AB Municipal Income Fund, Inc.
LOGO
PROSPECTUS   |   SEPTEMBER 29, 2023
AB Municipal Income Portfolios
(Shares Offered—Exchange Ticker Symbol)
 
LOGO   AB National Portfolio
(Class A–ALTHX; Class C–ALNCX; Advisor Class–ALTVX)
   
LOGO   AB New Jersey Portfolio
(Class A–ANJAX; Class C–ANJCX)
LOGO   AB High Income Municipal Portfolio
(Class A–ABTHX; Class C–ABTFX; Advisor Class–ABTYX; Class Z–ABTZX)
   
LOGO   AB New York Portfolio
(Class A–ALNYX; Class C–ANYCX; Advisor Class–ALNVX)
LOGO   AB California Portfolio
(Class A–ALCAX; Class C–ACACX; Advisor Class–ALCVX)
   
LOGO   AB Ohio Portfolio
(Class A–AOHAX; Class C–AOHCX)
LOGO   AB Arizona Portfolio
(Class A–AAZAX; Class C–AAZCX; Advisor Class–AAZYX)
   
LOGO   AB Pennsylvania Portfolio
(Class A–APAAX; Class C–APACX)
LOGO   AB Massachusetts Portfolio
(Class A–AMAAX; Class C–AMACX; Advisor Class–AMAYX)
   
LOGO   AB Virginia Portfolio
(Class A–AVAAX; Class C–AVACX; Advisor Class–AVAYX)
LOGO   AB Minnesota Portfolio
(Class A–AMNAX; Class C–AMNCX)
   
 
 
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

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

TABLE OF CONTENTS
 
 
    Page  
SUMMARY INFORMATION     4  
    4  
    8  
    13  
    18  
    23  
    27  
    31  
    35  
    39  
    43  
    47  
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS’ STRATEGIES, RISKS AND INVESTMENTS     52  
INVESTING IN THE PORTFOLIOS     61  
    61  
    63  
    64  
    65  
    66  
    66  
    68  
    68  
    69  
    70  
MANAGEMENT OF THE PORTFOLIOS     71  
DIVIDENDS, DISTRIBUTIONS AND TAXES     73  
GENERAL INFORMATION     75  
GLOSSARY     76  
FINANCIAL HIGHLIGHTS     77  
APPENDIX A—HYPOTHETICAL INVESTMENT AND EXPENSE INFORMATION     A-1  
APPENDIX B—FINANCIAL INTERMEDIARY WAIVERS     B-1  

SUMMARY INFORMATION
 
 
AB National Portfolio
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income, exempt from federal income tax, that is available without assuming what the Adviser considers to be undue risk to principal or income.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
Class A
Shares
Class C
Shares
Advisor Class
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
3.00% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
None 1.00%(a) None
Exchange Fee
None None None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
Class A Class C Advisor Class
Management Fees
.45% .45% .45%
Distribution and/or Service (12b-1) Fees
.25% 1.00% None
Other Expenses:
Transfer Agent
.04% .04% .04%
Other Expenses(b)
.06% .06% .06%
 
 
 
 
 
 
Total Other Expenses
.10% .10% .10%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
.80% 1.55% .55%
 
 
 
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
(.05)% (.05)% (.05)%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
.75% 1.50% .50%
 
 
 
 
 
 
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .75%, 1.50% and .50% of average daily net assets, respectively, for Class A, Class C and Advisor Class shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Directors. In addition, each of the agreements will be automatically extended for one‑year terms thereafter unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
4

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Class A Class C Advisor Class
After 1 Year
$ 374 $ 253 $ 51
After 3 Years
$ 543 $ 485 $ 171
After 5 Years
$ 726 $ 840 $ 302
After 10 Years
$ 1,256 $ 1,639 $ 684
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 32% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. The Portfolio may invest more than 25% of its assets in a single state.
The Portfolio may also invest in:
 
forward commitments;
 
tender option bonds (“TOBs”);
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
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 Portfolio 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 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 the 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.
 
