.

Derivatives Risk—Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Fund. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, which could cause the Fund to suffer a potentially unlimited loss. Derivatives, especially over-the-counter derivatives, are also subject to counterparty risk, which is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Fund.

Variable and Floating Rate-Securities Risk—Variable and floating-rate securities pay interest at rates that are adjusted periodically, according to a



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NOTES TO FINANCIAL STATEMENTS (continued)

specific formula. Because the interest rate is reset only periodically, changes in the interest rate on these securities may lag behind changes in the prevailing market interest rates. The value of the security may rise or fall depending on changes in interest rates between periodic resets.

When-Issued and Forward Commitment Risks—These securities are purchased before the securities are actually issued or delivered. These securities are subject to the risk that, when delivered, they will be worth less than the agreed-upon purchase price.

ETF Share Price and Net Asset Value Risk—The Fund’s shares are listed for trading on the NYSE Arca, Inc. (the “Exchange”). Shares are bought and sold in the secondary market at market prices. The NAV per share of the Fund will fluctuate with changes in the market value of the Fund’s holdings. The Fund’s NAV is calculated once per day, at the end of the day. The market price of a share on the Exchange could be higher than the NAV (premium), or lower than the NAV (discount) and may fluctuate during the trading day. When all or a portion of the Fund’s underlying securities trade in a market that is closed when the market for the Fund’s shares is open, there may be differences between the current value of a security and the last quoted price for that security in the closed local market, which could lead to a deviation between the market value of the Fund’s shares and the Fund’s NAV. Disruptions in the creations and redemptions process or the existence of extreme market volatility could result in the Fund’s shares trading above or below NAV. As the Fund may invest in securities traded on foreign exchanges, Fund shares may trade at a larger premium or discount to the Fund’s NAV than shares of other ETFs. In addition, in stressed market conditions, the market for Fund shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings.

Active Trading Market Risk—There is no guarantee that an active trading market for Fund shares will exist at all times. In times of market stress, markets can suffer erratic or unpredictable trading activity, extraordinary volatility or wide bid/ask spreads, which could cause some market makers and Authorized Participants to reduce their market activity or “step away” from making a market in ETF shares. Market makers and Authorized Participants are not obligated to place or execute purchase and redemption orders. This could cause the Fund’s market price to deviate, materially, from the NAV, and reduce the effectiveness of the ETF arbitrage process. Any absence of an active trading market for Fund shares could lead to a heightened risk that there will be a difference between the market price of a Fund share and the underlying value of the Fund share.



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NOTES TO FINANCIAL STATEMENTS (continued)

Authorized Participant Risk—Only a limited number of financial institutions that enter into an authorized participant relationship with the Fund (“Authorized Participants”) may engage in creation or redemption transactions. If the Fund’s Authorized Participants decide not to create or redeem shares, Fund shares may trade at a larger premium or discount to the Fund’s NAV, or the Fund could face trading halts or de-listing.

LIBOR Replacement Risk—The Fund may be exposed to debt securities, derivatives or other financial instruments that recently transitioned from the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. LIBOR’s administrator, ICE Benchmark Administration, ceased publishing most LIBOR settings (including some U.S. LIBOR settings) by the end of 2021 and the remaining (and most widely used) U.S. Dollar LIBOR settings after June 30, 2023. The United Kingdom Financial Conduct Authority, which regulates LIBOR, will permit the use of synthetic U.S. Dollar LIBOR rates for non-U.S. contracts through September 30, 2024, but any such rates would be considered non-representative of the underlying market. Since 2018 the Federal Reserve Bank of New York has published the Secured Overnight Financing Rate (referred to as SOFR), which is intended to replace U.S. Dollar LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market. There is no assurance that the composition or characteristics of SOFR or any such alternative reference rate will be similar to or produce the same value or economic equivalence as LIBOR or that the market for SOFR-linked financial instruments will have the same volume or liquidity as did the market for LIBOR-linked financial instruments prior to LIBOR’s discontinuance or unavailability. Neither the long-term effects of the LIBOR transition process nor its ultimate success can yet be known.

