# EDGAR Filing Document

**Accession Number:** 0001496608
**File Stem:** 0001193125-23-022900
**Filing Date:** 2023-2
**Character Count:** 258083
**Document Hash:** 5feb760b71271e965b5727e98c42b845
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-022900.hdr.sgml**: 20230202

**ACCESSION NUMBER**: 0001193125-23-022900

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 19

**CONFORMED PERIOD OF REPORT**: 20221130

**FILED AS OF DATE**: 20230202

**DATE AS OF CHANGE**: 20230202

**EFFECTIVENESS DATE**: 20230202

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AB Active ETFs, Inc.
- **CENTRAL INDEX KEY:** 0001496608
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 0531

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-23799
- **FILM NUMBER:** 23582447

**BUSINESS ADDRESS:**
- **STREET 1:** C/O ALLIANCEBERNSTEIN L.P.
- **STREET 2:** 1345 AVENUE OF THE AMERICAS
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10145
- **BUSINESS PHONE:** 212-969-1000

**MAIL ADDRESS:**
- **STREET 1:** C/O ALLIANCEBERNSTEIN L.P.
- **STREET 2:** 1345 AVENUE OF THE AMERICAS
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10145

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AllianceBernstein Active ETFs, Inc.
- **DATE OF NAME CHANGE:** 20100714

## Series and Classes Contracts Data

### AB Tax-Aware Short Duration Municipal ETF (Series ID: S000076879)

| Class ID   | Class Name                                | Ticker Symbol   |
|:---|:---|:---|
| C000237018 | AB Tax-Aware Short Duration Municipal ETF | TAFI            |

### AB Ultra Short Income ETF (Series ID: S000076880)

| Class ID   | Class Name                | Ticker Symbol   |
|:---|:---|:---|
| C000237019 | AB Ultra Short Income ETF | YEAR            |

------

------

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549** 

------

**FORM N-CSR** 

------

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED** 

**MANAGEMENT INVESTMENT COMPANIES** 

**Investment Company Act file number: 812-13797** 

------

## AB ACTIVE ETFs, INC.
**(Exact name of registrant as specified in charter)** 

------

**1345 Avenue of the Americas, New York, New York 10105** 

**(Address of principal executive offices) (Zip code)** 

------

**Joseph J. Mantineo** 

**AllianceBernstein L.P.** 

**1345 Avenue of the Americas** 

**New York, New York 10105** 

**(Name and address of agent for service)** 

------

**Registrant's telephone number, including area code: (800) 221-5672** 

**Date of fiscal year end: November 30, 2022** 

**Date of reporting period: November 30, 2022** 

------

---

| | |
|:---|:---|
| **ITEM 1.** | **REPORTS TO STOCKHOLDERS.**  |

---

------

**NOV** <sup>11.30.22</sup>

![LOGO](g412809g43p34.jpg)

ANNUAL REPORT

## AB TAX-AWARE SHORT DURATION MUNICIPAL ETF

## (NYSE: TAFI)
![LOGO](g412809covart_7682.jpg)

------

A discussion of the Fund's investment performance is not included in this report. AllianceBernstein L.P. would like to thank you for your interest in the Fund.

 <br> Investment Products Offered   <u> • Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed</u>

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

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

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

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

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

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

------

---

| | |
|:---|:---|
| **FROM THE PRESIDENT** | ![LOGO](g412809g92f19.jpg) |

---

Dear Shareholder,

We're pleased to provide this report for the AB Tax-Aware Short Duration Municipal ETF.

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

<sup>+</sup> Fostering diverse perspectives that give us a distinctive approach to navigating global capital markets

<sup>+</sup> Applying differentiated investment insights through a connected global research network

<sup>+</sup> Embracing innovation to design better ways to invest and leading-edge solutions

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

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

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

Sincerely,

![LOGO](g412809g55d83.jpg)

Onur Erzan

President and Chief Executive Officer, AB ETFs

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 1** |

---

------

**EXPENSE EXAMPLE** 

(unaudited)

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

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

**Actual Expenses** 

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

**Hypothetical Example for Comparison Purposes** 

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

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

---

| | |
|:---|:---|
| **2 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**EXPENSE EXAMPLE** (continued)

(unaudited)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Beginning<br>Account Value<br>June 1, 2022** | **Ending<br>Account Value<br>November 30, 2022** | **Expenses<br>Paid During<br>Period\*** |  | **Annualized<br>Expense<br>Ratio\*** |  |
|  Actual | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1002.20 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.58 | \*\* | 0.27 | %\*\* |
|  Hypothetical\*\*\* | $1000 | $1023.71 | $1.37 |  | 0.27 | % |

---

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

\*\* Expenses paid are based on the period from September 14, 2022 (commencement of operations) and are equal to the class's annualized expense ratio, multiplied by the average account value over the period, multiplied by 78/365 (to reflect the since inception period).

\*\*\* Assumes 5% annual return before expenses. 

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 3** |

---

------

**PORTFOLIO SUMMARY** 

**November 30, 2022** (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $47.5

------

![LOGO](g412809g00a10.jpg)

------

![LOGO](g412809g00b10.jpg)

---

| | |
|:---|:---|
| 1 | The Fund's quality rating and state breakdowns are expressed as a percentage of the Fund's total investments in municipal securities and may vary over time. The Fund also enters into derivative transactions, which may be used for hedging or investment purposes (see "Portfolio of Investments" section of the report for additional details). The quality ratings are determined by using the S&P Global Ratings ("S&P"), Moody's Investors Services, Inc. ("Moody's") and Fitch Ratings, Ltd. ("Fitch"). The Fund considers the credit ratings issued by S&P, Moody's and Fitch and uses the highest rating issued by the agencies. These ratings are a measure of the quality and safety of a bond or portfolio, based on the issuer's financial condition. AAA is the highest (best) and D is the lowest (worst). If applicable, the Pre-refunded category includes bonds which are secured by U.S. Government securities and therefore are deemed high-quality investment grade by the Adviser. If applicable, Not Applicable (N/A) includes non-creditworthy investments, such as, equities, currency contracts, futures and options. If applicable, the Not Rated category includes bonds that are not rated by a nationally recognized statistical rating organization. The Adviser evaluates the creditworthiness of non-rated securities based on a number of factors including, but not limited to, cash flows, enterprise value and economic environment.  |

---

---

| | |
|:---|:---|
| 2 | "Other" represents less than 2.7% in 11 different states, District of Columbia and Puerto Rico.  |

---

---

| | |
|:---|:---|
| **4 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** 

**November 30, 2022** 

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **MUNICIPAL OBLIGATIONS – 93.4%** |  |  |
|  **Long-Term Municipal Bonds – 90.5%** |  |  |
|  **Alabama – 3.5%** |  |  |
|  Black Belt Energy Gas District <br>(Royal Bank of Canada)<br>Series 2022-D <br>4.00%, 12/01/2025 | $650 | $655238 |
|  Southeast Energy Authority A Cooperative District <br>(Goldman Sachs Group, Inc. (The))<br>Series 2022-B <br>5.00%, 05/01/2053 | 1000 | 1026383 |
|  |  | 1681621 |
|  **California – 7.1%** |  |  |
|  City of Los Angeles Department of Airports <br>Series 2022 <br>5.00%, 05/15/2025 | 475 | 495809 |
|  State of California <br>Series 2022 <br>5.00%, 09/01/2026 | 1000 | 1087873 |
|  Sweetwater Union High School District<br>BAM Series 2014 <br>5.00%, 08/01/2026 | 1075 | 1113240 |
|  Washington Township Health Care District <br>Series 2020-A <br>5.00%, 07/01/2031 | 650 | 694430 |
|  |  | 3391352 |
|  **Colorado – 4.1%** |  |  |
|  Arapahoe County School District No 5 Cherry Creek<br>AGM Series 2004 <br>2.00%, 12/15/2023 | 1225 | 1217915 |
|  City & County of Denver Co. Airport System Revenue <br>Series 2020-B <br>5.00%, 11/15/2031 | 700 | 734569 |
|  |  | 1952484 |
|  **District of Columbia – 1.0%** |  |  |
|  Metropolitan Washington Airports Authority Aviation Revenue <br>Series 2017 <br>5.00%, 10/01/2026 | 465 | 492194 |
|  **Florida – 10.7%** |  |  |
|  City of Jacksonville FL <br>(Genesis Health, Inc. Obligated Group)<br>Series 2017 <br>5.00%, 11/01/2026 | 600 | 630583 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 5** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  County of Broward FL Airport System Revenue <br>Series 2013-A <br>5.125%, 10/01/2038 (Pre-refunded/ETM) | $1500 | $1528612 |
|  County of Broward FL Airport System Revenue <br>(Fort Lauderdale Hollywood Intl Airport)<br>Series 2015-A <br>5.00%, 10/01/2025 | 930 | 969810 |
|  County of Miami-Dade Seaport Department <br>Series 2013-D <br>6.00%, 10/01/2025 (Pre-refunded/ETM) | 700 | 718225 |
|  Orange County School Board <br>(Orange County School Board COP)<br>Series 2016-B <br>5.00%, 08/01/2026 | 1155 | 1244368 |
|  |  | 5091598 |
|  **Georgia – 3.6%** |  |  |
|  Augusta Development Authority <br>(AU Health System Obligated Group)<br>Series 2018 <br>5.00%, 07/01/2025 | 200 | 199118 |
|  City of Atlanta GA Department of Aviation <br>Series 2019-B <br>5.00%, 07/01/2031 | 870 | 939328 |
|  Municipal Electric Authority of Georgia <br>Series 2020 <br>5.00%, 01/01/2029 | 500 | 546775 |
|  |  | 1685221 |
|  **Illinois – 5.9%** |  |  |
|  Northern Illinois University<br>BAM Series 2020-B <br>5.00%, 04/01/2031 | 725 | 781797 |
|  Sangamon County School District No 186 Springfield<br>AGM Series 2020-B <br>5.00%, 02/01/2032 | 690 | 756772 |
|  State of Illinois <br>Series 2019-A <br>5.00%, 11/01/2029 | 685 | 724061 |
|  State of Illinois Sales Tax Revenue <br>Series 2021-A <br>4.00%, 06/15/2028 | 535 | 541846 |
|  |  | 2804476 |
|  **Indiana – 0.9%** |  |  |
|  Indiana Finance Authority <br>(Ohio Valley Electric Corp.)<br>Series 2020 <br>3.00%, 11/01/2030 | 500 | 444948 |

---

---

| | |
|:---|:---|
| **6 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **Iowa – 1.1%** |  |  |
|  Iowa Finance Authority <br>(Iowa Health System Obligated Group)<br>Series 2018-B <br>5.00%, 02/15/2025 | $500 | $520123 |
|  **Louisiana – 1.5%** |  |  |
|  Louisiana Local Government Environmental Facilities & Community Development Auth <br>(Louisiana Insurance Guaranty Association)<br>Series 2022 <br>5.00%, 08/15/2029 | 665 | 716011 |
|  **Maryland – 1.4%** |  |  |
|  State of Maryland <br>Series 2019-A <br>5.00%, 08/01/2026 | 625 | 677218 |
|  **Massachusetts – 4.5%** |  |  |
|  Massachusetts Development Finance Agency <br>(Beth Israel Lahey Health Obligated Group)<br>Series 2019 <br>5.00%, 07/01/2031 | 870 | 944099 |
|  Massachusetts Port Authority <br>Series 2017-A <br>5.00%, 07/01/2027 | 1120 | 1190084 |
|  |  | 2134183 |
|  **Michigan – 5.7%** |  |  |
|  Great Lakes Water Authority Water Supply System Revenue <br>Series 2018-A <br>5.00%, 07/01/2024 | 450 | 466387 |
|  Michigan Finance Authority <br>(Great Lakes Water Authority Sewage Disposal System Revenue)<br>AGM Series 2014 <br>5.00%, 07/01/2026 | 1190 | 1231459 |
|  Michigan State Building Authority <br>(Michigan State Building Authority Lease)<br>Series 2013-I <br>5.00%, 10/15/2029 | 1000 | 1018041 |
|  |  | 2715887 |
|  **Missouri – 1.6%** |  |  |
|  County of St Louis MO <br>(County of St Louis MO Lease)<br>Series 2020-A <br>4.00%, 12/01/2030 | 720 | 754482 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 7** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **New Jersey – 3.9%** |  |  |
|  Garden State Preservation Trust<br>AGM Series 2005-A <br>5.75%, 11/01/2028 | $500 | $549299 |
|  New Jersey Economic Development Authority <br>(New Jersey Economic Development Authority State Lease)<br>Series 2021-G <br>5.25%, 09/01/2023<sup>(a)</sup> | 1000 | 1018073 |
|  New Jersey Transportation Trust Fund Authority <br>(New Jersey Transportation Trust Fund Authority State Lease)<br>Series 2019 <br>5.00%, 06/15/2030 | 250 | 271846 |
|  |  | 1839218 |
|  **New Mexico – 2.3%** |  |  |
|  New Mexico Finance Authority <br>(State of New Mexico Department of Transportation)<br>Series 2022-A <br>5.00%, 06/15/2026 | 1000 | 1077063 |
|  **New York – 9.9%** |  |  |
|  City of New York NY <br>Series 2014-A <br>5.00%, 08/01/2024 | 1000 | 1039718 |
|  Metropolitan Transportation Authority <br>Series 2013-E <br>5.00%, 11/15/2023 | 500 | 507516 |
| &nbsp;&nbsp;&nbsp;&nbsp; Series 2017-C <br>5.00%, 11/15/2025 | 530 | 551396 |
|  Nassau Health Care Corp. <br>Series 2021 <br>5.00%, 08/01/2024 | 865 | 895341 |
|  New York Convention Center Development Corp. <br>(New York City Hotel Unit Fee Revenue Hotel Occupancy Tax)<br>Series 2015 <br>5.00%, 11/15/2023 | 655 | 668545 |
|  Port Authority of New York & New Jersey <br>Series 2014 <br>5.00%, 09/01/2031 | 1000 | 1020584 |
|  |  | 4683100 |