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 Portfolio’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 Portfolio invests more of its assets in a particular state’s municipal securities, the Portfolio 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. The Portfolio’s investments in certain municipal securities with
 
5

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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
how the Portfolio’s performance changed from year to year over ten years; and
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
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You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.58%.
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.43%, 1st quarter, 2014; and Worst Quarter was down -5.86%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
1 Year 5 Years 10 Years
Class A* Return Before Taxes -12.51% 0.14% 1.47%
Return After Taxes on Distributions -12.54% 0.12% 1.45%
  Return After Taxes on Distributions and Sale of Portfolio Shares -6.52% 0.69% 1.78%
Class C Return Before Taxes -11.39% 0.00% 1.03%
Advisor Class Return Before Taxes -9.60% 1.01% 2.05%
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
-8.53% 1.25% 2.13%
 
*
After-tax Returns:
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
7

AB High Income Municipal Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income, exempt from federal income tax, that is available consistent with what the Adviser considers to be an appropriate level of risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
Class A
Shares
Class C
Shares
Advisor Class
Shares
Class Z
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
3.00% None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
None 1.00%(a) None None
Exchange Fee
None None None None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
Class A Class C Advisor Class Class Z
Management Fees
.50% .49% .49% .50%
Distribution and/or Service (12b-1) Fees
.25% 1.00% None None
Other Expenses:
Transfer Agent
.03% .03% .03% .03%
Interest Expense
.35% .35% .35% .35%
Other Expenses(b)
.03% .03% .03% .03%
 
 
 
 
 
 
 
 
Total Other Expenses
.41% .41% .41% .41%
 
 
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense Before Waiver
1.16% 1.90% .90% .91%
 
 
 
 
 
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
(.01)% (.00)% (.00)% (.01)%
 
 
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense After Fee Waiver and/or Expense Reimbursement(d)
1.15% 1.90% .90% .90%
 
 
 
 
 
 
 
 
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .80%, 1.55%, .55% and .55% of average daily net assets, respectively, for Class A, Class C, Advisor Class and Class Z shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Directors. In addition, each of the agreements will be automatically extended for one-year terms thereafter unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
(d)
If interest expense were excluded, Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement would be as follows:
 
Class A Class C Advisor Class Class Z
.80% 1.55% .55% .55%
 
8

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of these periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Class A Class C Advisor Class Class Z
After 1 Year
$ 413 $ 292 $ 91 $ 91
After 3 Years
$ 653 $ 596 $ 286 $ 286
After 5 Years
$ 913 $ 1,025 $ 497 $ 497
After 10 Years
$ 1,655 $ 2,026 $ 1,107 $ 1,107
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 26% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding municipal securities that may be non-investment grade or investment grade. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers.
The Adviser selects securities for purchase or sale based on its assessment of the securities’ risk and return characteristics as well as the securities’ impact on the overall risk and return characteristics of the Portfolio. In making this assessment, the Adviser takes into account various factors including the credit quality and sensitivity to interest rates of the securities under consideration and of the Portfolio’s other holdings.
The Portfolio may invest without limit in lower-rated securities (“junk bonds”), which may include securities having the lowest rating, and in unrated securities that, in the Adviser’s judgment, would be lower-rated securities if rated. The Portfolio may invest in fixed-income securities with any maturity or duration. The Portfolio will seek to increase income for shareholders by investing in longer-maturity bonds. Consistent with its objective of seeking a higher level of income, the Portfolio may experience greater volatility and a higher risk of loss of principal than other municipal funds.
The Portfolio may also invest in:
 
forward commitments;
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities;
 
certain types of mortgage-related securities; and
 
derivatives, such as options, futures contracts, forwards and swaps.
The Portfolio may make short sales of securities or maintain a short position, and may use other investment techniques. The Portfolio may use leverage for investment purposes to increase income through the use of tender option bonds (“TOBs”) and derivative instruments, such as interest rate swaps.
PRINCIPAL RISKS:
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
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 Portfolio may be subject to a greater risk of rising interest rates than would normally be the case due to the recent
 
9

end of a period of historically low rates and the effects of potential central bank monetary policy, and government fiscal policy, initiatives and 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 the 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.
 
Below Investment Grade Securities Risk: Investments in fixed-income securities with lower ratings (commonly known as “junk bonds”) have 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 corporate developments, interest rate sensitivity 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 Portfolio’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 Portfolio invests more of its assets in a particular state’s municipal securities, the Portfolio 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. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
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.
 
Leverage Risk: To the extent the Portfolio uses leveraging techniques, such as TOBs, its net asset value, or 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 Portfolio’s investments.
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase
 
10

in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
how the Portfolio’s performance changed from year to year over ten years; and
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.57%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 6.45%, 1st quarter, 2014; and Worst Quarter was down -7.60%, 1st quarter, 2022.
 