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.

Management Risk—The Fund is subject to management risk because it is an actively-managed ETF. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE G

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended November 30, 2023 and November 30, 2022 were as follows:


	2023		2022
Distributions paid from:
Ordinary income	$	750,870	$	19,391

Total taxable distributions		750,870		19,391
Tax-exempt distributions		4,106,528		78,845

Total distributions paid	$	4,857,398	$	98,236

As of November 30, 2023, the components of accumulated earnings (deficit) on a tax basis were as follows:


Undistributed tax-exempt income	$	788,204
Accumulated capital and other losses		(304,725	)^(a)
Unrealized appreciation (depreciation)		970,240	^(b)

Total accumulated earnings (deficit)	$	1,453,719

(a)	As of November 30, 2023, the Fund had a net capital loss carryforward of $304,725.

(b)	The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax treatment of swaps.

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of November 30, 2023, the Fund had a net short-term capital loss carryforward of $304,725, which may be carried forward for an indefinite period.

During the current fiscal year, permanent differences primarily due to the tax treatment of gains from a redemption-in-kind resulted in a net decrease in distributable earnings and a net increase in additional paid-in capital. These reclassifications had no effect on net assets.

NOTE H

Recent Accounting Pronouncements

In December 2022, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2022-06, “Reference Rate Reform (Topic 848) – Deferral of the Sunset Date of Topic 848”. ASU 2022-06 is an amendment to ASU 2020-04, which provided optional guidance to ease the potential accounting burden due to the discontinuation of the LIBOR and other interbank-offered based reference rates and which was effective as of March 12, 2020 through December 31, 2022. ASU 2022-06 extends the effective period through December 31, 2024. Management is currently evaluating the impact, if any, of applying ASU 2022-06.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE I

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.



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FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	Year Ended November 30, 2023			September 14, 2022^(a) to November 30, 2022

Net asset value, beginning of period		$24.97			$25.00

Income From Investment Operations

Net investment income^(b)(c)		.86			.16

Net realized and unrealized loss on investment transactions		(.03	)		(.10	)

Net increase in net asset value from operations		.83			.06

Less: Dividends

Dividends from net investment income		(.79	)		(.09	)

Net asset value, end of period		$25.01			$24.97

Total Return^(d)

Total investment return based on net asset value		3.41	%		.22	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$290,121			$47,492

Ratio to average net assets of:

Expenses, net of waivers/reimbursements		.27	%		.27	%^{^}

Expenses, before waivers/reimbursements		.27	%		.27	%^{^}

Net investment income^(c)		3.46	%		2.99	%^{^}

Portfolio turnover rate^(e)		25	%		11	%

(a)	Commencement of operations.

(b)	Based on average shares outstanding.

(c)	Net of expenses waived/reimbursed by the Adviser.

(d)

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. 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 calculated for a period of less than one year is not annualized.

(e)	Excludes the value of portfolio securities received or delivered as a result of in-kind purchases or redemptions of the fund’s capital shares, including ETF Creation Units.

^	Annualized.

See notes to financial statements



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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

AB Tax-Aware Short Duration Municipal ETF

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of AB Tax-Aware Short Duration Municipal ETF (the “Fund”) (one of the funds constituting AB Active ETFs, Inc. (the “Corporation”)), including the portfolio of investments, as of November 30, 2023, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for the year then ended and for the period from September 14, 2022 (commencement of operations) to November 30, 2022 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the funds constituting AB Active ETFs, Inc.) at November 30, 2023, the results of its operations for the year then ended and the changes in its net assets and its financial highlights for the year then ended and for the period from September 14, 2022 (commencement of operations) to November 30, 2022, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of the Corporation’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and



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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2023, by correspondence with the custodian, brokers and others; when replies were not received from brokers or others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

January 26, 2024



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2023 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, 2023. For foreign shareholders, 91.06% of ordinary income dividends paid may be considered to be qualifying to be taxed as interest-related dividends.