---

---

| | |
|:---|:---|
| **8 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **North Carolina – 2.1%** |  |  |
|  Durham County Industrial Facilities & Pollution Control Financing Authority <br>(Research Triangle Institute)<br>Series 2022 <br>1.90%, 09/01/2037<sup>(b)</sup> | $1000 | $1000000 |
|  **Pennsylvania – 2.1%** |  |  |
|  City of Philadelphia PA Airport Revenue <br>Series 2021 <br>5.00%, 07/01/2025 | 945 | 980298 |
|  **Puerto Rico – 0.2%** |  |  |
|  Commonwealth of Puerto Rico <br>Series 2021-A <br>5.625%, 07/01/2027 | 108 | 110484 |
|  **Texas – 5.3%** |  |  |
|  La Joya Independent School District <br>Series 2013 <br>5.00%, 02/15/2028 | 1355 | 1484132 |
|  Texas Transportation Commission State Highway Fund <br>Series 2015 <br>5.00%, 10/01/2023 | 1000 | 1023048 |
|  |  | 2507180 |
|  **Utah – 3.4%** |  |  |
|  Utah Board of Higher Education<br>NATL Series 1998 <br>5.50%, 04/01/2029 | 1440 | 1598435 |
|  **Virginia – 2.5%** |  |  |
|  Virginia Commonwealth Transportation Board <br>(Virginia Commonwealth Transportation Board State Lease)<br>Series 2017-A <br>5.00%, 05/15/2027 | 1100 | 1208004 |
|  **Washington – 3.2%** |  |  |
|  Washington Economic Development Finance Authority <br>(Mura Cascade ELP LLC)<br>Series 2022 <br>3.90%, 12/01/2042<sup>(a)(c)</sup> | 1000 | 1001433 |
|  Washington State Housing Finance Commission <br>(Traditions at South Hill LLC)<br>Series 2014 <br>1.89%, 08/01/2044<sup>(b)</sup> | 500 | 500000 |
|  |  | 1501433 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 9** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | |
|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **Wisconsin – 3.0%** |  |  |
|  City of Milwaukee WI Sewerage System Revenue <br>Series 2016-S <br>4.00%, 06/01/2028 | $350 | $353930 |
|  Wisconsin Public Finance Authority <br>(Southeastern Regional Medical Center Obligated Group)<br>Series 2022 <br>5.00%, 02/01/2030 | 1000 | 1071790 |
|  |  | 1425720 |
|  Total Long-Term Municipal Bonds <br>(cost $42,823,640)<br>|  | 42992733 |
|  **Short-Term Municipal Notes – 2.9%** |  |  |
|  **Illinois – 1.6%** |  |  |
|  Illinois Housing Development Authority <br>(Steadfast Foxview LP)<br>Series 2008 <br>1.86%, 01/01/2041<sup>(b)</sup> | 730 | 730000 |
|  **Louisiana – 0.4%** |  |  |
|  Louisiana Public Facilities Authority <br>(ANF Partners #1 LP)<br>Series 2006 <br>1.86%, 04/01/2036<sup>(b)</sup> | 200 | 200000 |
|  **Minnesota – 0.5%** |  |  |
|  City of Minneapolis MN/St. Paul Housing & Redevelopment Authority <br>(Allina Health Obligated Group)<br>Series 2008 <br>1.89%, 11/15/2034<sup>(b)</sup> | 250 | 250000 |
|  **Tennessee – 0.4%** |  |  |
|  Greeneville Health & Educational Facilities Board <br>(Ballad Health Obligated Group)<br>Series 2018-B <br>1.90%, 07/01/2045<sup>(b)</sup> | 200 | 200000 |
|  Total Short-Term Municipal Notes <br>(cost $1,380,000)<br>|  | 1380000 |
|  Total Municipal Obligations <br>(cost $44,203,640)<br>|  | 44372733 |

---

---

| | |
|:---|:---|
| **10 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | **Principal<br>Amount<br>(000)** | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **CORPORATES - INVESTMENT GRADE – 5.2%** |  |  |  |
|  **Financial Institutions – 5.2%** |  |  |  |
|  **Banking – 3.1%** |  |  |  |
|  Barclays PLC <br>4.338%, 05/16/2024 | $| 490 | $485536 |
|  HSBC Holdings PLC <br>3.95%, 05/18/2024 |  | 499 | 493027 |
|  Societe Generale SA <br>5.00%, 01/17/2024<sup>(a)</sup> |  | 250 | 246413 |
|  Standard Chartered PLC <br>7.776%, 11/16/2025<sup>(a)</sup> |  | 250 | 257850 |
|  |  |  | 1482826 |
|  **Finance – 1.3%** |  |  |  |
|  Aircastle Ltd. <br>4.125%, 05/01/2024 |  | 380 | 366400 |
|  Aviation Capital Group LLC <br>1.95%, 01/30/2026<sup>(a)</sup> |  | 290 | 253480 |
|  |  |  | 619880 |
|  **REITs – 0.8%** |  |  |  |
|  GLP Capital LP/GLP Financing II, Inc. <br>5.375%, 11/01/2023 |  | 370 | 366651 |
|  Total Corporates - Investment Grade <br>(cost $2,474,576)<br>|  |  | 2469357 |
|  **U.S. TREASURY BILLS – 2.0%** |  |  |  |
|  U.S. Treasury Bill <br>Zero Coupon, 11/02/2023<br>(cost $957,393) |  | 1000 | 958046 |
|  | **Shares** | **Shares** |  |
|  **SHORT-TERM INVESTMENTS – 0.1%** | **SHORT-TERM INVESTMENTS – 0.1%** | **SHORT-TERM INVESTMENTS – 0.1%** | **SHORT-TERM INVESTMENTS – 0.1%** |
|  **Investment Companies – 0.1%** |  |  |  |
|  AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB,<br>3.50%<sup>(d)(e)(f)</sup><br>(cost $19,826) |  | 19826 | 19826 |
|  **Total Investments – 100.7%**<br> (cost $47,655,435) |  |  | 47819962 |
|  Other assets less liabilities – (0.7)% |  |  | (327971) |
|  **Net Assets – 100.0%** |  |  | $**47491991** |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 11** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

**CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)** 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **Rate Type** | **Rate Type** | | | | |
| **Notional<br>Amount<br>(000)** | **Notional<br>Amount<br>(000)** |<br>**Termination<br>Date** | **Payments<br>made<br>by the<br>Fund** | **Payments<br>received<br>by the<br>Fund** | <br>**Payment<br>Frequency<br>Paid/<br>Received** |<br>**Market<br>Value** |<br>**Upfront<br>Premiums<br>Paid/<br>(Received)** |<br>**Unrealized<br>Appreciation<br>(Depreciation)** |
| USD | 600 | 08/31/2027 | 3.408% | 1 Day<br>SOFR | Annual | $5062 | $– 0 | $5062 |
| USD | 530 | 08/31/2027 | 3.756% | 1 Day<br>SOFR | Annual | (3625) | – 0 | (3625) |
| USD | 420 | 04/15/2032 | 3.852% | 1 Day<br>SOFR | Annual | (15677) | – 0 | (15677) |
|  |  |  |  |  |  | $&nbsp;&nbsp;&nbsp;&nbsp;(14240) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– 0 | $&nbsp;&nbsp;&nbsp;&nbsp;(14240) |

---

(a) Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are
considered restricted, but liquid and may be resold in transactions exempt from registration. At November 30, 2022, the aggregate market value of these securities amounted to $2,777,249 or 5.8% of net assets.

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

(c) When-Issued or delayed delivery security.

(d) Affiliated investments.

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

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

As of November 30, 2022, the Fund's percentages of investments in municipal bonds that are insured and in insured municipal bonds that have been pre-refunded or escrowed to maturity are 16.3% and 0.0%, respectively.

Glossary:

AGM – Assured Guaranty Municipal

BAM – Build American Mutual

COP – Certificate of Participation

ETM – Escrowed to Maturity

NATL – National Interstate Corporation

REIT – Real Estate Investment Trust

SOFR – Secured Overnight Financing Rate

See notes to financial statements.

---

| | |
|:---|:---|
| **12 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**STATEMENT OF ASSETS & LIABILITIES** 

**November 30, 2022** 

---

| | |
|:---|:---|
| **Assets** | **Assets** |
|  Investments in securities, at value |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Unaffiliated issuers (cost $47,635,609) | $47800136 |
| &nbsp;&nbsp;&nbsp;&nbsp; Affiliated issuers (cost $19,826) | 19826 |
|  Cash | 5294 |
|  Cash collateral due from broker | 52631 |
|  Receivable for shares sold | 3744705 |
|  Interest receivable | 519715 |
| Affiliated dividends receivable | 812 |
|  Total assets | 52143119 |
| **Liabilities** |  |
|  Payable for investment securities purchased | 4637303 |
|  Advisory fee payable | 7824 |
|  Payable for variation margin on centrally cleared swaps | 6001 |
|  Total liabilities | 4651128 |
|  Net Assets | $**47491991** |
| **Composition of Net Assets** |  |
|  Paid-in capital | $47300705 |
|  Distributable earnings | 191286 |
|  **Net Assets** | $**47491991** |
|  **Net Asset Value Per Share**—unlimited shares authorized, No par value (based on 1,902,000 shares outstanding) | $**24.97** |

---

See notes to financial statements.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 13** |

---

------

**STATEMENT OF OPERATIONS** 

**For the Period from September 14, 2022<sup>(a)</sup> to November 30, 2022** 

---

| | | |
|:---|:---|:---|
| **Investment Income** |  |  |
|  Interest | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;203045 |  |
|  Dividends—Affiliated issuers | 2622 | $205667 |
| **Expenses** |  |  |
|  Advisory fee (see Note B) | 17053 |  |
|  Total expenses | 17053 |  |
|  Less: expenses waived and reimbursed by the Adviser<br>(see Note B) | (108) |  |
|  Net expenses |  | 16945 |
|  Net investment income |  | 188722 |
| **Realized and Unrealized Gain (Loss) on Investment Transactions** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment transactions |  | (49487) |
|  Net change in unrealized appreciation (depreciation) of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments |  | 164527 |
| &nbsp;&nbsp;&nbsp;&nbsp; Swaps |  | (14240) |
|  Net gain on investment transactions |  | 100800 |
|  **Net Increase in Net Assets from Operations** |  | $**289522** |

---

(a) Commencement of operations.

See notes to financial statements.

---

| | |
|:---|:---|
| **14 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**STATEMENT OF CHANGES IN NET ASSETS** 

---

| | |
|:---|:---|
|  | **September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022** |
| **Increase (Decrease) in Net Assets from Operations** | **Increase (Decrease) in Net Assets from Operations** |
|  Net investment income | $188722 |
|  Net realized loss on investment transactions | (49487) |
|  Net change in unrealized appreciation (depreciation) of investments | 150287 |
|  Net increase in net assets from operations | 289522 |
|  Distribution to Shareholders | (98236) |
| **Transactions in Shares of the Fund** |  |
|  Net increase (decrease) | 47294650 |
|  Other capital | 6055 |
|  Total increase | 47491991 |
| **Net Assets** | **Net Assets** |
|  Beginning of period | – 0 |
|  End of period | $**47491991** |

---

(a) Commencement of operations.

See notes to financial statements.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 15** |

---

------

**NOTES TO FINANCIAL STATEMENTS** 

**November 30, 2022** 

**NOTE A** 

**Significant Accounting Policies** 

The AB Active ETFs, Inc. (the "Corporation") is registered under the Investment Company Act of 1940 as an open-end management investment company. The Corporation, which is a Maryland corporation, operates as a series company comprised of two funds currently in operation. Each fund is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB Tax-Aware Short Duration Municipal ETF (the "Fund"). The Fund commenced investment operations on September 14, 2022. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

**1. Security Valuation** 

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

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter ("OTC") market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of

---

| | |
|:---|:---|
| **16 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the "Committee") must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open-end mutual funds are valued at the closing net asset value per share, while exchange-traded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

**2. Fair Value Measurements** 

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 17** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund's own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1—quoted prices in active markets for identical investments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value
of investments)

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

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

---

| | |
|:---|:---|
| **18 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

The following table summarizes the valuation of the Fund's investments by the above fair value hierarchy levels as of November 30, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investments in<br>Securities:** | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  **Assets:** |  |  |  |  |
|  Long-Term Municipal Bonds | $– 0 | $42992733 | $– 0 | $42992733 |
|  Short-Term Municipal Notes | – 0 | 1380000 | – 0 | 1380000 |
|  Corporates—Investment Grade | – 0 | 2469357 | – 0 | 2469357 |
|  U.S. Treasury Bills | – 0 | 958046 | – 0 | 958046 |
|  Short-Term Investments | 19826 | – 0 | – 0 | 19826 |
|  Total Investments in Securities | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19826 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47800136 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– 0 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47819962 |
|  **Other Financial Instruments<sup>(a)</sup>:** |  |  |  |  |
|  **Assets:** |  |  |  |  |
|  Centrally Cleared Interest Rate Swaps | – 0 | 5062 | – 0 | 5062 <sup>(b)</sup> |
|  **Liabilities:** |  |  |  |  |
|  Centrally Cleared Interest Rate Swaps | – 0 | (19302) | – 0 | (19302)<sup>(b)</sup> |
|  **Total** | $**19826** | $**47785896** | $**– 0** | $**47805722** |

---

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

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

**3. Currency Translation** 

Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange contracts are translated into U.S. dollars at the mean of the quoted bid and ask prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued.

Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 19** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of foreign currency denominated assets and liabilities.

**4. Taxes** 

It is Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund's tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current tax year) and has concluded that no provision for income tax is required in the Fund's financial statements.