11

Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
1 Year 5 Years 10 Years
Class A* Return Before Taxes -17.90% 0.39% 2.43%
Return After Taxes on Distributions -17.98% 0.30% 2.35%
  Return After Taxes on Distributions and Sale of Portfolio Shares -9.36% 1.12% 2.75%
Class C Return Before Taxes -16.84% 0.23% 1.98%
Advisor Class Return Before Taxes -15.17% 1.24% 3.01%
Class Z** Return Before Taxes -15.15% 1.27% 3.01%
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
-8.53% 1.25% 2.13%
 
*
After-tax Returns:
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
 
**
Inception date for Class Z shares: 9/28/2018. Performance information for periods prior to the inception of Class Z shares is the performance of the Portfolio’s Class A shares adjusted to reflect the expenses of Class Z shares.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
12

AB California Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income, exempt from federal income tax and California personal income tax, that is available without assuming what the Adviser considers to be undue risk to income or principal.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
Class A
Shares
Class C
Shares
Advisor Class
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
3.00% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
None 1.00%(a) None
Exchange Fee
None None None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
Class A Class C Advisor Class
Management Fees
.45% .45% .45%
Distribution and/or Service (12b-1) Fees
.25% 1.00% None
Other Expenses:
Transfer Agent
.03% .03% .03%
Other Expenses(b)
.05% .05% .05%
 
 
 
 
 
 
Total Other Expenses
.08% .08% .08%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
.78% 1.53% .53%
 
 
 
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
(.03)% (.03)% (.03)%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
.75% 1.50% .50%
 
 
 
 
 
 
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .75%, 1.50% and .50% of average daily net assets, respectively, for Class A, Class C and Advisor Class shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Directors. In addition, each of the agreements will be automatically extended for one‑year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
13

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Class A Class C Advisor Class
After 1 Year
$ 374 $ 253 $ 51
After 3 Years
$ 539 $ 480 $ 167
After 5 Years
$ 717 $ 831 $ 293
After 10 Years
$ 1,234 $ 1,619 $ 662
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 30% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of California or municipal securities with interest that is otherwise exempt from California state income tax.
The Portfolio may also invest in:
 
forward commitments;
 
tender option bonds (“TOBs”);
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
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 Portfolio 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 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 the 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.
 
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 Portfolio’s investments in municipal securities. These factors include economic conditions, political or legislative changes, catastrophic natural disasters, public health crises, uncertainties related to the tax status of municipal securities, and the rights of investors in these securities. The Portfolio’s investments in California municipal securities may be vulnerable to events adversely affecting its economy. California’s economy, the largest of the 50 states, is relatively
 
14

diverse, which makes it less vulnerable to events affecting a particular industry. However, there remain a number of risks that threaten the state’s economy, including potentially unfavorable changes to federal policies, the uncertain impact of changes in federal tax law and trade policy, significant unfunded liabilities of the two main retirement systems managed by state entities, the California Public Employees Retirement System and the California State Teachers’ Retirement System and public health crises (including the occurrence of a contagious disease or illness). California’s economy may also be affected by natural disasters, such as earthquakes, droughts, flooding or fires. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
 
15

BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
how the Portfolio’s performance changed from year to year over ten years; and
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.81%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.85%, 4th quarter, 2022; and Worst Quarter was down -5.44%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
1 Year 5 Years 10 Years
Class A* Return Before Taxes -11.52% 0.29% 1.65%
Return After Taxes on Distributions -11.55% 0.27% 1.62%
Return After Taxes on Distributions and Sale of Portfolio Shares -5.90% 0.86% 1.95%
Class C Return Before Taxes -10.33% 0.15% 1.21%
Advisor Class Return Before Taxes -8.53% 1.16% 2.22%
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
-8.53% 1.25% 2.13%
 
*
After-tax Returns:
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
 
16

INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
17

AB Arizona Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and State of Arizona personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
     
Class A
Shares
  
Class C
Shares
   Advisor Class
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
   3.00%    None    None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
   None    1.00%(a)    None
Exchange Fee
   None    None    None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
      Class A      Class C      Advisor Class  
Management Fees
     .45%        .45%        .45%  
Distribution and/or Service (12b-1) Fees
     .25%        1.00%        None  
Other Expenses:
        
Transfer Agent
     .04%        .04%        .04%  
Interest Expense
     .01%        .01%        .01%  
Other Expenses(b)
     .33%        .33%        .33%  
  
 
 
    
 
 
    
 
 
 
Total Other Expenses
     .38%        .38%        .38%  
  
 
 
    
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense Before Waiver
     1.08%        1.83%        .83%  
  
 
 
    
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
     (.29)%        (.29)%        (.29)%  
  
 
 
    
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense After Fee Waiver and/or Expense Reimbursement(d)
     .79%        1.54%        .54%  
  
 
 
    
 
 
    
 
 
 
   
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .78%, 1.53% and .53% of average daily net assets, respectively, for Class A, Class C and Advisor Class shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each of the agreements will be automatically extended for one‑year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
(d)
If interest expense were excluded, Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement would be as follows:
 
Class A     Class C     Advisor Class      
  .78%       1.53%       .53%    
 
18

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
        Class A        Class C        Advisor Class  
After 1 Year
     $ 378        $ 257      $ 55  
After 3 Years
     $ 605        $ 547        $ 236  
After 5 Years
     $ 850        $ 963        $ 432  
After 10 Years
     $ 1,552        $ 1,927        $ 998  
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 16% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of Arizona or municipal securities with interest that is otherwise exempt from Arizona state income tax.
The Portfolio may also invest in:
 
 
forward commitments;
 
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
 
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
 
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 Portfolio 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 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 the 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.
 