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 2024.



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BOARD OF DIRECTORS

Gary L. Moody,⁽¹⁾

Chairman

Jorge A. Bermudez⁽¹⁾

Michael J. Downey⁽¹⁾

Onur Erzan, President and Chief Executive Officer

Nancy P. Jacklin⁽¹⁾

Jeanette W. Loeb⁽¹⁾

Carol C. McMullen⁽¹⁾

Marshall C. Turner, Jr.⁽¹⁾

Emilie D. Wrapp, Advisory Board Member

OFFICERS

Daryl Clements,⁽²⁾ Vice President

Matthew J. Norton,⁽²⁾ Vice President

Andrew D. Potter,⁽²⁾ Vice President

Nancy E. Hay, Secretary

Michael B. Reyes, Senior Vice President

Stephen M. Woetzel, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Jennifer Friedland, Chief Compliance Officer

Custodian and Accounting Agent

State Street Bank and Trust Company

One Congress Street, Suite 1

Boston, MA 02114

Principal Underwriter

Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME 04101

Legal Counsel

Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004

Independent Registered Public Accounting Firm

Ernst & Young LLP
One Manhattan West
New York, NY 10001

Transfer Agent

State Street Bank and Trust Company

One Congress Street, Suite 1

Boston, MA 02114

1	Member of the Audit Committee, the Governance and Nominating Committee, and the Independent Directors Committee.

The day-to-day management of, and investment decisions for, the Fund’s portfolios are made by the Adviser’s Tax-Aware Investment Team. Messrs. Clements, Norton and Potter are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolios.



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MANAGEMENT OF THE FUND

Board of Directors Information

The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund’s Directors is set forth below.


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INTERESTED DIRECTOR

Onur Erzan,^# 48 (2022)	Senior Vice President of AllianceBernstein L.P. (the “Adviser”), Head of Global Client Group and Head of Private Wealth. He oversees AB’s entire private wealth management business and third-party institutional and retail franchise, where he is responsible for all client services, sales and marketing, as well as product strategy, management and development worldwide. Director, President and Chief Executive Officer of the AB Mutual Funds as of April 1, 2021. He is also a member of the Equitable Holdings Management Committee. Prior to joining the firm in January 2021, he spent over 19 years with McKinsey (management consulting firm), most recently as a senior partner and co-leader of its Wealth & Asset Management practice. In addition, he co-led McKinsey’s Banking & Securities Solutions (a portfolio of data, analytics and digital assets and capabilities) globally.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR

Garry L. Moody,^## Chairman of the Board 71 (2022)	Private Investor since prior to 2019. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for accounting, pricing, custody and reporting for the Fidelity mutual funds; and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He served as a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council’s Governing Council from October 2019 through September 2023, where he also served as Chairman of the Governance Committee from October 2021 through September 2023. He is Chairman of the AB Funds and Chairman of the Independent Directors Committees since January 2023; he has served as a director or trustee since 2008, and served as Chairman of the Audit Committee of such funds from 2008 to February 2023.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR (continued)

Jorge A. Bermudez,^## 72 (2022)	Private Investor since prior to 2019. Formerly, Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008; Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007; and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (July 2017-June 2018) of the Texas A&M Foundation Board of Trustees (Trustee 2014-2021) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016; and Chair of the Audit Committee of the Board of Directors of Moody’s Corporation since December 2022. He has served as director or trustee of the AB Funds since January 2020.		82	Moody’s Corporation since April 2011


Michael J. Downey,^## 80 (2022)	Private Investor since prior to 2019. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) from 2002 until January 2019. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities, Inc. He has served as a director or trustee of the AB Funds since 2005.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR (continued)