**5. Offering Expenses** 

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

**6. Investment Income and Investment Transactions** 

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

**7. Dividends and Distributions** 

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these

---

| | |
|:---|:---|
| **20 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

**NOTE B** 

**Advisory Fee and Other Transactions with Affiliates** 

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

Under the investment advisory agreement, in accordance with the unitary fee structure, the Adviser bears the cost of various third-party services required by the Fund, including audit, custodial, accounting, certain legal and transfer agency costs. Also under the investment advisory agreement, the Adviser will reimburse the Fund for the Fund's share of the acquired funds fees and expenses (advisory fees and other expenses) of any pooled investment vehicle for which the Adviser serves as investment adviser. For the period ended November 30, 2022, such waiver/reimbursements relating to the Fund's investment in AB Government Money Market Portfolio amounted to $108.

A summary of the Fund's transactions in AB mutual funds for the period ended November 30, 2022 is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | **Market Value<br>11/30/21<br>(000)** | **Purchases<br>at Cost<br>(000)** | **Sales<br>Proceeds<br>(000)** | **Market Value<br>11/30/22<br>(000)** | **Dividend<br>Income<br>(000)** |
|  Government Money Market Portfolio | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– 0 – $| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8020 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3 |

---

**NOTE C** 

**Distribution Plan** 

The Fund has adopted a Distribution and Service Plan (the "Plan") pursuant to Rule 12b-1 of the Act which permits the Fund to pay distribution and servicing fees not to exceed .25% per year of each Fund's average daily net assets. No such fees are currently paid.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 21** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

**NOTE D** 

**Investment Transactions** 

Purchases and sales of investment securities (excluding short-term investments and in-kind purchases and sales) for the period ended November 30, 2022 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Purchases** | **Sales** |
|  Investment securities (excluding U.S. government securities) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41580108 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3489766 |
|  U.S. government securities | – 0 | – 0 |

---

For the period ended November 30, 2022, the Fund had in-kind purchases and sales as follows:

---

| | | |
|:---|:---|:---|
|  | **Purchases** | **Sales** |
|  In-kind transactions | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4729409 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– 0 |

---

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

---

| | |
|:---|:---|
|  Cost | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47655435 |
|  Gross unrealized appreciation | $282486 |
|  Gross unrealized depreciation | (131571) |
|  Net unrealized appreciation | $150915 |

---

**1. Derivative Financial Instruments** 

The Fund may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, "investment purposes"), or to hedge or adjust the risk profile of its portfolio.

The principal types of derivatives utilized by the Fund, as well as the methods in which they may be used are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **Swaps** 

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

---

| | |
|:---|:---|
| **22 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

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

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

At the time the Fund enters into a centrally cleared swap, Fund deposits and maintains as collateral an initial margin with the broker, as required by the clearinghouse on which the transaction is effected. Such amount is shown as cash collateral due from broker on the statement of assets and liabilities. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for centrally cleared swaps is generally less than non-centrally cleared swaps, since

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 23** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

the clearinghouse, which is the issuer or counterparty to each centrally cleared swap, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.

**Interest Rate Swaps:** 

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

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

During the year ended November 30, 2022, the Fund held interest rate swaps for hedging purposes.

During the year ended November 30, 2022, the Fund had entered into the following derivatives:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Asset Derivatives** | **Asset Derivatives** | **Liability Derivatives** | **Liability Derivatives** |
| **Derivative Type** | **Statement of<br>Assets and<br>Liabilities<br>Location** | **Fair Value** | **Statement of<br>Assets and<br>Liabilities<br>Location** | **Fair Value** |
|  Interest rate contracts | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>Receivable/Payable for variation margin on centrally cleared swaps | $5062 <br>\* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>Receivable/Payable for variation margin on centrally cleared swaps | $19302 <br>\* |
|  Total |  | $5062 |  | $19302 |

---

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

---

| | |
|:---|:---|
| **24 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

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

---

| | | | |
|:---|:---|:---|:---|
| **Derivative Type** | **Location of<br>Gain or (Loss)<br>on Derivatives<br>Within Statement<br>of Operations** | **Realized Gain<br>or (Loss) on<br>Derivatives** | **Change in<br>Unrealized<br>Appreciation or<br>(Depreciation)** |
|  Interest rate contracts | Net realized gain (loss) on swaps; Net change in unrealized appreciation (depreciation) of swaps | $– 0 – $| (14240) |
|  Total |  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;– 0 – $| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14240) |

---

The following table represents the average monthly volume of the Fund's derivative transactions during the ended November 30, 2022:

---

| | |
|:---|:---|
|  Centrally Cleared Interest Rate Swaps: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Average notional amount | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1270000 <sup>(a)</sup> |

---

(a) Positions were open for three months during the year.

**2. Currency Transactions** 

The Fund may invest in non-U.S. Dollar-denominated securities on a currency hedged or unhedged basis. The Fund may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and other options. The Fund may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Fund and do not present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Fund may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).

**NOTE E** 

**Shares of the Fund** 

The Fund's shares may only be bought and sold in a secondary market through a broker-dealer at a market price. Because ETF shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund issues and redeems shares at its NAV only in aggregations of a specified number of shares (a creation unit) generally in exchange for a designated portfolio of securities and/or cash (including any portion of such securities for which

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 25** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

cash may be substituted). A fixed transaction fee is imposed on authorized participants in connection with creation unit redemption and creation transactions. Authorized participants may be required to pay an additional variable charge to cover certain costs and expenses related to the execution of trades resulting from creation unit transactions. Such variable charges, if any, are included in other capital within the Statements of Changes in Net Assets.

Transactions in shares of the Fund were as follows:

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Amount** |
|  | September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022 | September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022 |
|  Shares sold | 1902000 | $47294650 |
|  **Net increase** | **1902000** | $**47294650** |

---

(a) Commencement of operations.

**NOTE F** 

**Risks Involved in Investing in the Fund** 

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

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

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

---

| | |
|:---|:---|
| **26 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

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

The Fund invests, from time to time, in the municipal securities of Puerto Rico or other U.S. territories and their governmental agencies and municipalities, which are exempt from federal, state, and, where applicable, local income taxes. These municipal securities may have more risks than those of other U.S. issuers of municipal securities. Like many U.S. states and municipalities, Puerto Rico experienced a significant downturn during the 2007-2009 recession. Puerto Rico's downturn was particularly severe, and Puerto Rico continues to face a very challenging economic and fiscal environment, including as a result of the COVID-19 pandemic. 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 experience continued volatility.

**Tax Risk**—From time to time, the U.S. Government and the U.S. Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Fund by increasing

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 27** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

taxes on that income. In such event, the Fund's net asset value ("NAV") could also decline as yields on municipal bonds, which are typically lower than those on taxable bonds, would be expected to increase to approximately the yield of comparable taxable bonds. Actions or anticipated actions affecting the tax exempt status of municipal bonds could also result in significant shareholder redemptions of Fund shares as investors anticipate adverse effects on the Fund or seek higher yields to offset the potential loss of the tax deduction. As a result, the Fund would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Fund's yield.

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

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

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

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

---

| | |
|:---|:---|
| **28 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

**Leverage Risk**—When the Fund borrows money or otherwise leverages its investments, its performance may be volatile because leverage tends to exaggerate the effect of any increase or decrease in the value of the Fund's investments. The Fund may create leverage through the use of reverse repurchase arrangements, forward currency exchange contracts, forward commitments, dollar rolls or futures or by borrowing money. The use of other types of derivative instruments by the Fund, such as options and swaps, may also result in a form of leverage. Leverage may result in higher returns to the Fund than if the Fund were not leveraged, but may also adversely affect returns, particularly if the market is declining.

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

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

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

**ETF Share Price and Net Asset Value**—The Fund's shares are listed for trading on the NYSE Arca, Inc. (the "Exchange"). Shares are bought and sold in the secondary market at market prices. The net asset value per share ("NAV") of the Fund will fluctuate with changes in the market value of the Fund's holdings. The Fund's NAV is calculated once per day, at the end of the day. The market price of a share on the Exchange could be higher than the NAV (premium), or lower than the NAV (discount) and may fluctuate during the trading day. Disruptions in the creations and redemptions process or the existence of extreme market volatility could result in the Fund's shares trading above or below NAV. Given the nature of the markets for certain investments that may be made by the Fund, shares may trade at a larger premium or discount to the NAV than shares of other ETFs. In addition, in stressed market conditions, the market for

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 29** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

Fund shares may become less liquid in response to deteriorating liquidity in the markets for the Fund's underlying portfolio holdings.

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

**Authorized Participant Risk**—Only a limited number of financial institutions that enter into an authorized participant agreement with the Fund may engage in creation or redemption transactions. If the Fund's Authorized Participants decide not to create or redeem shares, Fund shares may trade at a premium or discount to the Fund's net asset value. If Authorized Participants do not proceed with creation and redemption orders for shares, the Fund could face trading halts or de-listing.

**LIBOR Transition and Associated Risk**—A Fund may be exposed to debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate, or "LIBOR," as a "benchmark" or "reference rate" for various interest rate calculations. In 2017, the United Kingdom Financial Conduct Authority ("FCA"), which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. The FCA and LIBOR's administrator, ICE Benchmark Administration, have since announced that most LIBOR settings (which reflect LIBOR rates quoted in different currencies over various time periods) will no longer be published after the end of 2021 but that the most widely used U.S. Dollar LIBOR settings will continue to be published until June 30, 2023. However, banks were strongly encouraged to cease entering into agreements with counterparties referencing LIBOR by the end of 2021. It is possible that a subset of LIBOR settings will be published after these dates on a "synthetic" basis, but any such publications would be considered non-representative of the underlying market. Since 2018 the Federal Reserve Bank of New York has published the secured overnight funding rate (referred to as SOFR), which is intended to replace U.S. Dollar LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market and has been used increasingly on a voluntary basis in new

---

| | |
|:---|:---|
| **30 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

instruments and transactions. In addition, on March 15, 2022, the Adjustable Interest Rate Act was signed into law. This law provides a statutory fallback mechanism to replace LIBOR with a benchmark rate that is selected by the Federal Reserve Board and based on SOFR for certain contracts that reference LIBOR without adequate fallback provisions.

The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect a Fund's performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, potentially adversely affecting a Fund's performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Neither the effect of the LIBOR transition process nor its ultimate success can yet be known.

**Indemnification Risk**—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. Therefore, the Fund has not accrued any liability in connection with these indemnification provisions.

**Management Risk**—The Fund is subject to management risk because it is an actively-managed 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.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 31** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

**NOTE G** 

**Distributions to Shareholders** 

The tax character of distributions paid during the period ended November 30, 2022 was as follows:

---

| | |
|:---|:---|
|  | **2022** |
|  Distributions paid from: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Ordinary income | $19391 |
|  Total taxable distributions paid | $19391 |
|  Tax-exempt income | 78845 |
|  Total distributions paid | $98236 |

---

As of November 30, 2022, the components of accumulated earnings (deficit) on a tax basis were as follows:

---

| | |
|:---|:---|
|  Undistributed tax-exempt income | $89858 |
|  Accumulated capital and other losses | (49487)<sup>(a)</sup> |
|  Unrealized appreciation (depreciation) | 150915 <sup>(b)</sup> |
|  Total accumulated earnings (deficit) | $191286 |

---

(a) As of November 30, 2022, the Fund had a net capital loss carryforward of $49,487.

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

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of November 30, 2022, the Fund had a net short-term capital loss carryforward of $49,487, which may be carried forward for an indefinite period.

During the current fiscal period, there were no permanent differences that resulted in adjustments to distributable earnings or additional paid-in capital.

**NOTE H** 

**Recent Accounting Pronouncements** 

In March 2020, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2020-04, "Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional guidance to ease the potential accounting burden due to the discontinuation of the LIBOR and other interbank-offered based reference rates. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying ASU 2020-04.

---

| | |
|:---|:---|
| **32 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

**NOTE I** 

**Subsequent Events** 

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund's financial statements through this date.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 33** |

---

------

**FINANCIAL HIGHLIGHTS** 

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

---

| | |
|:---|:---|
|  | **September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022** |
|  Net asset value, beginning of period | $25.00 |
|  **Income From Investment Operations** |  |
|  Net investment income<sup>(b)(c)</sup> | .16 |
|  Net realized and unrealized loss on investment transactions | (.10 |
|  Net increase in net asset value from operations | .06 |
|  **Less: Dividends** |  |
|  Dividends from net investment income | (.09 |
|  Net asset value, end of period | **$24.97** |
|  **Total Return<sup>(d)</sup>** |  |
|  Total investment return based on net asset value | .22 |
|  **Ratios/Supplemental Data** |  |
|  Net assets, end of period (000's omitted) | $47492 |
|  Ratio to average net assets of: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Expenses, net of waivers/reimbursements | .27 |
| &nbsp;&nbsp;&nbsp;&nbsp; Expenses, before waivers/reimbursements | .27 |
| &nbsp;&nbsp;&nbsp;&nbsp; Net investment income<sup>(c)</sup> | 2.99 |
|  Portfolio turnover rate<sup>(e)</sup> | 11 |

---

(a) Commencement of operations.

(b) Based on average shares outstanding.

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

(d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the
period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.

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

^ Annualized.

See notes to financial statements.

---

| | |
|:---|:---|
| **34 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**REPORT OF INDEPENDENT REGISTERED** 

**PUBLIC ACCOUNTING FIRM** 

**To the Board of Directors and Shareholders of** 

**AB Tax-Aware Short Duration Municipal ETF** 

***Opinion on the Financial Statements***

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

***Basis for Opinion***

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

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 35** |

---

------

**REPORT OF INDEPENDENT REGISTERED** 

**PUBLIC ACCOUNTING FIRM** (continued)

disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2022, by correspondence with the custodian, brokers and others; when replies were not received from brokers or others, we performed other auditing procedures. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

![LOGO](g412809g91r55.jpg)

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

New York, New York

January 26, 2023

---

| | |
|:---|:---|
| **36 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**2022 FEDERAL TAX INFORMATION** 

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund during the taxable period ended November 30, 2022. For foreign shareholders, 55.39% of ordinary income dividends paid may be considered to be qualifying to be taxed as interest-related dividends.

Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2023.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 37** |

---

------

**BOARD OF DIRECTORS** 

---

| | |
|:---|:---|
| **Gary L. Moody,<sup>(1)</sup>**<br> Chairman<br> **Jorge A. Bermudez**<sup>(1)</sup><br> **Michael J. Downey**<sup>(1)</sup><br> **Onur Erzan,** President and Chief Executive Officer | **Nancy P. Jacklin**<sup>(1)</sup><br> **Jeanette W. Loeb**<sup>(1)</sup><br> **Carol C. McMullen**<sup>(1)</sup><br> **Marshall C. Turner, Jr.**<sup>(1)</sup> |

---

**OFFICERS** 

---

| | |
|:---|:---|
| **Terrance T. Hults,**<sup>(2)</sup> Vice President<br> **Matthew J. Norton,**<sup>(2)</sup> Vice President<br> **Andrew D. Potter,**<sup>(2)</sup> Vice President<br> **Nancy E. Hay,** Secretary | **Michael B. Reyes,** Senior Vice President<br> **Joseph J. Mantineo,** Treasurer and Chief Financial Officer<br> **Stephen M. Woetzel,** Controller<br> **Jennifer Friedland,** Chief Compliance Officer |

---

---

| | |
|:---|:---|
| **Custodian and Accounting Agent**<br> State Street Bank and Trust Company<br> State Street Corporation CCB/5<br> 1 Iron Street<br> Boston, MA 02210<br>**Principal Underwriter**<br> Foreside Fund Services, LLC<br>Three Canal Plaza, Suite 100<br>Portland, ME 04101<br>**Legal Counsel**<br> Seward & Kissel LLP<br>One Battery Park Plaza<br>New York, NY 10004 | **Independent Registered Public Accounting Firm**<br> Ernst & Young LLP<br>One Manhattan West<br>New York, NY 10001<br>**Transfer Agent**<br> State Street Bank and Trust Company<br> State Street Corporation CCB/5<br> 1 Iron Street<br> Boston, MA 02210 |

---

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

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

---

| | |
|:---|:---|
| **38 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** 

**Board of Directors Information** 

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

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INTERESTED DIRECTOR** | **INTERESTED DIRECTOR** | **INTERESTED DIRECTOR** | **INTERESTED DIRECTOR** |
| Onur Erzan,<sup>#</sup><br> 47<br> (2022) | Senior Vice President of AllianceBernstein L.P. (the "Adviser"), Head of Global Client Group and Head of Private Wealth. He oversees AB's entire private wealth management business and third-party institutional and retail franchise, where he is responsible for all client services, sales and marketing, as well as product strategy, management and development worldwide. Director, President and Chief Executive Officer of the AB Mutual Funds as of April 1, 2021. He is also a member of the Equitable Holdings Management Committee. Prior to joining the firm in 2021, he spent over 19 years with McKinsey, most recently as a senior partner and co-leader of its Wealth & Asset Management practice. In addition, he co-led McKinsey's Banking & Securities Solutions (a portfolio of data, analytics and digital assets and capabilities) globally. | 75 |  |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 39** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INDEPENDENT DIRECTOR** |  |  |  |
| Garry L. Moody,<sup>##</sup> <br> *Chairman of the Board* <br> 70<br> (2022) | Private Investor since prior to 2018. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for accounting, pricing, custody and reporting for the Fidelity mutual funds; and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He is a member of the Investment Company Institute's Board of Governors and the Independent Directors Council's Governing Council, where he serves as Chairman of its Governance Committee. He is Chairman of the AB Funds and Chairman of the Independent Directors Committees since January 2023 and he has served as a director or trustee, and as Chairman of the Audit Committees, of the AB Funds since 2008. | 75 |  |

---

---

| | |
|:---|:---|
| **40 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INDEPENDENT DIRECTOR**<br> **(continued)** | **INDEPENDENT DIRECTOR**<br> **(continued)** |  |  |
| Jorge A. Bermudez,<sup>##</sup><br> 71<br> (2022) | Private Investor since prior to 2018. Formerly, Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup's Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since January 2020. | 75 | Moody's<br> Corporation since<br> April 2011 and Chair of its Audit Committee since December 2022 |
| Michael J. Downey,<sup>##</sup><br> 79<br> (2022) | Private Investor since prior to 2018. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2018 until January 2019. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities, Inc. He has served as a director or trustee of the AB Funds since 2005. | 75 |  |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 41** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INDEPENDENT DIRECTOR**<br> **(continued)** | **INDEPENDENT DIRECTOR**<br> **(continued)** |  |  |
| Nancy P. Jacklin,<sup>##</sup><br> 74<br> (2022) | Private Investor since prior to 2018. Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and has been Chair of the Governance and Nominating Committees of the AB Funds since August 2014. | 75 |  |
| Jeanette W. Loeb,<sup>##</sup><br> 70<br> (2022) | Chief Executive Officer of PetCareRx (e-commerce pet pharmacy) from 2002 to 2011 and 2015 to present. Director of New York City Center since 2005. She was a director of AB Multi-Manager Alternative Fund, Inc. (fund of hedge funds) from 2012 to 2018. Formerly, affiliated with Goldman Sachs Group, Inc. (financial services) from 1977 to 1994, including as a partner thereof from 1986 to 1994. She has served as a Director of the AB Funds since April 2020. | 75 | Apollo Investment Corp. (business development company) since August 2011 |

---

---

| | |
|:---|:---|
| **42 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INDEPENDENT DIRECTOR**<br> **(continued)** | **INDEPENDENT DIRECTOR**<br> **(continued)** |  |  |
| Carol C. McMullen,<sup>##</sup><br> 67<br> (2022) | Managing Director of Slalom Consulting (consulting) since 2014, private investor and a member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016. | 75 |  |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 43** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE**<br> **AND (YEAR FIRST ELECTED)\*\*** | **PRINCIPAL**<br> **OCCUPATION(S),**<br> **DURING PAST FIVE YEARS**<br> **AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER<br>PUBLIC COMPANY<br>DIRECTORSHIPS<br>CURRENTLY<br>HELD BY<br>DIRECTOR** |
| **INDEPENDENT DIRECTOR**<br> **(continued)** | **INDEPENDENT DIRECTOR**<br> **(continued)** |  |  |
| Marshall C. Turner, Jr.,<sup>##</sup><br> 81<br> (2022) | Private Investor since prior to 2018. Former Chairman and CEO of Dupont Photomasks, Inc. (semi-conductor manufacturing equipment). He was a Director of Xilinx, Inc. (programmable logic semi-conductors and adaptable, intelligent computing) from 2007 through August 2020, and is a former director of 33 other companies and organizations. He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the board of the George Lucas Educational Foundation. He has served as a director of one AB Fund since 1992, and director or trustee of all AB Funds since 2005. He has served as both Chairman of the AB Funds and Chairman of the Independent Directors Committees from 2014 through December 2022. | 75 |  |

---

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

\*\* There is no stated term of office for the Fund's Directors.

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

# Mr. Erzan is an "interested person" of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

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

---

| | |
|:---|:---|
| **44 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

**Officer Information** 

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

---

| | | |
|:---|:---|:---|
| **NAME, ADDRESS\*<br>AND AGE** | **POSITION(S)<br>HELD WITH FUND** | **PRINCIPAL OCCUPATION<br>DURING PAST FIVE YEARS\*\*** |
| Onur Erzan<br>47 | President and Chief Executive Officer | See biography above. |
| Terrance T. Hults<br>56 | Vice President | Senior Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. |
| Matthew J. Norton<br>40 | Vice President | Senior Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. He is also Chief Investment Officer-Municipal Bonds. |
| Andrew D. Potter<br>37 | Vice President | Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. |
| Nancy E. Hay<br>50 | Secretary | Vice President and Counsel of the Adviser\*\*, with which she has been associated since prior to 2018 and Assistant Secretary of ABI\*\*. |
| Michael B. Reyes<br> 46 | Senior Vice President | Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. |
| Joseph J. Mantineo<br>63 | Treasurer and Chief Financial Officer | Senior Vice President of AllianceBernstein Investor Services, Inc. ("ABIS")\*\*, with which he has been associated since prior to 2018. |
| Stephen M. Woetzel<br>51 | Controller | Senior Vice President of the ABIS\*\*, with which he has been associated since prior to 2018. |
| Jennifer Friedland<br> 48 | Chief Compliance Officer | Vice President of the Adviser\*\* since 2020 and Mutual Fund Chief Compliance Officer (of all Funds since January 2023 and of the ETF Funds since 2022). Before joining the Adviser\*\* in 2020, she was Chief Compliance Officer at WestEnd Advisors, LLC from prior to 2018 until 2019. |

---

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

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 45** |

---

------

**Operation and Effectiveness of the Fund's Liquidity Risk Management Program:** 

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

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

Another requirement of the Liquidity Rule is for the Fund's Board of Trustees (the "Fund Board") to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the Fund's LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2022, which covered the period January 1, 2021 through December 31, 2021 (the "Program Reporting Period").

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

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

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

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

The Adviser informed the Fund Board that the Committee believes the Fund's LRMP is adequately designed, has been implemented as intended,

---

| | |
|:---|:---|
| **46 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

and has operated effectively since its inception. No material exceptions have been noted since the implementation of the LRMP. During the Program Reporting Period, liquidity in all markets was significantly recovered and improved compared to the prior reporting period which included extreme levels of price volatility and relative illiquidity beginning in March 2020 with COVID-19 impacts. As such, the program operated in a relatively robust and benign liquidity environment experienced in markets during the Program Reporting Period. There were no liquidity events that impacted the Fund or its ability to timely meet redemptions during the Program Reporting Period.

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 47** |

---

------

**Information Regarding the Review and Approval of the Fund's Advisory Agreement** 

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

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

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

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

---

| | |
|:---|:---|
| **48 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

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

**Nature, Extent and Quality of Services to be Provided** 

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

**Costs of Services to be Provided and Profitability** 

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

**Fall-Out Benefits** 

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

**Investment Results** 

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 49** |

---

------

**Advisory Fees and Other Expenses** 

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

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

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

---

| | |
|:---|:---|
| **50 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

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

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

**Economies of Scale** 

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB TAX-AWARE SHORT DURATION MUNICIPAL ETF <sup>\|</sup> 51** |

---

------

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

------

**AB FAMILY OF FUNDS** 

**US EQUITY** 

**CORE** 

Core Opportunities Fund

Select US Equity Portfolio

Sustainable US Thematic Portfolio

**GROWTH** 

Concentrated Growth Fund

Discovery Growth Fund

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

**VALUE** 

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

**INTERNATIONAL/ GLOBAL EQUITY** 

**CORE** 

Global Core Equity Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Sustainable International Thematic Fund

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

**GROWTH** 

Concentrated International Growth Portfolio

**VALUE** 

All China Equity Portfolio

International Value Fund

**FIXED INCOME** 

**MUNICIPAL** 

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

**TAXABLE** 

Bond Inflation Strategy

Global Bond Fund

High Income Fund

High Yield Portfolio

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Sustainable Thematic Credit Portfolio

Total Return Bond Portfolio

**ALTERNATIVES** 

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

**MULTI-ASSET** 

All Market Total Return Portfolio

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Sustainable Thematic Balanced Portfolio

**CLOSED-END FUNDS** 

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

**EXCHANGE-TRADED FUNDS** 

Tax-Aware Short Duration Municipal ETF

Ultra Short Income ETF

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

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

---

| | |
|:---|:---|
| **52 <sup>\|</sup> AB TAX-AWARE SHORT DURATION MUNICIPAL ETF** | **abfunds.com** |

---

------

![LOGO](g412809g43p34.jpg)

AB TAX-AWARE SHORT DURATION MUNICIPAL ETF

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

ETF01-TASDM-0151-1122 ![LOGO](g412809g22c48.jpg)

------

**NOV** <sup>11.30.22</sup>

![LOGO](g366220g43p34.jpg)

ANNUAL REPORT

## AB ULTRA SHORT INCOME ETF

## (NYSE: YEAR)
![LOGO](g366220covart_7682.jpg)

------

A discussion of the Fund's investment performance is not included in this report. AllianceBernstein L.P. would like to thank you for your interest in the Fund.

 <br> Investment Products Offered   <u> • Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed</u>

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

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

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

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

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

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

------

---

| | |
|:---|:---|
| **FROM THE PRESIDENT** | ![LOGO](g366220g92f19.jpg) |

---

Dear Shareholder,

We're pleased to provide this report for the AB Ultra Short Income ETF.

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

<sup>+</sup> Fostering diverse perspectives that give us a distinctive approach to navigating global capital markets

<sup>+</sup> Applying differentiated investment insights through a connected global research network

<sup>+</sup> Embracing innovation to design better ways to invest and leading-edge solutions

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

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

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

Sincerely,

![LOGO](g366220g55d83.jpg)

Onur Erzan

President and Chief Executive Officer, AB ETFs

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 1** |

---

------

**EXPENSE EXAMPLE** 

(unaudited)

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

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

**Actual Expenses** 

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

**Hypothetical Example for Comparison Purposes** 

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

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

---

| | |
|:---|:---|
| **2 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**EXPENSE EXAMPLE** (continued)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Beginning<br>Account Value<br>June 1,<br>2022** | **Ending<br>Account Value<br>November 30,<br>2022** | **Expenses<br>Paid<br>During<br>Period\*** |  | **Annualized<br>Expense<br>Ratio\*** |  |
|  Actual | $&nbsp;&nbsp;&nbsp;&nbsp;1000 | $&nbsp;&nbsp;&nbsp;&nbsp;1004.60 | $&nbsp;&nbsp;&nbsp;&nbsp;0.54 | \*\* | 0.25 | %\*\* |
|  Hypothetical\*\*\* | $1000 | $1023.82 | $1.27 |  | 0.25 | % |

---

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

\*\* Expenses paid are based on the period from September 14, 2022 (commencement of operations) and are equal to the class's annualized expense ratio, multiplied by the average account value over the period, multiplied by 78/365 (to reflect the since inception period).