 
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 Portfolio’s investments in municipal securities. These factors include economic conditions, political or legislative changes, catastrophic natural disasters, public health crises, uncertainties related to the tax status of municipal securities, and the rights of investors in these securities. The Portfolio’s investments in Arizona municipal securities are vulnerable to events adversely affecting its economy, including public health crises (including the occurrence of a contagious disease or illness). The leading sectors of Arizona’s economy include the trade, transportation and utilities, leisure and hospitality, manufacturing, education and health services, professional and business services and financial activities sectors. These sectors are
 
19

 
particularly vulnerable to times of impaired consumer and business spending, such as during the COVID-19 pandemic. Arizona’s economy may also be affected by natural disasters, such as fires and flooding. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
 
20

BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
 
how the Portfolio’s performance changed from year to year over ten years; and
 
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 1.73%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.19%, 4th quarter, 2022; and Worst Quarter was down -4.97%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
           1 Year        5 Years        10 Years  
Class A*   Return Before Taxes      -11.42%          0.15%          1.51%  
  Return After Taxes on Distributions      -11.47%          0.13%          1.49%  
    Return After Taxes on Distributions and Sale of Portfolio Shares      -5.82%          0.73%          1.83%  
Class C   Return Before Taxes      -10.29%          -0.02%          1.07%  
Advisor Class**   Return Before Taxes      -8.48%          1.01%          2.07%  
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
     -8.53%          1.25%          2.13%  
 
*
After-tax Returns:
 
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
 
**
Inception Date for Advisor Class shares: 3/25/2021. Performance information for periods prior to the inception of Advisor Class shares is the performance of the Portfolio’s Class A shares adjusted to reflect the expenses of Advisor Class shares.
 
21

INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
22

AB Massachusetts Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and Commonwealth of Massachusetts personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
     Class A
Shares
   Class C
Shares
   Advisor Class
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
  3.00%    None    None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
  None    1.00%(a)    None
Exchange Fee
  None    None    None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
      Class A      Class C      Advisor Class  
Management Fees
     .45%        .45%        .45%  
Distribution and/or Service (12b-1) Fees
     .25%        1.00%        None  
Other Expenses:
        
Transfer Agent
     .03%        .03%        .03%  
Other Expenses(b)
     .17%        .17%        .17%  
  
 
 
    
 
 
    
 
 
 
Total Other Expenses
     .20%        .20%        .20%  
  
 
 
    
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
     .90%        1.65%        .65%  
  
 
 
    
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
     (.13)%        (.13)%        (.13)%  
  
 
 
    
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
     .77%        1.52%        .52%  
  
 
 
    
 
 
    
 
 
 
                            
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .77%, 1.52% and .52% of average daily net assets, respectively, for Class A, Class C and Advisor Class shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each of the agreements will be automatically extended for one‑year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
23

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
        Class A        Class C        Advisor Class  
After 1 Year
     $ 376        $ 255      $ 53  
After 3 Years
     $ 566        $ 508        $ 195  
After 5 Years
     $ 771        $ 885        $ 349  
After 10 Years
     $ 1,363        $ 1,743        $ 798  
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 14% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of Massachusetts or municipal securities with interest that is otherwise exempt from Massachusetts state income tax.
The Portfolio may also invest in:
 
 
forward commitments;
 
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
 
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
 
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 Portfolio 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 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 the 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.
 