Nancy P. Jacklin,^## 75 (2022)	Private Investor since prior to 2019. Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and served as Chair of the Governance and Nominating Committees of the AB Funds from 2014 to August 2023.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR (continued)

Jeanette W. Loeb,^## 71 (2022)	Private Investor since prior to 2019. Director of New York City Center since 2005. Formerly, Chief Executive Officer of PetCareRx (e-commerce pet pharmacy) from 2002 to 2011 and 2015 to April 2023. She was a director of MidCap Financial Investment Corporation (business development company) from August 2011 to July 2023 and a director of AB Multi-Manager Alternative Fund (fund of hedge funds) from 2012 to 2018. Formerly, affiliated with Goldman Sachs Group, Inc. (financial services) from 1977 to 1994, including as a partner thereof from 1986 to 1994. She has served as a Director of the AB Funds since April 2020 and serves as Chair of the Governance and Nominating Committees of the AB Funds since August 2023.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR (continued)

Carol C. McMullen,^## 68 (2022)	Private Investor and a member of the Advisory Board of Butcher Box (since 2018) and serves as Advisory Board Chair as of June 2023. Formerly, Managing Director of Slalom Consulting (consulting) from 2014 until July 2023; member, Mass General Brigham (formerly, Partners Healthcare) Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016 and serves as Chair of the Audit Committees of such funds since February 2023.		82	None



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MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY DIRECTOR		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY DIRECTOR
INDEPENDENT DIRECTOR (continued)

Marshall C. Turner, Jr.,^## 82 (2022)	Private Investor since prior to 2019. He was a Director of Xilinx, Inc. (programmable logic semi-conductors and adaptable, intelligent computing) from 2007 through August 2020, and is a former director of 33 other companies and organizations. Former Chairman and CEO of Dupont Photomasks, Inc. (semi-conductor manufacturing equipment) from 2003 through 2006. He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the board of the George Lucas Educational Foundation. He has served as a director of one AB Fund since 1992, and director or trustee of all AB Funds since 2005. He has served as both Chairman of the AB Funds and Chairman of the Independent Directors Committees from 2014 through December 2022.		82	None

ADVISORY BOARD MEMBER

Emilie D. Wrapp,⁺ 68 (2024)	Former Senior Vice President, Counsel, Assistant Secretary & Senior Mutual Fund Legal Advisor of the Adviser (January 2023 – June 2023). Prior thereto, Senior Vice President, Counsel, and Head of Mutual Fund & Retail Legal of the Adviser; Assistant General Counsel and Assistant Secretary of ABI since prior to 2019 until June 2023.		82	None

*	The address for each of the Fund’s Directors and Advisory Board member is c/o AllianceBernstein L.P., Attention: Legal and Compliance Department — Mutual Fund Legal, 1345 Avenue of the Americas, New York, NY 10105.



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MANAGEMENT OF THE FUND (continued)

**	There is no stated term of office for the Fund’s Directors and Advisory Board member.

***

The information above includes each Director’s principal occupation during the last five years and other information relating to the experience, attributes and skills relevant to each Director’s qualifications to serve as a, which led to the conclusion that each Trustee should serve as a Director for the Fund.

#	Mr. Erzan is an “interested person” of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser. Ms. Wrapp is an “interested person” of the Fund, as defined in the 1940 Act, due to her former affiliation with the Adviser.

##	Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee.



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MANAGEMENT OF THE FUND (continued)

Officer Information

Certain information concerning the Fund’s Officers is listed below.


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST FIVE YEARS**
Onur Erzan 48	President and Chief Executive Officer	See biography above.

Daryl Clements 56	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2019.

Matthew J. Norton 41	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2019. He is also Chief Investment Officer-Municipal Bonds.

Andrew D. Potter 38	Vice President	Vice President of the Adviser**, with which he has been associated since prior to 2019.