\*\*\* Assumes 5% annual return before expenses. 

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 3** |

---

------

**PORTFOLIO SUMMARY** 

**November 30, 2022** (unaudited)

PORTFOLIO STATISTICS

Net Assets ($mil): $150.0

------

![LOGO](g366220g20u20.jpg)

---

| | |
|:---|:---|
| 1 | The Fund's security type breakdown is expressed as a percentage of total investments and may vary over time. The Fund also enters into derivative transactions, which may be used for hedging or investment purposes (see "Portfolio of Investments" section of the report for additional details).  |

---

---

| | |
|:---|:---|
| **4 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** 

**November 30, 2022** 

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **CORPORATES - INVESTMENT GRADE – 70.8%** |  |  |  |
|  **Financial Institutions – 42.5%** |  |  |  |
|  **Banking – 33.2%** |  |  |  |
|  ABN AMRO Bank NV <br>4.75%, 07/28/2025<sup>(a)</sup> | U.S.$| 2206 | $2139357 |
|  AIB Group PLC <br>4.263%, 04/10/2025<sup>(a)</sup> |  | 2191 | 2109955 |
|  American Express Co. <br>3.40%, 02/27/2023 |  | 745 | 742653 |
|  Bank of America Corp. <br>0.976%, 04/22/2025 |  | 1006 | 941374 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.458%, 03/15/2025 |  | 1001 | 974724 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.55%, 03/05/2024 |  | 90 | 89535 |
|  Barclays PLC <br>1.007%, 12/10/2024 |  | 640 | 605229 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.932%, 05/07/2025 |  | 997 | 961776 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.375%, 09/11/2024 |  | 540 | 530005 |
|  BNP Paribas SA <br>3.25%, 03/03/2023 |  | 508 | 506029 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.375%, 09/28/2025<sup>(a)</sup> |  | 1694 | 1615856 |
|  BPCE SA <br>5.15%, 07/21/2024<sup>(a)</sup> |  | 2167 | 2122598 |
|  Capital One Financial Corp. <br>4.166%, 05/09/2025 |  | 1884 | 1836787 |
|  Cooperatieve Rabobank UA <br>4.375%, 08/04/2025 |  | 1952 | 1898398 |
|  Danske Bank A/S <br>5.375%, 01/12/2024<sup>(a)</sup> |  | 2119 | 2106307 |
|  Discover Bank <br>3.35%, 02/06/2023 |  | 639 | 636770 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.20%, 08/08/2023 |  | 1657 | 1644208 |
|  Fifth Third Bank NA <br>1.80%, 01/30/2023 |  | 503 | 500535 |
|  Goldman Sachs Group, Inc. (The) <br>0.925%, 10/21/2024 |  | 288 | 274746 |
| &nbsp;&nbsp;&nbsp;&nbsp; 1.757%, 01/24/2025 |  | 1912 | 1822671 |
|  HSBC Holdings PLC <br>3.803%, 03/11/2025 |  | 754 | 730174 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.95%, 05/18/2024 |  | 1361 | 1344709 |
|  JPMorgan Chase & Co. <br>3.559%, 04/23/2024 |  | 1887 | 1873300 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.797%, 07/23/2024 |  | 144 | 142468 |
|  Lloyds Banking Group PLC <br>3.87%, 07/09/2025 |  | 1081 | 1042570 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.05%, 08/16/2023 |  | 1047 | 1037032 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 5** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  Mitsubishi UFJ Financial Group, Inc. <br>0.848%, 09/15/2024 | U.S.$| 2186 | $2100768 |
|  Mizuho Financial Group, Inc. <br>0.849%, 09/08/2024 |  | 1954 | 1876563 |
| &nbsp;&nbsp;&nbsp;&nbsp; 1.241%, 07/10/2024 |  | 263 | 255557 |
|  Morgan Stanley <br>0.79%, 05/30/2025 |  | 1003 | 928948 |
| &nbsp;&nbsp;&nbsp;&nbsp; 0.791%, 01/22/2025 |  | 580 | 545374 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.62%, 04/17/2025 |  | 644 | 627617 |
|  Nationwide Building Society <br>1.00%, 08/28/2025<sup>(a)</sup> |  | 510 | 451432 |
|  NatWest Group PLC<br>4.269%, 03/22/2025 |  | 1335 | 1296045 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.519%, 06/25/2024 |  | 790 | 781642 |
|  PNC Bank NA <br>2.50%, 08/27/2024 |  | 539 | 518507 |
|  Royal Bank of Canada <br>Series G <br>1.95%, 01/17/2023 |  | 76 | 75758 |
|  Societe Generale SA <br>5.00%, 01/17/2024<sup>(a)</sup> |  | 2149 | 2118162 |
|  Standard Chartered PLC <br>3.785%, 05/21/2025<sup>(a)</sup> |  | 2202 | 2111586 |
|  Sumitomo Mitsui Banking Corp. <br>3.95%, 01/10/2024 |  | 430 | 423662 |
| &nbsp;&nbsp;&nbsp;&nbsp; Series G <br>3.65%, 07/23/2025 |  | 621 | 598520 |
|  Synchrony Bank <br>5.40%, 08/22/2025 |  | 1901 | 1861687 |
|  Wells Fargo & Co. <br>1.654%, 06/02/2024 |  | 1623 | 1593753 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.48%, 01/16/2024 |  | 487 | 484726 |
|  Western Union Co. (The) <br>2.85%, 01/10/2025 |  | 1009 | 961123 |
|  |  |  | 49841196 |
|  **Brokerage – 0.4%** |  |  |  |
|  Charles Schwab Corp. (The) <br>3.55%, 02/01/2024 |  | 532 | 524504 |
|  **Finance – 3.0%** |  |  |  |
|  Aircastle Ltd. <br>4.125%, 05/01/2024 |  | 2190 | 2111620 |
|  Aviation Capital Group LLC <br>5.50%, 12/15/20204<sup>(a)</sup> |  | 2175 | 2133740 |
|  Synchrony Financial <br>4.50%, 07/23/2025 |  | 239 | 228831 |
|  |  |  | 4474191 |

---

---

| | |
|:---|:---|
| **6 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **Insurance – 0.7%** |  |  |  |
|  American International Group, Inc. <br>2.50%, 06/30/2025 | U.S.$| 95 | $89856 |
|  MetLife, Inc. <br>3.60%, 04/10/2024 |  | 1016 | 996726 |
|  |  |  | 1086582 |
|  **REITs – 5.2%** |  |  |  |
|  American Tower Corp. <br>3.00%, 06/15/2023 |  | 1055 | 1041844 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.50%, 01/31/2023 |  | 1029 | 1026294 |
|  Brixmor Operating Partnership LP <br>3.65%, 06/15/2024 |  | 1142 | 1107295 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.85%, 02/01/2025 |  | 1006 | 968697 |
|  GLP Capital LP/GLP Financing II, Inc. <br>5.375%, 11/01/2023 |  | 1848 | 1831276 |
|  Host Hotels & Resorts LP <br>Series E <br>4.00%, 06/15/2025 |  | 1958 | 1873806 |
|  |  |  | 7849212 |
|  |  |  | 63775685 |
|  **Industrial – 25.2%** |  |  |  |
|  **Basic – 1.8%** |  |  |  |
|  Eastman Chemical Co. <br>3.80%, 03/15/2025 |  | 1000 | 976970 |
|  Linde, Inc. <br>2.70%, 02/21/2023 |  | 351 | 349196 |
|  Nucor Corp. <br>2.00%, 06/01/2025 |  | 429 | 400064 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.95%, 05/23/2025 |  | 1014 | 993456 |
|  |  |  | 2719686 |
|  **Capital Goods – 3.7%** |  |  |  |
|  CNH Industrial Capital LLC <br>3.95%, 05/23/2025 |  | 1014 | 987677 |
|  John Deere Capital Corp. <br>2.80%, 03/06/2023 |  | 1808 | 1798888 |
|  Parker-Hannifin Corp. <br>2.70%, 06/14/2024 |  | 1007 | 967948 |
|  Westinghouse Air Brake Technologies Corp. <br>4.40%, 03/15/2024 |  | 1899 | 1866356 |
|  |  |  | 5620869 |
|  **Communications - Media – 2.6%** |  |  |  |
|  Charter Communications Operating LLC/Charter Communications Operating Capital <br>4.50%, 02/01/2024 |  | 206 | 203660 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.908%, 07/23/2025 |  | 1910 | 1878313 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 7** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  Time Warner Cable Enterprises LLC <br>8.375%, 03/15/2023 | U.S.$| 1837 | $1856454 |
|  |  |  | 3938427 |
|  **Consumer Cyclical - Automotive – 0.9%** |  |  |  |
|  Hyundai Capital America <br>1.00%, 09/17/2024<sup>(a)</sup> |  | 1508 | 1387390 |
|  **Consumer Cyclical - Other – 0.7%** |  |  |  |
|  Lennar Corp. <br>4.50%, 04/30/2024 |  | 1000 | 985710 |
|  **Consumer Cyclical - Retailers – 0.7%** |  |  |  |
|  Ross Stores, Inc. <br>4.60%, 04/15/2025 |  | 162 | 161447 |
|  Walmart, Inc. <br>2.55%, 04/11/2023 |  | 881 | 873688 |
|  |  |  | 1035135 |
|  **Consumer Non-Cyclical – 6.5%** |  |  |  |
|  Altria Group, Inc. <br>2.35%, 05/06/2025 |  | 1009 | 949106 |
|  Cardinal Health, Inc. <br>3.079%, 06/15/2024 |  | 803 | 778396 |
|  Gilead Sciences, Inc. <br>2.50%, 09/01/2023 |  | 955 | 937972 |
|  Philip Morris International, Inc. <br>5.125%, 11/15/2024 |  | 2000 | 2001180 |
|  Reynolds American, Inc. <br>4.45%, 06/12/2025 |  | 1930 | 1898637 |
|  Royalty Pharma PLC <br>0.75%, 09/02/2023 |  | 1946 | 1880342 |
|  Tyson Foods, Inc. <br>3.95%, 08/15/2024 |  | 422 | 414788 |
|  Zimmer Biomet Holdings, Inc. <br>1.45%, 11/22/2024 |  | 386 | 358328 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.55%, 04/01/2025 |  | 511 | 493943 |
|  |  |  | 9712692 |
|  **Energy – 3.2%** |  |  |  |
|  Baker Hughes Holdings LLC / Baker Hughes Co-Obligor, Inc. <br>1.231%, 12/15/2023 |  | 219 | 211129 |
|  Canadian Natural Resources Ltd. <br>3.90%, 02/01/2025 |  | 485 | 474708 |
|  Chevron Corp. <br>1.141%, 05/11/2023 |  | 316 | 311162 |
|  Exxon Mobil Corp. <br>1.571%, 04/15/2023 |  | 764 | 754939 |

---

---

| | |
|:---|:---|
| **8 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  Kinder Morgan Energy Partners LP <br>4.15%, 02/01/2024 | U.S.$| 111 | $109553 |
|  Marathon Petroleum Corp. <br>4.70%, 05/01/2025 |  | 1018 | 1009052 |
|  TotalEnergies Capital International SA <br>2.434%, 01/10/2025 |  | 1006 | 963899 |
|  Williams Cos., Inc. (The) <br>4.30%, 03/04/2024 |  | 1002 | 991539 |
|  |  |  | 4825981 |
|  **Services – 0.2%** |  |  |  |
|  Global Payments, Inc. <br>2.65%, 02/15/2025 |  | 271 | 254702 |
|  **Technology – 3.8%** |  |  |  |
|  Dell International LLC / EMC Corp. <br>5.45%, 06/15/2023 |  | 1863 | 1863410 |
|  Microchip Technology, Inc. <br>2.67%, 09/01/2023 |  | 1915 | 1873943 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.333%, 06/01/2023 |  | 206 | 204638 |
|  Microsoft Corp. <br>2.375%, 05/01/2023 |  | 853 | 844999 |
|  Skyworks Solutions, Inc. <br>0.90%, 06/01/2023 |  | 858 | 837794 |
|  |  |  | 5624784 |
|  **Transportation - Railroads – 1.1%** |  |  |  |
|  Burlington Northern Santa Fe LLC <br>3.85%, 09/01/2023 |  | 142 | 141216 |
|  Norfolk Southern Corp. <br>2.903%, 02/15/2023 |  | 94 | 93550 |
|  Union Pacific Corp. <br>3.50%, 06/08/2023 |  | 1470 | 1457814 |
|  |  |  | 1692580 |
|  |  |  | 37797956 |
|  **Utility – 3.1%** |  |  |  |
|  **Electric – 3.1%** |  |  |  |
|  DTE Energy Co. <br>4.22%, 11/01/2024 |  | 1005 | 987674 |
|  Eversource Energy <br>4.20%, 06/27/2024 |  | 800 | 789184 |
|  MidAmerican Energy Co. <br>3.50%, 10/15/2024 |  | 223 | 218466 |
|  NextEra Energy Capital Holdings, Inc. <br>0.65%, 03/01/2023 |  | 136 | 134606 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.255%, 09/01/2024 |  | 1002 | 988834 |
|  Southern Co. (The) <br>2.95%, 07/01/2023 |  | 1287 | 1271890 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 9** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  WEC Energy Group, Inc. <br>0.55%, 09/15/2023 | U.S.$| 227 | $219078 |
|  |  |  | 4609732 |
|  Total Corporates - Investment Grade <br>(cost $106,255,445) |  |  | 106183373 |
|  **AGENCIES – 11.3%** |  |  |  |
|  **Agency Debentures – 11.3%** |  |  |  |
|  Federal Farm Credit Banks Funding Corp. <br>Series 0000 <br>3.855% (SOFR + 0.04%), 05/06/2024<sup>(b)</sup> |  | 3000 | 2997240 |
| &nbsp;&nbsp;&nbsp;&nbsp; 3.90% (FedFundEffective + 0.07%), 09/16/2024<sup>(b)</sup> |  | 3000 | 2994480 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.19% (FedFundEffective + 0.36%), 12/12/2022<sup>(b)</sup> |  | 2000 | 2001020 |
| &nbsp;&nbsp;&nbsp;&nbsp; Series 01 <br>3.83% (SOFR + 0.02%), 04/10/2023<sup>(b)</sup> |  | 3000 | 2999112 |
|  Federal Home Loan Banks <br>3.84% (SOFR + 0.03%), 03/21/2023<sup>(b)</sup> |  | 3000 | 2999682 |
| &nbsp;&nbsp;&nbsp;&nbsp; Series 0006 <br>3.83% (SOFR + 0.02%), 01/23/2023<sup>(b)</sup> |  | 3000 | 2999759 |
|  Total Agencies <br>(cost $16,998,903) |  |  | 16991293 |
|  **GOVERNMENTS - TREASURIES – 4.0%** |  |  |  |
|  **United States – 4.0%** |  |  |  |
|  U.S. Treasury Notes <br>4.257% (USBMMY3M - 0.08%), 04/30/2024<sup>(b)</sup> |  | 3000 | 2994672 |
| &nbsp;&nbsp;&nbsp;&nbsp; 4.369% (USBMMY3M + 0.04%), 07/31/2024<sup>(b)</sup> |  | 3000 | 2998025 |
|  Total Governments - Treasuries <br>(cost $5,995,318) |  |  | 5992697 |
|  **SHORT-TERM INVESTMENTS – 13.1%** |  |  |  |
|  **U.S. Treasury Bills – 6.0%** |  |  |  |
|  U.S. Treasury Bill <br>Zero Coupon, 12/13/2022 |  | 3000 | 2996450 |
| &nbsp;&nbsp;&nbsp;&nbsp; Zero Coupon, 01/19/2023 |  | 3000 | 2983871 |
| &nbsp;&nbsp;&nbsp;&nbsp; Zero Coupon, 04/20/2023 |  | 3000 | 2948783 |
|  Total U.S. Treasury Bills <br>(cost $8,931,132) |  |  | 8929104 |