 
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 Portfolio’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. The Portfolio’s investments in Massachusetts municipal securities are vulnerable to events adversely affecting its economy, which is relatively diverse and based on education and health services, professional and business services (including financial and high-tech industries), and leisure and hospitality, including public health crises (including the occurrence of a contagious disease or illness). Massachusetts has a high degree of job stability and an educated
 
24

 
work force due to its large concentration of colleges and universities but the high cost of doing business in Massachusetts may serve as an impediment to job creation. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
 
how the Portfolio’s performance changed from year to year over ten years; and
 
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
25

You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 1.95%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.54%, 4th quarter, 2022; and Worst Quarter was down -5.70%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
           1 Year        5 Years        10 Years  
Class A*   Return Before Taxes      -12.32%          0.11%          1.20%  
  Return After Taxes on Distributions      -12.37%          0.05%          1.14%  
    Return After Taxes on Distributions and Sale of Portfolio Shares      -6.44%          0.66%          1.53%  
Class C   Return Before Taxes      -11.18%          -0.03%          0.76%  
Advisor Class**   Return Before Taxes      -9.47%          0.98%          1.75%  
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
     -8.53%          1.25%          2.13%  
 
*
After-tax Returns:
 
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
 
**
Inception Date for Advisor Class shares: 7/25/2016. Performance information for periods prior to the inception of Advisor Class shares is the performance of the Portfolio’s Class A shares adjusted to reflect the expenses of Advisor Class shares.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
26

AB Minnesota Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and State of Minnesota personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
        Class A
Shares
     Class C
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
     3.00%      None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
     None      1.00%(a)
Exchange Fee
     None      None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
     Class A      Class C  
Management Fees
    .45%        .45%  
Distribution and/or Service (12b-1) Fees
    .25%        1.00%  
Other Expenses:
    
Transfer Agent
    .09%        .09%  
Other Expenses(b)
    .73%        .73%  
 
 
 
    
 
 
 
Total Other Expenses
    .82%        .82%  
 
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
    1.52%        2.27%  
 
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
    (.67)%        (.67)%  
 
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
    .85%        1.60%  
 
 
 
    
 
 
 
                  
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .85% and 1.60% of average daily net assets, respectively, for Class A and Class C shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each agreement will be automatically extended for one-year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
27

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
        Class A        Class C  
After 1 Year
     $ 384        $ 263
After 3 Years
     $ 702        $ 645  
After 5 Years
     $ 1,042        $ 1,154  
After 10 Years
     $ 2,003        $ 2,364  
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 17% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of Minnesota or municipal securities with interest that is otherwise exempt from Minnesota state income tax.
The Portfolio may also invest in:
 
 
forward commitments;
 
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
 
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
 
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 Portfolio 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 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 the 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.
 
 
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 Portfolio’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. The Portfolio’s investments in Minnesota municipal securities may be vulnerable to events adversely affecting its economy, including public health crises (including the occurrence of a contagious disease or illness). The leading sectors of Minnesota’s economy include education and health services, manufacturing, trade, transportation and utilities, professional and business services, finance, insurance and real estate and agriculture, which are vulnerable during general
 
28

 
economic downturns. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
 
how the Portfolio’s performance changed from year to year over ten years; and
 
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
29

You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 1.26%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.33%, 4th quarter, 2022; and Worst Quarter was down -4.96%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
           1 Year        5 Years        10 Years  
Class A*   Return Before Taxes      -11.29%          0.12%          1.29%  
  Return After Taxes on Distributions      -11.40%          0.02%          1.19%  
    Return After Taxes on Distributions and Sale of Portfolio Shares      -5.91%          0.59%          1.55%  
Class C   Return Before Taxes      -10.09%          -0.02%          0.85%  
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
     -8.53%          1.25%          2.13%  
 
*
After-tax Returns:
 
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
30

AB New Jersey Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and State of New Jersey personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
      Class A
Shares
   Class C
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
   3.00%    None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
   None    1.00%(a)
Exchange Fee
   None    None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
      Class A      Class C  
Management Fees
     .45%        .45%  
Distribution and/or Service (12b-1) Fees
     .25%        1.00%  
Other Expenses:
     
Transfer Agent
     .06%        .06%  
Other Expenses(b)
     .51%        .51%  
  
 
 
    
 
 
 
Total Other Expenses
     .57%        .57%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
     1.27%        2.02%  
  
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
     (.45)%        (.45)%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
     .82%        1.57%  
  
 
 
    
 
 
 
   
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .82% and 1.57% of average daily net assets, respectively, for Class A and Class C shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each agreement will be automatically extended for one-year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
31

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
     Class A      Class C  
After 1 Year
  $ 381      $ 260
After 3 Years
  $ 648      $ 590  
After 5 Years
  $ 934      $ 1,047  
After 10 Years
  $ 1,750      $ 2,118  
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 26% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of New Jersey or municipal securities with interest that is otherwise exempt from New Jersey state income tax.
The Portfolio may also invest in:
 
 
forward commitments;
 
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
 
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
 
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 Portfolio 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 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 the 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.
 