Nancy E. Hay 51	Secretary	Senior Vice President and Counsel of the Adviser, with which she has been associated since prior to 2019 and Assistant Secretary of AllianceBernstein Investments, Inc. (“AB”) .

Michael B. Reyes 47	Senior Vice President	Vice President of the Adviser**, with which he has been associated since prior to 2019.

Stephen M. Woetzel 52	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services, Inc. (“ABIS”)**, with which he has been associated since prior to 2019.

Phyllis J. Clarke 63	Controller	Vice President of the ABIS**, with which she has been associated since prior to 2019.

Jennifer Friedland 49	Chief Compliance Officer	Vice President of the Adviser since 2020 and Mutual Fund Chief Compliance Officer (of all Funds since January 2023 and of the ETF Funds since 2022). Before joining the Adviser in 2020, she was Chief Compliance Officer at WestEnd Advisors, LLC from 2013 to 2019.

*	The address for each of the Fund’s Officers is 1345 Avenue of the Americas, New York, NY 10105.

**	The Adviser, ABI and ABIS are affiliates of the Fund.

The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Trustees and Officers and is available without charge upon request. Contact your financial representative or AB at (800) 227-4618, or visit www.abfunds.com, for a free prospectus or SAI.



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Operation and Effectiveness of the Fund’s Liquidity Risk

Management Program:

In October 2016, the Securities and Exchange Commission (“SEC”) adopted the open-end fund liquidity rule (the “Liquidity Rule”). In June 2018 the SEC adopted a requirement that funds disclose information about the operation and effectiveness of their Liquidity Risk Management Program (“LRMP”) in their reports to shareholders.

One of the requirements of the Liquidity Rule is for the Fund to designate an Administrator of the Fund’s Liquidity Risk Management Program. The Administrator of the Fund’s LRMP is AllianceBernstein L.P., the Fund’s investment adviser (the “Adviser”). The Adviser has delegated the responsibility to its Liquidity Risk Management Committee (the “Committee”).

Another requirement of the Liquidity Rule is for the Fund’s Board of Trustees (the “Fund Board”) to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the Fund’s LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2023, which covered the period January 1, 2022 through December 31, 2022 (the “Program Reporting Period”).

The LRMP’s principal objectives include supporting the Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that the Fund will be unable to meet its redemption obligations in a timely manner.

Pursuant to the LRMP, the Fund classifies the liquidity of its portfolio investments into one of the four categories defined by the SEC: Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid. These classifications are reported to the SEC on Form N-PORT.

During the Program Reporting Period, the Committee reviewed whether the Fund’s strategy is appropriate for an open-end structure, incorporating any holdings of less liquid and illiquid assets. If the Fund participated in derivative transactions, the exposure from such transactions were considered in the LRMP.

The Committee also performed an analysis to determine whether the Fund is required to maintain a Highly Liquid Investment Minimum (“HLIM”). The Committee also incorporated the following information when determining the Fund’s reasonably anticipated trading size for purposes of liquidity monitoring: historical net redemption activity, a Fund’s concentration in an issuer, shareholder concentration, investment performance, total net assets, and distribution channels.

The Adviser informed the Fund Board that the Committee believes the Fund’s LRMP is adequately designed, has been implemented as intended, and has operated effectively since its inception. No material exceptions have been noted since the implementation of the LRMP. During the Program Reporting Period, liquidity in all markets was challenged due to rising rates and economic uncertainty. However, markets also remained orderly during the Program Reporting Period. There were no liquidity events that impacted the Fund or its ability to timely meet redemptions during the Program Reporting Period.



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Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested directors (the “directors”) of AB Active ETFs, Inc. (the “Company”) unanimously approved the Company’s Advisory Agreement with the Adviser in respect of AB Tax-Aware Short Duration Municipal ETF (the “Fund”) for an initial two-year period at meetings held in-person on May 3-4, 2022 (the “May Meeting”) and August 2-3, 2022 (together with the May Meeting, the “Meetings”).