---

---

| | |
|:---|:---|
| **10 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
|  | | **Principal<br>Amount<br>(000)** | **U.S. $ Value** |
|  **Agencies – 5.9%** | **Agencies – 5.9%** | **Agencies – 5.9%** | **Agencies – 5.9%** |
|  **Agency Discount Notes – 5.9%** | **Agency Discount Notes – 5.9%** | **Agency Discount Notes – 5.9%** | **Agency Discount Notes – 5.9%** |
|  Federal Home Loan Bank Discount Notes<br>Zero Coupon, 01/26/2023 | U.S.$| 3000 | $2977158 |
| &nbsp;&nbsp;&nbsp;&nbsp; Zero Coupon, 01/19/2023 |  | 3000 | 2979925 |
| &nbsp;&nbsp;&nbsp;&nbsp; Zero Coupon, 04/12/2023 |  | 3000 | 2947210 |
|  Total Agencies <br>(cost $8,919,155) |  |  | 8904293 |
|  |  | **Shares** |  |
|  **Investment Companies – 1.2%** |  |  |  |
|  AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB,<br>3.50%<sup>(c)(d)(e)</sup> <br>(cost $1,863,941) |  | 1863941 | 1863941 |
|  Total Short-Term Investments <br>(cost $19,714,228) |  |  | 19697338 |
|  **Total Investments – 99.2%** <br> (cost $148,963,894) |  |  | 148864701 |
|  Other assets less liabilities – 0.8% |  |  | 1137741 |
|  **Net Assets – 100.0%** |  |  | $**150002442** |

---

**FUTURES (see Note D)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description** | **Number of<br>Contracts** | **Expiration<br>Month** | **Current<br>Notional** | **Value and<br>Unrealized<br>Appreciation<br>(Depreciation)** |
|  **Sold Contracts** | **Sold Contracts** | **Sold Contracts** | **Sold Contracts** | **Sold Contracts** |
|  U.S. T-Note 2 Yr (CBT) Futures | 16 | March 2023 | $3285750 | $(8750) |

---

(a) Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are
considered restricted, but liquid and may be resold in transactions exempt from registration. At November 30, 2022, the aggregate market value of these securities amounted to $18,296,383 or 12.2% of net assets.

(b) Floating Rate Security. Stated interest/floor/ceiling rate was in effect at November 30, 2022.

(c) Affiliated investments.

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 11** |

---

------

**PORTFOLIO OF INVESTMENTS** (continued)

Glossary:

CBT – Chicago Board of Trade

FedFundEffective – Federal Funds Effective Rate

REIT – Real Estate Investment Trust

SOFR – Secured Overnight Financing Rate

USBMMY3M – U.S. Treasury 3 Month Bill Money Market Yield

See notes to financial statements.

---

| | |
|:---|:---|
| **12 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**STATEMENT OF ASSETS & LIABILITIES** 

**November 30, 2022** 

---

| | |
|:---|:---|
| **Assets** |  |
|  Investments in securities, at value |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Unaffiliated issuers (cost $147,099,953) | $147000760 |
| &nbsp;&nbsp;&nbsp;&nbsp; Affiliated issuers (cost $1,863,941) | 1863941 |
|  Cash collateral due from broker | 18800 |
|  Interest receivable | 1150805 |
|  Affiliated dividends receivable | 5145 |
|  Total assets | 150039451 |
| **Liabilities** |  |
|  Advisory fee payable | 30510 |
|  Payable for variation margin on futures | 6499 |
|  Total liabilities | 37009 |
|  Net Assets | $**150002442** |
| **Composition of Net Assets** |  |
|  Paid-in capital | $150050000 |
|  Accumulated loss | (47558) |
|  **Net Assets** | $**150002442** |
|  **Net Asset Value Per Share—unlimited shares of the Fund authorized, No par value** (based on 3,001,000 shares outstanding) | $**49.98** |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 13** |

---

------

**STATEMENT OF OPERATIONS** 

**For the Period from September 14, 2022<sup>(a)</sup> to November 30, 2022** 

---

| | | |
|:---|:---|:---|
| **Investment Income** |  |  |
|  Interest | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1308840 |  |
|  Dividends—Affiliated issuers | 38056 | $1346896 |
| **Expenses** |  |  |
|  Advisory fee (see Note B) | 79767 |  |
|  Total expenses | 79767 |  |
|  Less: expenses waived and reimbursed by the Adviser (see Note B) | (1560) |  |
|  Net expenses |  | 78207 |
|  Net investment income |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1268689 |
| **Realized and Unrealized Loss on Investment Transactions** |  |  |
|  Net realized loss on: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment transactions |  | (462957) |
| &nbsp;&nbsp;&nbsp;&nbsp; Futures |  | (14303) |
|  Net change in unrealized appreciation (depreciation) of: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments |  | (99193) |
| &nbsp;&nbsp;&nbsp;&nbsp; Futures |  | (8750) |
|  Net loss on investment transactions |  | (585203) |
|  **Net Increase in Net Assets from Operations** |  | $**683486** |

---

(a) Commencement of operations.

---

| | |
|:---|:---|
| **14 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**STATEMENT OF CHANGES IN NET ASSETS** 

---

| | |
|:---|:---|
|  | **September 14,<br>2022<sup>(a)</sup> to**<br>**November 30,<br>2022** |
| **Increase (Decrease) in Net Assets from Operations** | **Increase (Decrease) in Net Assets from Operations** |
|  Net investment income | $1268689 |
|  Net realized loss on investment transactions | (477260) |
|  Net change in unrealized appreciation (depreciation) of investments | (107943) |
|  Net increase in net assets from operations | 683486 |
|  Distribution to Shareholders | (731044) |
| **Transactions in Shares of the Fund** |  |
|  Net increase (decrease) | 150050000 |
|  Total increase | 150002442 |
| **Net Assets** | **Net Assets** |
|  Beginning of period | – 0 |
|  End of period | $**150002442** |

---

(a) Commencement of operations.

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 15** |

---

------

**NOTES TO FINANCIAL STATEMENTS** 

**November 30, 2022** 

**NOTE A** 

**Significant Accounting Policies** 

The AB Active ETFs, Inc. (the "Corporation") is registered under the Investment Company Act of 1940 as an open-end management investment company. The Corporation, which is a Maryland corporation, operates as a series company comprised of two funds currently in operation. Each fund is considered to be a separate entity for financial reporting and tax purposes. This report relates only to the AB Ultra Short Income ETF (the "Fund"). The Fund commenced investment operations on September 14, 2022. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP"), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The Fund is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Fund.

**1. Security Valuation** 

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

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter ("OTC") market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open

---

| | |
|:---|:---|
| **16 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the "Committee") must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open-end mutual funds are valued at the closing net asset value per share, while exchange-traded funds are valued at the closing market price per share.

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Fund may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Fund values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund generally values many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

**2. Fair Value Measurements** 

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 17** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund's own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1—quoted prices in active markets for identical investments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value
of investments)

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

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

---

| | |
|:---|:---|
| **18 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

The following table summarizes the valuation of the Fund's investments by the above fair value hierarchy levels as of November 30, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Investments in<br>Securities:** | **Level 1** | **Level 2** | **Level 3** | **Total** |  |
|  **Assets:** | **Assets:** | **Assets:** | **Assets:** | **Assets:** |  |
|  Corporates – Investment Grade | $– 0 | $106183373 | $– 0 | $106183373 |  |
|  Agencies | – 0 | 16991293 | – 0 | 16991293 |  |
|  Governments – Treasuries | – 0 | 5992697 | – 0 | 5992697 |  |
|  Short-Term Investments: | – 0 |  | – 0 |  |  |
|  U.S. Treasury Bills | – 0 | 8929104 | – 0 | 8929104 |  |
|  Agencies | – 0 | 8904293 | – 0 | 8904293 |  |
|  Investment Companies | 1863941 | – 0 | – 0 | 1863941 |  |
|  Total Investments in Securities | 1863941 | 147000760 | – 0 | 148864701 |  |
|  **Other Financial Instruments<sup>(a)</sup>:** |  |  |  |  |  |
|  **Assets** | **– 0** | **– 0** | **– 0** | **– 0** | **–** |
|  **Liabilities:** | **Liabilities:** | **Liabilities:** | **Liabilities:** | **Liabilities:** |  |
|  Futures | (8750) | – 0 | – 0 | (8750) |)<sup>(b)</sup> |
|  **Total** | $**1855191** | $**147000760** | $**– 0** | $**148855951** |  |

---

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

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

**3. Currency Translation** 

Assets and liabilities denominated in foreign currencies and commitments under forward currency exchange contracts are translated into U.S. dollars at the mean of the quoted bid and ask prices of such currencies against the U.S. dollar. Purchases and sales of portfolio securities are translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired or sold. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued.

Net realized gain or loss on foreign currency transactions represents foreign exchange gains and losses from sales and maturities of foreign fixed income investments, holding of foreign currencies, currency gains or losses realized between the trade and settlement dates on foreign investment transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 19** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

currency gains and losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation of foreign currency denominated assets and liabilities.

**4. Taxes** 

It is Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. The Fund may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund's tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current tax year) and has concluded that no provision for income tax is required in the Fund's financial statements.

**5. Offering Expenses** 

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

**6. Investment Income and Investment Transactions** 

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

**7. Dividends and Distributions** 

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these

---

| | |
|:---|:---|
| **20 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

**NOTE B** 

**Advisory Fee and Other Transactions with Affiliates** 

Under the terms of the investment advisory agreement, the Fund pays the Adviser a unitary advisory fee at an annual rate of .25% of the Fund's average daily net assets. The fees are accrued daily and paid monthly.

Under the investment advisory agreement, in accordance with the unitary fee structure, the Adviser bears the cost of various third-party services required by the Fund, including audit, custodial, accounting, certain legal and transfer agency costs. Also under the investment advisory agreement, the Adviser will reimburse the Fund for the Fund's share of the acquired funds fees and expenses (advisory fees and other expenses) of any pooled investment vehicle for which the Adviser serves as investment adviser. For the period ended November 30, 2022, such waiver/reimbursements relating to the Fund's investment in AB Government Money Market Portfolio amounted to $1,560.

A summary of the Fund's transactions in AB mutual funds for the period ended November 30, 2022 is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Fund** | **Market<br>Value<br>11/30/21<br>(000)** | **Purchases<br>at Cost<br>(000)** | **Sales<br>Proceeds<br>(000)** | **Market<br>Value<br>11/30/22<br>(000)** | **Dividend<br>Income<br>(000)** |
|  Government Money Market Portfolio | $&nbsp;&nbsp;&nbsp;&nbsp;– 0 – $| &nbsp;&nbsp;&nbsp;&nbsp;36706 | $&nbsp;&nbsp;&nbsp;&nbsp;34842 | $&nbsp;&nbsp;&nbsp;&nbsp;1864 | $&nbsp;&nbsp;&nbsp;&nbsp;38 |

---

**NOTE C** 

**Distribution Plan** 

The Fund has adopted a Distribution and Service Plan (the "Plan") pursuant to Rule 12b-1 of the Act which permits the Fund to pay distribution and servicing fees not to exceed .25% per year of each Fund's average daily net assets. No such fees are currently paid.

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 21** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

**NOTE D** 

**Investment Transactions** 

Purchases and sales of investment securities (excluding in-kind capital share transactions and short-term investments) for the period ended November 30, 2022 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Purchases** | **Sales** |
|  Investment securities (excluding U.S. government securities) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109280689 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27603263 |
|  U.S. government securities | 11993420 | 2988333 |

---

For the period ended November 30, 2022, the Fund had no in-kind purchases and in-kind sales.

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

---

| | |
|:---|:---|
|  Cost | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;148963894 |
|  Gross unrealized appreciation | $333211 |
|  Gross unrealized depreciation | (432404) |
|  Net unrealized depreciation | $(99193) |

---

**1. Derivative Financial Instruments** 

The Fund may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, "investment purposes"), or to hedge or adjust the risk profile of its portfolio.