 
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 Portfolio’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. The Portfolio’s investments in New Jersey municipal securities may be vulnerable to events adversely affecting its economy, including public health crises (including the occurrence of a contagious disease or illness). New Jersey’s economy is a diverse mix of information technology, transportation and logistics, financial services, major pharmaceuticals, life sciences and advanced manufacturing industries. However, adverse events affecting these industries will
 
32

 
have a negative effect on New Jersey’s economy. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
 
how the Portfolio’s performance changed from year to year over ten years; and
 
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
33

You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.88%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.50%, 4th quarter, 2022; and Worst Quarter was down -5.48%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
           1 Year        5 Years        10 Years  
Class A*   Return Before Taxes      -11.26%          0.61%          1.67%  
  Return After Taxes on Distributions      -11.34%          0.57%          1.63%  
    Return After Taxes on Distributions and Sale of Portfolio Shares      -5.59%          1.15%          1.99%  
Class C   Return Before Taxes      -10.11%          0.46%          1.22%  
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
     -8.53%          1.25%          2.13%  
 
*
After-tax Returns:
 
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
34

AB New York Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and New York State and City income tax that is available without assuming what the Adviser considers to be undue risk to principal or income.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may be required to pay commissions and/or other forms of compensation to a broker for transactions in Advisor Class shares, which are not reflected in the tables or the examples below. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
Class A
Shares
Class C
Shares
Advisor Class
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
3.00% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
None 1.00%(a) None
Exchange Fee
None None None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
Class A Class C Advisor Class
Management Fees
.45% .45% .45%
Distribution and/or Service (12b-1) Fees
.25% 1.00% None
Other Expenses:
Transfer Agent
.04% .04% .04%
Interest Expense
.01% .01% .01%
Other Expenses(b)
.08% .08% .08%
 
 
 
 
 
 
Total Other Expenses
.13% .13% .13%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense Before Waiver
.83% 1.58% .58%
 
 
 
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
(.07)% (.08)% (.07)%
 
 
 
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense After Fee Waiver and/or Expense Reimbursement(d)
.76% 1.50% .51%
 
 
 
 
 
 
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .75%, 1.50% and .50% of average daily net assets, respectively, for Class A, Class C and Advisor Class shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Directors. In addition, each agreement will be automatically extended for one-year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
(d)
If interest expense were excluded, Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement would be as follows:
 
Class A Class C Advisor Class
.75% 1.49% .50%
 
35

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
Class A Class C Advisor Class
After 1 Year
$ 375 $ 253 $ 52
After 3 Years
$ 550 $ 491 $ 179
After 5 Years
$ 740 $ 853 $ 317
After 10 Years
$ 1,288 $ 1,670 $ 719
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 14% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of New York or municipal securities with interest that is otherwise exempt from New York state income tax.
The Portfolio may also invest in:
 
forward commitments;
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
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 Portfolio 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 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 the 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.
 
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 Portfolio’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. The Portfolio’s investments in New York municipal securities may be vulnerable to events adversely affecting its economy, including public health crises (including the occurrence of a contagious disease or illness). New York’s economy, while diverse, has a relatively large share of the nation’s financial activities. With the financial services sector contributing more than one-fifth of the state’s wages, the state’s economy is especially vulnerable to adverse events affecting the financial markets such as those that occurred in 2008-2009 and during the COVID-19 pandemic. In addition, as
 
36

New York’s financial services and professional and business services sectors serve a global market, they can be highly sensitive to global trends. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
how the Portfolio’s performance changed from year to year over ten years; and
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
37

You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.64%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.46%, 4th quarter, 2022; and Worst Quarter was down -5.80%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
1 Year 5 Years 10 Years
Class A* Return Before Taxes -12.74% -0.01% 1.18%
Return After Taxes on Distributions -12.76% -0.02% 1.17%
  Return After Taxes on Distributions and Sale of Portfolio Shares -6.65% 0.59% 1.55%
Class C Return Before Taxes -11.51% -0.13% 0.74%
Advisor Class Return Before Taxes -9.81% 0.86% 1.75%
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
-8.53% 1.25% 2.13%
 
*
After-tax Returns:
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
38

AB Ohio Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and State of Ohio personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
      Class A
Shares
   Class C
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
   3.00%    None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
   None    1.00%(a)
Exchange Fee
   None    None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
      Class A      Class C  
Management Fees
     .45%        .45%  
Distribution and/or Service (12b-1) Fees
     .25%        1.00%  
Other Expenses:
     
Transfer Agent
     .07%        .07%  
Interest Expense
     .01%        .01%  
Other Expenses(b)
     .53%        .54%  
  
 
 
    
 
 
 
Total Other Expenses
     .61%        .62%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense Before Waiver
     1.31%        2.07%  
  
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
     (.50)%        (.51)%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Including Interest Expense After Fee Waiver and/or Expense Reimbursement(d)
     .81%        1.56%  
  