Prior to approval of the Advisory Agreement, the directors had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The directors also reviewed additional materials, including comparative analytical data prepared by the Senior Vice President of the Fund. The directors also discussed the proposed approval in private sessions with counsel.

The directors considered their knowledge of the nature and quality of the services to be provided by the Adviser to the Fund gained from their experience as directors or trustees of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AB Funds. The directors noted that they have four regular meetings each year, at each of which they review extensive materials and information from the Adviser, including information on the investment performance of the AB Funds.

The directors also considered all factors they believed relevant, including the specific matters discussed below. During the course of their deliberations, the directors evaluated, among other things, the reasonableness of the proposed advisory fee. The directors did not identify any particular information that was all-important or controlling, and different directors may have attributed different weights to the various factors. The directors determined that the selection of the Adviser to manage the Fund and the overall arrangements between the Fund and the Adviser, as provided in the Advisory Agreement, including the proposed advisory fee, were fair and reasonable in light of the services to be performed, expenses to be incurred and such other matters as the directors considered relevant in the exercise of their business judgment. The material factors and conclusions



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that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services to be Provided

The directors considered the scope and quality of services to be provided by the Adviser under the Advisory Agreement, including the quality of the investment research capabilities of the Adviser and the other resources it has dedicated to performing services for the AB Funds. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Adviser. The directors also considered that the Advisory Agreement provides that the Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services to the Fund by employees of the Adviser or its affiliates. Requests for these reimbursements will be subject to the directors’ approval on a quarterly basis. The directors noted that the Adviser does not expect to request such reimbursements. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of the Fund’s other service providers, also was considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services to be provided to the Fund under the Advisory Agreement.

Costs of Services to be Provided and Profitability

Because the Fund had not yet commenced operations, the directors were unable to consider historical information about the profitability of the Fund. However, the Adviser agreed to provide the directors with profitability information in connection with future proposed continuances of the Advisory Agreement. They also considered the costs to be borne by the Adviser in providing services to the Fund and that the Fund was unlikely to be profitable to the Adviser unless it achieves a material level of net assets.

Fall-Out Benefits

The directors considered the other benefits to the Adviser from its proposed relationship with the Fund. The directors recognized that the Adviser’s future profitability would be somewhat lower without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

Since the Fund had not yet commenced operations, no performance or other historical information for the Fund was available. Based on the Adviser’s written and oral presentations regarding the proposed management of the Fund and their general knowledge and confidence in the Adviser’s expertise in managing mutual funds, the directors concluded that they were satisfied that the Adviser was capable of providing high quality Fund management services to the Fund.



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Advisory Fees and Other Expenses

The directors considered the proposed advisory fee rate payable by the Fund to the Adviser and information prepared by an independent service provider (the “15(c) service provider”), concerning advisory fee rates payable by other funds in the same category as the Fund, based on the Fund’s projected net assets of $250 million. The directors noted that the proposed advisory fee is a unitary fee and that the Adviser will pay all expenses of the Fund except for certain expenses payable by the Fund such as interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees payable by other funds. The directors considered the Fund’s proposed contractual advisory fee rate against a peer group median and noted that it was equal to the median.

The directors also considered the Adviser’s fee schedule for other clients utilizing investment strategies similar to those of the Fund. For this purpose, they reviewed the relevant advisory fee information from the Adviser’s Form ADV and in a report from the Fund’s Senior Vice President and noted the differences between the Fund’s proposed fee schedule, on the one hand, and the Adviser’s institutional fee schedule, on the other. The directors noted that the Adviser may, in some cases, agree to fee rates with large institutional clients that are lower than those reviewed by the directors and that they had previously discussed with the Adviser its policies in respect of such arrangements. The directors also compared the proposed advisory fee rate for the Fund with those for other funds advised by the Adviser utilizing similar investment strategies.