The principal types of derivatives utilized by the Fund, as well as the methods in which they may be used are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** **Futures** 

The Fund may buy or sell futures for investment purposes or for the purpose of hedging its portfolio against adverse effects of potential movements in the market. The Fund bears the market risk that arises from changes in the value of these instruments and the imperfect correlation between movements in the price of the futures and movements in the price of the assets, reference rates or indices which they are designed to track. Among other things, the Fund may purchase or sell futures for foreign currencies or options thereon for non-hedging purposes as a means of making direct investment in foreign currencies, as described below under "Currency Transactions".

At the time the Fund enters into futures, the Fund deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is effected. Such amount is

---

| | |
|:---|:---|
| **22 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

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

Use of long futures subjects the Fund to risk of loss in excess of the amounts shown on the statement of assets and liabilities, up to the notional value of the futures. Use of short futures subjects the Fund to unlimited risk of loss. Under some circumstances, futures exchanges may establish daily limits on the amount that the price of futures can vary from the previous day's settlement price, which could effectively prevent liquidation of unfavorable positions.

During the period ended November 30, 2022, the Fund held futures for hedging purposes.

During the period ended November 30, 2022, the Fund had entered into the following derivatives:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Asset Derivatives** | **Asset Derivatives** | **Liability Derivatives** | **Liability Derivatives** |
| **Derivative Type** | **Statement of<br>Assets and<br>Liabilities<br>Location** | **Fair Value** | **Statement of<br>Assets and<br>Liabilities<br>Location** | **Fair Value** |
|  Interest rate contracts |  |  | Receivable/Payable<br>for variation margin<br>on futures | $8750 \* |
|  Total |  |  |  | $&nbsp;&nbsp;&nbsp;&nbsp;8750 |

---

\* Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation (depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments. 

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 23** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **Derivative Type** | **Location of Gain or<br>(Loss) on Derivatives<br>Within Statement of<br>Operations** | **Realized Gain<br>or (Loss) on<br>Derivatives** | **Change in<br>Unrealized<br>Appreciation or<br>(Depreciation)** |
|  Interest rate contracts | Net realized gain (loss) on futures; Net change in unrealized appreciation (depreciation) of futures | $(14303) | $(8750) |
|  Total |  | $&nbsp;&nbsp;&nbsp;&nbsp;(14303) | $&nbsp;&nbsp;&nbsp;&nbsp;(8750) |

---

The following table represents the average monthly volume of the Fund's derivative transactions during the period ended November 30, 2022:

---

| | |
|:---|:---|
|  Futures: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Average notional amount of buy contracts | 1441563 <sup>(a)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp; Average notional amount of sale contracts | $&nbsp;&nbsp;&nbsp;&nbsp;1366281 <sup>(b)</sup> |

---

(a) Positions were open for less than one month during the period.

(b) Positions were open for three months during the period.

**2. Currency Transactions** 

The Fund may invest in non-U.S. Dollar-denominated securities on a currency hedged or unhedged basis. The Fund may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and other options. The Fund may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Fund and do not present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Fund may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).

**NOTE E** 

**Shares of the Fund** 

The Fund's shares may only be bought and sold in a secondary market through a broker-dealer at a market price. Because ETF shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (a premium) or less than NAV (a discount). The Fund issues and redeems shares at its NAV only in aggregations of a specified number of shares (a creation unit) generally in exchange for a designated portfolio of securities and/or cash (including any portion of such securities for which cash may be substituted). A fixed transaction fee is imposed on authorized participants in connection with creation unit redemption and creation transactions. Authorized participants may be required to pay an additional

---

| | |
|:---|:---|
| **24 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

variable charge to cover certain costs and expenses related to the execution of trades resulting from creation unit transactions. Such variable charges, if any, are included in other capital within the Statements of Changes in Net Assets.

Transactions in shares of the Fund were as follows:

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Amount** |
|  | September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022 | September 14,<br>2022<sup>(a)</sup> to<br>November 30,<br>2022 |
|  Shares sold | 3001000 | $150050000 |
|  **Net increase** | **3001000** | $**150050000** |

---

(a) Commencement of operations.

**NOTE F** 

**Risks Involved in Investing in the Fund** 

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

**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.

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 25** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

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

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

**Mortgage-Related and Other Asset-Backed Securities Risk**—Investments in mortgage-related and other asset-backed securities are subject to certain additional risks. The value of these securities may be particularly sensitive to changes in interest rates. These risks include "extension risk", which is the risk that, in periods of rising interest rates, issuers may delay the payment of principal, and "prepayment risk", which is the risk that in periods of falling interest rates, issuers may pay principal sooner than expected, exposing the Fund to a lower rate of return upon reinvestment of principal. Mortgage-backed securities offered by nongovernmental issuers and other asset-backed securities may be subject to other risks, such as higher rates of default in the mortgages or assets backing the securities or risks associated with the nature and servicing of mortgages or assets backing the securities. Some mortgage-backed securities are "TBA" securities, which have additional risks.

**Foreign (Non-U.S.) Risk**—Investments in securities of non-U.S. issuers may involve more risk than those of U.S. issuers. These securities may fluctuate more widely in price and may be more difficult to trade due to adverse market, economic, political, regulatory or other factors.

**Illiquid Investments Risk**—Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Causes of illiquid investments risk may include low trading volumes and large positions. Foreign fixed-income securities may have more illiquid investments risk because secondary trading markets for these securities may be smaller and less well-developed and the securities may trade less frequently. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline.

**Active Trading Risk**—The Fund expects to engage in active and frequent trading of its portfolio securities and its portfolio turnover rate may greatly exceed 100%. A higher rate of portfolio turnover increases transaction

---

| | |
|:---|:---|
| **26 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

costs, which may negatively affect the Fund's return. In addition, a high rate of portfolio turnover may result in substantial short-term gains, which may have adverse tax consequences for Fund shareholders.

**Investment in Other Investment Companies Risk**—As with other investments, investments in other investment companies are subject to market and selection risk. In addition, shareholders of the Fund bear both their proportionate share of expenses in the Fund (including management fees) and, indirectly, the expenses of the investment companies in which the Fund invests to the extent these expenses are not waived or reimbursed by the Adviser.

**ETF Share Price and Net Asset Value**—The Fund's shares are listed for trading on the NYSE Arca, Inc. (the "Exchange"). Shares are bought and sold in the secondary market at market prices. The net asset value per share ("NAV") of the Fund will fluctuate with changes in the market value of the Fund's holdings. The Fund's NAV is calculated once per day, at the end of the day. The market price of a share on the Exchange could be higher than the NAV (premium), or lower than the NAV (discount) and may fluctuate during the trading day. Disruptions in the creations and redemptions process or the existence of extreme market volatility could result in the Fund's shares trading above or below NAV. Given the nature of the markets for certain investments that may be made by the Fund, shares may trade at a larger premium or discount to the NAV than shares of other ETFs. In addition, in stressed market conditions, the market for Fund shares may become less liquid in response to deteriorating liquidity in the markets for the Fund's underlying portfolio holdings.

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

**Authorized Participant Risk**—Only a limited number of financial institutions that enter into an authorized participant agreement with the Fund may engage in creation or redemption transactions. If the Fund's Authorized Participants decide not to create or redeem shares, Fund shares may trade at a premium or discount to the Fund's net asset value.

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 27**  |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

If Authorized Participants do not proceed with creation and redemption orders for shares, the Fund could face trading halts or de-listing.

**LIBOR Transition and Associated Risk**—A Fund may be exposed to debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate, or "LIBOR," as a "benchmark" or "reference rate" for various interest rate calculations. In 2017, the United Kingdom Financial Conduct Authority ("FCA"), which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. The FCA and LIBOR's administrator, ICE Benchmark Administration, have since announced that most LIBOR settings (which reflect LIBOR rates quoted in different currencies over various time periods) will no longer be published after the end of 2021 but that the most widely used U.S. Dollar LIBOR settings will continue to be published until June 30, 2023. However, banks were strongly encouraged to cease entering into agreements with counterparties referencing LIBOR by the end of 2021. It is possible that a subset of LIBOR settings will be published after these dates on a "synthetic" basis, but any such publications would be considered non-representative of the underlying market. Since 2018 the Federal Reserve Bank of New York has published the secured overnight funding rate (referred to as SOFR), which is intended to replace U.S. Dollar LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market and has been used increasingly on a voluntary basis in new instruments and transactions. In addition, on March 15, 2022, the Adjustable Interest Rate Act was signed into law. This law provides a statutory fallback mechanism to replace LIBOR with a benchmark rate that is selected by the Federal Reserve Board and based on SOFR for certain contracts that reference LIBOR without adequate fallback provisions.

The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect a Fund's performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, potentially adversely affecting a Fund's performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative refer-

---

| | |
|:---|:---|
| **28 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

ence rate is not completed in a timely manner. Neither the effect of the LIBOR transition process nor its ultimate success can yet be known.

**Indemnification Risk**—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. Therefore, the Fund has not accrued any liability in connection with these indemnification provisions.

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

**NOTE G** 

**Distributions to Shareholders** 

The tax character of distributions paid during the period ended November 30, 2022 was as follows:

---

| | |
|:---|:---|
|  | **2022** |
|  Distributions paid from: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Ordinary income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;731044 |
|  Total taxable distributions | $731044 |

---

As of November 30, 2022, the components of accumulated earnings (deficit) on a tax basis were as follows:

---

| | |
|:---|:---|
|  Undistributed ordinary income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;537645 |
|  Accumulated capital and other losses | (486010)<sup>(a)</sup> |
|  Unrealized appreciation (depreciation) | (99193)<sup>(b)</sup> |
|  Total accumulated earnings (deficit) | $(47558) |

---

(a) As of November 30, 2022, the Fund had a net capital loss carryforward of $485,990. As of November 30, 2022, the
cumulative deferred loss on straddles was $20.

(b) The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the
recognition for tax purposes of unrealized gains/losses on certain derivative instruments.

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses. As of November 30, 2022,

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 29** |

---

------

**NOTES TO FINANCIAL STATEMENTS** (continued)

the Fund had a net short-term capital loss carryforward of $472,211 and a net long-term capital loss carryforward of $13,779, which may be carried forward for an indefinite period.

During the current fiscal period, there were no permanent differences that resulted in adjustments to accumulated loss or additional paid-in capital.

**NOTE H** 

**Recent Accounting Pronouncements** 

In March 2020, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2020-04, "Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional guidance to ease the potential accounting burden due to the discontinuation of the LIBOR and other interbank-offered based reference rates. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any, of applying ASU 2020-04.

**NOTE I** 

**Subsequent Events** 

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Fund's financial statements through this date.

---

| | |
|:---|:---|
| **30 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**FINANCIAL HIGHLIGHTS** 

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

---

| | |
|:---|:---|
|  | **September 14,<br>2022<sup>(a)</sup> to<br>November 30,**<br> **2022** |
|  Net asset value, beginning of period | $50.00 |
|  **Income From Investment Operations** | **Income From Investment Operations** |
|  Net investment income<sup>(b)(c)</sup> | .42 |
|  Net realized and unrealized loss on investment transactions | (.20 |
|  Net increase in net asset value from operations | .22 |
|  **Less: Dividends** |  |
|  Dividends from net investment income | (.24 |
|  Net asset value, end of period | **$49.98** |
|  **Total Return** |  |
|  Total investment return based on net asset value<sup>(d)</sup> | .46 |
|  **Ratios/Supplemental Data** |  |
|  Net assets, end of period (000's omitted) | $150002 |
|  Ratio to average net assets of: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Expenses, net of waivers/reimbursements | .25 |
| &nbsp;&nbsp;&nbsp;&nbsp; Expenses, before waivers/reimbursements | .25 |
| &nbsp;&nbsp;&nbsp;&nbsp; Net investment income<sup>(c)</sup> | 3.98 |
|  Portfolio turnover rate<sup>(e)</sup> | 35 |

---

(a) Commencement of operations.

(b) Based on average shares outstanding.

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

(d) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the
period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or
the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.

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

^ Annualized.

See notes to financial statements.

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 31** |

---

------

**REPORT OF INDEPENDENT REGISTERED** 

**PUBLIC ACCOUNTING FIRM** 

**To the Board of Directors and Shareholders of** 

**AB Ultra Short Income ETF** 

***Opinion on the Financial Statements***

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

***Basis for Opinion***

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

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

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

---

| | |
|:---|:---|
| **32 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**REPORT OF INDEPENDENT REGISTERED** 

**PUBLIC ACCOUNTING FIRM** (continued)

of securities owned as of November 30, 2022, by correspondence with the custodian, brokers and others; when replies were not received from brokers or others, we performed other auditing procedures. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

![LOGO](g366220g91r55.jpg)

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

New York, New York

January 26, 2023

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 33** |

---

------

**2022 FEDERAL TAX INFORMATION** 

(unaudited)

For Federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund during the taxable period ended November 30, 2022. For foreign shareholders, 78.38% of ordinary income dividends paid may be considered to be qualifying to be taxed as interest-related dividends.

Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2023.