 
 
    
 
 
 
                   
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .80% and 1.55% of average daily net assets, respectively, for Class A and Class C shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each agreement will be automatically extended for one-year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
(d)
If interest expense were excluded, Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement would be as follows:
 
Class A     Class C      
  .80%       1.55%    
 
39

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
        Class A        Class C  
After 1 Year
     $ 380        $ 259
After 3 Years
     $ 655        $ 600  
After 5 Years
     $ 950        $ 1,067  
After 10 Years
     $ 1,789        $ 2,164  
 
*
If you did not redeem your shares at the end of the period, your expenses would be decreased by approximately $100.
Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys or sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These transaction costs, which are not reflected in the Annual Portfolio Operating Expenses or in the Examples, affect the Portfolio’s performance. During the most recent fiscal year, the Portfolio’s portfolio turnover rate was 12% of the average value of its portfolio.
PRINCIPAL STRATEGIES:
The Portfolio pursues its objective by investing principally in high-yielding, predominantly investment grade municipal securities. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net 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 (“AMT”) for certain taxpayers. As a matter of fundamental policy, the Portfolio invests, under normal circumstances, at least 80% of its net assets in municipal securities of Ohio or municipal securities with interest that is otherwise exempt from Ohio state income tax.
The Portfolio may also invest in:
 
 
forward commitments;
 
 
zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and
 
 
derivatives, such as options, futures contracts, forwards and swaps.
PRINCIPAL RISKS:
 
Market Risk: The value of the Portfolio’s assets will fluctuate as the bond market fluctuates. The value of the Portfolio’s 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) and regional and global conflicts, that affect large portions of the market.
 
 
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 Portfolio 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 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 the 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.
 
 
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 Portfolio’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. The Portfolio’s investments in Ohio municipal securities may be vulnerable to events adversely affecting its economy, including public health crises (including the occurrence of a contagious disease or illness). Although manufacturing (including auto-related manufacturing) in Ohio remains an integral part of the State’s economy, the greatest growth in Ohio’s economy in recent years has been in the non-manufacturing sectors, including the trade,
 
40

 
transportation and public utilities, educational and health services, government and professional and business services sectors. However, adverse economic conditions can adversely affect the state’s economy and employment rates. The Portfolio’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 municipal securities issued by Puerto Rico and its government agencies and municipalities may have more risks than those of other U.S. issuers of municipal securities. Puerto Rico continues to face a challenging economic and fiscal environment. 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.
 
 
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 Portfolio’s assets can decline as can the value of the Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities.
 
 
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. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.
 
 
Tax Risk: There is no guarantee that the income on the Portfolio’s municipal securities will be exempt from regular federal, and if applicable, state income taxes. 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 Portfolio by increasing taxes on that income. In such event, the Portfolio’s net asset value, or 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 Portfolio shares as investors anticipate adverse effects on the Portfolio or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolio would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolio’s yield.
 
 
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 Portfolio. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. 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.
 
 
Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolio. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying asset, reference rate or index, which could cause the Portfolio 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 Portfolio.
 
 
Management Risk: The Portfolio 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.
As with all investments, you may lose money by investing in the Portfolio.
BAR CHART AND PERFORMANCE INFORMATION:
The bar chart and performance information provide an indication of the historical risk of an investment in the Portfolio by showing:
 
 
how the Portfolio’s performance changed from year to year over ten years; and
 
 
how the Portfolio’s average annual returns for one, five and ten years compare to those of a broad-based securities market index.
 
41

You may obtain updated performance information on the Portfolio’s website at www.abfunds.com (click on “Investments—Mutual Funds”).
The Portfolio’s past performance before and after taxes, of course, does not necessarily indicate how it will perform in the future.
Bar Chart
The annual returns in the bar chart are for the Portfolio’s Class A shares and do not reflect sales loads. If sales loads were reflected, returns would be less than those shown. Through June 30, 2023, the year-to-date unannualized return for Class A shares was 2.04%.
 