The Adviser reviewed with the directors the significantly greater scope of the services it will provide to the Fund relative to institutional clients. In this regard, the Adviser noted, among other things, that, compared to institutional accounts, the Fund (i) demands considerably more portfolio management, research and trading resources due to significantly higher daily cash flows; (ii) has more tax and regulatory restrictions and compliance obligations; (iii) must prepare and file or distribute regulatory and other communications about fund operations; and (iv) must provide shareholder servicing to retail investors. The Adviser also reviewed the greater legal risks presented by the large and changing population of Fund shareholders who may assert claims against the Adviser in individual or class actions, and the greater entrepreneurial risk in offering new fund products, which require substantial investment to launch, may not succeed, and generally must be priced to compete with larger, more established funds resulting in lack of to the Adviser until a new fund achieves scale. In light of the substantial differences in services rendered by the Adviser to institutional clients as compared to the Fund, and the different risk profile, the directors considered these fee comparisons inapt and did not place significant weight on them in their deliberations. The



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directors noted that the proposed unitary fee for the Fund covers additional services provided by third parties and thus is not directly comparable to the Adviser’s institutional fee schedule and the schedule of fees for other funds advised by the Adviser.

In connection with their review of the Fund’s proposed advisory fee, the directors also considered the projected total expense ratio of the shares of the Fund in comparison to a group of similar funds (“peer group”) and a larger group of similar funds (“peer universe”) selected by the 15(c) service provider. The directors view the projected expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Fund by others. The directors noted that the Fund’s projected expense ratio was equal to the medians. Based on their review, the directors concluded that the Fund’s projected expense ratio was acceptable.

Economies of Scale

The directors noted that the proposed advisory fee schedule for the Fund does not contain breakpoints and that they had discussed their strong preference for breakpoints in advisory contracts with the Adviser. The directors took into consideration prior presentations by an independent consultant on economies of scale in the mutual fund industry and for the AB Funds, and presentations from time to time by the Adviser concerning certain of its views on economies of scale. The directors also had requested and received from the Adviser certain updates on economies of scale in advance of the Meetings. The directors believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The directors noted that there is no established methodology for setting breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many ETFs do not have breakpoints at all. The directors informed the Adviser that they would monitor the Fund’s asset level and its profitability to the Adviser and anticipated revisiting the question of breakpoints in the future if circumstances warranted doing so.



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This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

Select US Equity Portfolio

Sustainable US Thematic Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/GLOBAL EQUITY

CORE

Global Core Equity Portfolio

International Low Volatility Equity Portfolio¹

Sustainable Global Thematic Fund

Sustainable International Thematic Fund

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

GROWTH

Concentrated International Growth Portfolio

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

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Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio

National Portfolio

Arizona Portfolio

California Portfolio

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Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

TAXABLE

Bond Inflation Strategy

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Intermediate Duration Portfolio

Short Duration High Yield Portfolio¹

Short Duration Income Portfolio

Short Duration Portfolio

Sustainable Thematic Credit Portfolio

Total Return Bond Portfolio

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

MULTI-ASSET

All Market Total Return Portfolio

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Sustainable Thematic Balanced Portfolio

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

EXCHANGE-TRADED FUNDS

Conservative Buffer ETF

Core Plus Bond ETF

Corporate Bond ETF

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High Yield ETF

Tax-Aware Intermediate Municipal ETF

Tax-Aware Long Municipal ETF

Tax-Aware Short Duration Municipal ETF

Ultra Short Income ETF

US High Dividend ETF

US Large Cap Strategic Equities ETF

US Low Volatility Equity ETF

We also offer Government Money Market Portfolio, which serves as the money market fund exchange vehicle for the AB mutual funds. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

1	Prior to July 5, 2023, International Low Volatility Equity Portfolio was named International Strategic Core Portfolio and Short Duration High Yield Portfolio was named Limited Duration High Income Portfolio.



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NOTES



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NOTES



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AB TAX-AWARE SHORT DURATION MUNICIPAL ETF

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