 
LOGO
During the period shown in the bar chart, the Portfolio’s:
Best Quarter was up 3.24%, 4th quarter, 2022; and Worst Quarter was down -5.17%, 1st quarter, 2022.
Performance Table
Average Annual Total Returns
(For the periods ended December 31, 2022)
 
           1 Year        5 Years        10 Years  
Class A*   Return Before Taxes      -11.99%          0.22%          1.18%  
  Return After Taxes on Distributions      -12.02%          0.20%          1.15%  
    Return After Taxes on Distributions and Sale of Portfolio Shares      -6.17%          0.79%          1.54%  
Class C   Return Before Taxes      -10.74%          0.07%          0.75%  
Bloomberg Municipal Bond Index
(reflects no deduction for fees, expenses or taxes)
     -8.53%          1.25%          2.13%  
 
*
After-tax Returns:
 
 
Are shown for Class A shares only and will vary for the other Classes of shares because these Classes have different expense ratios;
 
 
Are an estimate, which is based on the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor’s tax situation and are likely to differ from those shown; and
 
 
Are not relevant to investors who hold Portfolio shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
INVESTMENT ADVISER:
AllianceBernstein L.P. is the investment adviser for the Portfolio.
PORTFOLIO MANAGERS:
The following table lists the persons responsible for day-to-day management of the Portfolio’s portfolio:
 
Employee    Length of Service    Title
Daryl Clements    Since 2022    Senior Vice President of the Adviser
Matthew J. Norton    Since 2016    Senior Vice President of the Adviser
Andrew D. Potter    Since 2018    Vice President of the Adviser
ADDITIONAL INFORMATION
For important information about the purchase and sale of Portfolio shares, tax information and financial intermediary compensation, please turn to ADDITIONAL INFORMATION ABOUT PURCHASE AND SALE OF PORTFOLIO SHARES, TAXES AND FINANCIAL INTERMEDIARIES, page 51 in this Prospectus.
 
42

AB Pennsylvania Portfolio
 
 
INVESTMENT OBJECTIVE:
The investment objective of the Portfolio is to earn the highest level of current income exempt from both federal income tax and Commonwealth of Pennsylvania personal income tax that is available without assuming what the Adviser considers to be undue risk.
FEES AND EXPENSES OF THE PORTFOLIO:
This table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Portfolio. You may qualify for sales charge reductions if you and members of your family invest, or agree to invest in the future, at least $100,000 in AB Mutual Funds. More information about these and other discounts is available from your financial intermediary and in Investing in the Portfolios—Sales Charge Reduction Programs for Class A Shares on page 64 of this Prospectus, in Appendix B—Financial Intermediary Waivers of this Prospectus and in Purchase of Shares—Sales Charge Reduction Programs for Class A Shares on page 152 of the Portfolio’s Statement of Additional Information (“SAI”).
Shareholder Fees (fees paid directly from your investment)
 
      Class A
Shares
   Class C
Shares
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
   3.00%    None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption proceeds, whichever is lower)
   None    1.00%(a)
Exchange Fee
   None    None
Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
 
      Class A      Class C  
Management Fees
     .45%        .45%  
Distribution and/or Service (12b-1) Fees
     .25%        1.00%  
Other Expenses:
     
Transfer Agent
     .07%        .07%  
Other Expenses(b)
     .58%        .58%  
  
 
 
    
 
 
 
Total Other Expenses
     .65%        .65%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses Before Waiver
     1.35%        2.10%  
  
 
 
    
 
 
 
Fee Waiver and/or Expense Reimbursement(c)
     (.50)%        (.50)%  
  
 
 
    
 
 
 
Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement
     .85%        1.60%  
  
 
 
    
 
 
 
                   
 
(a)
For Class C shares, the contingent deferred sales charge, or CDSC, is 0% after the first year. Class C shares automatically convert to Class A shares after eight years.
 
(b)
“Other Expenses” includes acquired fund fees and expenses totaling less than .01%.
 
(c)
The Adviser has contractually agreed to waive its management fees and/or to bear certain expenses of the Portfolio to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Funds in which the Portfolio may invest, interest expense, and extraordinary expenses), on an annualized basis, from exceeding .85% and 1.60% of average daily net assets, respectively, for Class A and Class C shares. In addition to that agreement, in connection with the Portfolio’s investments in AB Government Money Market Portfolio (the “Money Market Portfolio”) (except for the investment of any cash collateral from securities lending), the Adviser has contractually agreed to waive its management fee from the Portfolio and/or reimburse other expenses of the Portfolio in an amount equal to the Portfolio’s pro rata share of the Money Market Portfolio’s effective management fee. Each of the agreements will remain in effect until September 30, 2024 and may only be terminated or changed with the consent of the Portfolio’s Board of Trustees. In addition, each agreement will be automatically extended for one-year terms unless the Adviser provides notice of termination to the Portfolio at least 60 days prior to the end of the period.
 
43

Examples
The Examples are intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The Examples assume that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Portfolio’s operating expenses stay the same and that any fee waiver and/or expense limitation remains in effect for only the first year. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
        Class A        Class C  
After 1 Year
     $ 384        $ 263
After 3 Years
     $ 667        $ 610  
After 5 Years
     $ 971        $ 1,083  
After 10 Years
     $ 1,833        $ 2,199