---

| | |
|:---|:---|
| **34 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**BOARD OF DIRECTORS** 

---

| | |
|:---|:---|
| **Garry L. Moody**<sup>(1)</sup>**,**<br> Chairman<br> **Jorge A. Bermudez**<sup>(1)</sup><br> **Michael J. Downey**<sup>(1)</sup><br> **Onur Erzan,** President and Chief Executive Officer | **Nancy P. Jacklin**<sup>(1)</sup><br> **Jeanette W. Loeb**<sup>(1)</sup><br> **Carol C. McMullen**<sup>(1)</sup><br> **Marshall C. Turner, Jr.**<sup>(1)</sup> |
| **OFFICERS** |  |
| **Janaki Rao**<sup>(2),</sup> Vice President<br> **Matthew S. Sheridan**<sup>(2)</sup>**,**<br> Vice President<br> **Lucas Krupa**<sup>(2)</sup>**,** Vice President<br> **Nancy E. Hay,** Secretary | **Michael B. Reyes,**<br> Senior Vice President <br> **Joseph J. Mantineo,** Treasurer and Chief Financial Officer<br> **Stephen M. Woetzel,** Controller<br> **Jennifer Friedland,** Chief<br>Compliance Officer  |

---

---

| | |
|:---|:---|
| **Custodian and Accounting Agent**<br> State Street Bank and Trust Company State Street Corporation CCB/5 1 Iron Street Boston, MA 02210<br>**Principal Underwriter**<br> Foreside Fund Services, LLC<br> Three Canal Plaza, Suite 100<br> Portland, ME 04101<br>**Legal Counsel**<br> Seward & Kissel LLP<br> One Battery Park Plaza<br> New York, NY 10004 | **Transfer Agent**<br> State Street Bank and Trust Company State Street Corporation CCB/5 1 Iron Street Boston, MA 02210<br>**Independent Registered Public Accounting Firm**<br> Ernst & Young LLP<br> One Manhattan West<br> New York, NY 10001 |

---

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

---

| | |
|:---|:---|
| 2 | The day-to-day management of, and investment decisions for, the Fund's portfolio are made by the Adviser's Ultra Short Income Investment Team. Messrs. Rao, Sheridan and Krupa are the investment professionals with the most significant responsibility for the day-to-day management of the Fund's portfolio.  |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 35** |

---

------

**MANAGEMENT OF THE FUND** 

**Board of Directors Information** 

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

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INTERESTED DIRECTOR** | **INTERESTED DIRECTOR** |  |  |
| Onur Erzan,<sup>#</sup><br> AllianceBernstein L.P.<br>1345 Avenue of the Americas<br>New York, NY 10105<br>47<br>(2022) | Senior Vice President of AllianceBernstein L.P. (the "Adviser"), Head of Global Client Group and Head of Private Wealth. He oversees AB's entire private wealth management business and third-party institutional and retail franchise, where he is responsible for all client services, sales and marketing, as well as product strategy, management and development worldwide. Director, President and Chief Executive Officer of the AB Mutual Funds as of April 1, 2021. He is also a member of the Equitable Holdings Management Committee. Prior to joining the firm in 2021, he spent over 19 years with McKinsey, most recently as a senior partner and co-leader of its Wealth & Asset Management practice. In addition, he co-led McKinsey's Banking & Securities Solutions (a portfolio of data, analytics and digital assets and capabilities) globally. | 75 |  |

---

---

| | |
|:---|:---|
| **36 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INDEPENDENT DIRECTORS** | **INDEPENDENT DIRECTORS** | **INDEPENDENT DIRECTORS** | **INDEPENDENT DIRECTORS** |
| Gary L. Moody,<sup>##</sup>*Chairman of the Board*<br> 70<br>(2022) | Private Investor since prior to 2018. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for accounting, pricing, custody and reporting for the Fidelity mutual funds; and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He is a member of the Investment Company Institute's Board of Governors and the Independent Directors Council's Governing Council, where he serves as Chairman of its Governance Committee. He is Chairman of the AB Funds and Chairman of the Independent Directors Committees since January 2023 and he has served as a director or trustee, and as Chairman of the Audit Committees, of the AB Funds since 2008. | 75 |  |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 37** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INDEPENDENT DIRECTORS**<br> **(continued)** | **INDEPENDENT DIRECTORS**<br> **(continued)** |  |  |
| Jorge A. Bermudez,<sup>##</sup><br>71<br>(2022) | Private Investor since prior to 2018. Formerly, Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup's Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since January 2020. | 75 | Moody's Corporation since April 2011 and Chair of its Audit Committee since December 2022 |
| Michael J. Downey,<sup>##</sup>79<br> (2022) | Private Investor since prior to 2018. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2018 until January 2019. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities, Inc. He has served as a director or trustee of the AB Funds since 2005. | 75 |  |

---

---

| | |
|:---|:---|
| **38 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INDEPENDENT DIRECTORS**<br> **(continued)** | **INDEPENDENT DIRECTORS**<br> **(continued)** |  |  |
| Nancy P. Jacklin,<sup>##</sup>74<br>(2022) | Private Investor since prior to 2018. Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and has been Chair of the Governance and Nominating Committees of the AB Funds since August 2014. | 75 |  |
| Jeanette W. Loeb,<sup>##</sup><br>70 <br>(2022)  | Chief Executive Officer of PetCareRx (e-commerce pet pharmacy) from 2002 to 2011 and 2015 to present. Director of New York City Center since 2005. She was a director of AB Multi-Manager Alternative Fund, Inc. (fund of hedge funds) from 2012 to 2018. Formerly, affiliated with Goldman Sachs Group, Inc. (financial services) from 1977 to 1994, including as a partner thereof from 1986 to 1994. She has served as director or trustee of the AB Funds since April 2020. | 75 | Apollo Investment Corp. (business development company) since August 2011 |

---

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 39** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INDEPENDENT DIRECTORS**<br> **(continued)** | **INDEPENDENT DIRECTORS**<br> **(continued)** |  |  |
| Carol C. McMullen,<sup>##</sup><br> 67<br>(2022)<br>| Managing Director of Slalom Consulting (consulting) since 2014, private investor and a member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016. | 75 |  |

---

---

| | |
|:---|:---|
| **40 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**MANAGEMENT OF THE FUND** (continued)

---

| | | | |
|:---|:---|:---|:---|
| **NAME,**<br> **ADDRESS\*, AGE,<br>(YEAR FIRST ELECTED\*\*)** | **PRINCIPAL<br>OCCUPATION(S)<br>DURING PAST FIVE YEARS<br>AND OTHER INFORMATION\*\*\*** | **PORTFOLIOS<br>IN AB FUND<br>COMPLEX<br>OVERSEEN BY<br>DIRECTOR** | **OTHER**<br> **PUBLIC COMPANY**<br> **DIRECTORSHIPS<br>CURRENTLY<br>HELD BY**<br> **DIRECTOR** |
| **INDEPENDENT DIRECTORS**<br> **(continued)** | **INDEPENDENT DIRECTORS**<br> **(continued)** |  |  |
| Marshall C. Turner, Jr.,<sup>##</sup><br>81<br> (2022) | Private Investor since prior to 2018. Former Chairman and CEO of Dupont Photomasks, Inc. (semi-conductor manufacturing equipment). He was a Director of Xilinx, Inc. (programmable logic semi-conductors and adaptable, intelligent computing) from 2007 through August 2020, and is a former director of 33 other companies and organizations. He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the board of the George Lucas Educational Foundation. He has served as a director of one AB Fund since 1992, and director or trustee of all AB Funds since 2005. He has served as both Chairman of the AB Funds and Chairman of the Independent Directors Committees from 2014 through December 2022. | 75 |  |

---

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

\*\* There is no stated term of office for the Fund's Directors.

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

# Mr. Erzan is an "interested person" of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 41** |

---

------

**MANAGEMENT OF THE FUND** (continued)

**Officer Information** 

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

---

| | | |
|:---|:---|:---|
| **NAME, ADDRESS\*<br>AND AGE** | **POSITION(S)<br>HELD WITH FUND** | **PRINCIPAL OCCUPATION<br>DURING PAST FIVE YEARS\*\*** |
| Onur Erzan,<br>47 | President and Chief Executive Officer | See biography above. |
| Janaki Rao,<br>52 | Vice President | Senior Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. He is also Director of US Multi-Sector Fixed-Income Portfolios. |
| Matthew S. Sheridan,<br>47 | Vice President | Senior Vice President of the Adviser\*\*, with which he has been associated since prior to 2018. |
| Lucas Krupa,<br> 35 | Vice President | Senior Vice President of the Adviser\*\*, and Money Markets Associate on the Fixed Income Cash Management Team, with which he has been associated since prior to 2018. |
| Nancy E. Hay<br>50 | Secretary | Vice President and Counsel of the Adviser, with which she has been associated since prior to 2018 and Assistant Secretary of ABI\*\*. |
| Michael B. Reyes,<br>46 | Senior Vice President | Vice President of the Adviser,\*\* with which he has been associated since prior to 2018. |
| Joseph J. Mantineo,<br>63 | Treasurer and Chief Financial Officer | Senior Vice President of AllianceBernstein Investor Services, Inc. ("ABIS"),\*\* with which he has been associated since prior to 2018. |
| Stephen M. Woetzel,<br>51 | Controller | Senior Vice President of ABIS\*\*, with which he has been associated since prior to 2018. |
| Jennifer Friedland<br>48 | Chief Compliance Officer | Vice President of the Adviser\*\* since 2020 and Mutual Fund Chief Compliance Officer (of all Funds since January 2023 and of the ETF Funds since 2022). Before joining the Adviser\*\* in 2020, she was Chief Compliance Officer at WestEnd Advisors, LLC from prior to 2018 until 2019. |

---

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

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

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

---

| | |
|:---|:---|
| **42 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**Operation and Effectiveness of the Fund's Liquidity Risk Management Program:** 

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

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

Another requirement of the Liquidity Rule is for the Fund's Board of Trustees (the "Fund Board") to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the Fund's LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2022, which covered the period January 1, 2021 through December 31, 2021 (the "Program Reporting Period").

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

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

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

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

The Adviser informed the Fund Board that the Committee believes the Fund's LRMP is adequately designed, has been implemented as intended,

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 43** |

---

------

and has operated effectively since its inception. No material exceptions have been noted since the implementation of the LRMP. During the Program Reporting Period, liquidity in all markets was significantly recovered and improved compared to the prior reporting period which included extreme levels of price volatility and relative illiquidity beginning in March 2020 with COVID-19 impacts. As such, the program operated in a relatively robust and benign liquidity environment experienced in markets during the Program Reporting Period. There were no liquidity events that impacted the Fund or its ability to timely meet redemptions during the Program Reporting Period.

---

| | |
|:---|:---|
| **44 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**Information Regarding the Review and Approval of the Fund's Advisory Agreement** 

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

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

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 45** |

---

------

the exercise of their business judgment. The material factors and conclusions that formed the basis for the directors' determinations included the following:

**Nature, Extent and Quality of Services to be Provided** 

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

**Costs of Services to be Provided and Profitability** 

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

**Fall-Out Benefits** 

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

**Investment Results** 

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

---

| | |
|:---|:---|
| **46 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**Advisory Fees and Other Expenses** 

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

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 47** |

---

------

not place significant weight on them in their deliberations. The directors noted that the proposed unitary fee for the Fund covers additional services provided by third parties and thus is not directly comparable to the Adviser's institutional fee schedule and the schedule of fees for other funds advised by the Adviser.

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

**Economies of Scale** 

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

---

| | |
|:---|:---|
| **48 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

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

------

**AB FAMILY OF FUNDS** 

**US EQUITY** 

**CORE** 

Core Opportunities Fund

Select US Equity Portfolio

Sustainable US Thematic Portfolio

**GROWTH** 

Concentrated Growth Fund

Discovery Growth Fund

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

**VALUE** 

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

**INTERNATIONAL/ GLOBAL EQUITY** 

**CORE** 

Global Core Equity Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Sustainable International Thematic Fund

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

**GROWTH** 

Concentrated International Growth Portfolio

**VALUE** 

All China Equity Portfolio

International Value Fund

**FIXED INCOME** 

**MUNICIPAL** 

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

**TAXABLE** 

Bond Inflation Strategy

Global Bond Fund

High Income Fund

High Yield Portfolio

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Sustainable Thematic Credit Portfolio

Total Return Bond Portfolio

**ALTERNATIVES** 

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

**MULTI-ASSET** 

All Market Total Return Portfolio

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Sustainable Thematic Balanced Portfolio

**CLOSED-END FUNDS** 

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

**EXCHANGE-TRADED FUNDS** 

Tax-Aware Short Duration Municipal ETF

Ultra Short Income ETF

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

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

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 49** |

---

------

**NOTES** 

---

| | |
|:---|:---|
| **50 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

**NOTES** 

---

| | |
|:---|:---|
| **abfunds.com** | **AB ULTRA SHORT INCOME ETF <sup>\|</sup> 51** |

---

------

**NOTES** 

---

| | |
|:---|:---|
| **52 <sup>\|</sup> AB ULTRA SHORT INCOME ETF** | **abfunds.com** |

---

------

![LOGO](g366220g43p34.jpg)

AB ULTRA SHORT INCOME ETF

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

ETF01-USI-0151-1122 ![LOGO](g366220g22c48.jpg)

------

---

| | |
|:---|:---|
| **ITEM 2.** | **CODE OF ETHICS.**  |

---

(a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant's code of ethics is filed herewith as Exhibit 12(a)(1).

(b) During the period covered by this report, no material amendments were made to the provisions of the code of ethics adopted in 2(a) above.

(c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted.

---

| | |
|:---|:---|
| **ITEM 3.** | **AUDIT COMMITTEE FINANCIAL EXPERT.**  |

---

The registrant's Board of Directors has determined that independent directors Garry L. Moody, Marshall C. Turner, Jr. and Jorge A. Bermudez qualify as audit committee financial experts.

---

| | |
|:---|:---|
| **ITEM 4.** | **PRINCIPAL ACCOUNTANT FEES AND SERVICES.**  |

---

(a) - (c) The following table sets forth the aggregate fees billed by the independent registered public accounting firm Ernst & Young LLP, for the Fund's last two fiscal years for professional services rendered for: (i) the audit of the Fund's annual financial statements included in the Fund's annual report to stockholders; (ii) assurance and related services that are reasonably related to the performance of the audit of the Fund's financial statements and are not reported under (i), which include advice and education related to accounting and auditing issues and quarterly press release review (for those Funds which issue press releases), and preferred stock maintenance testing (for those Funds that issue preferred stock); and (iii) tax compliance, tax advice and tax return preparation.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | Audit Fees | Audit-Related<br>Fees | Tax Fees |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB Tax-Aware Short Duration Municipal ETF | 2022 | $23000 | $– $| 12000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB Ultra Short Income ETF | 2022 | $23000 | $– $| 12000 |

---

(d) Not applicable.

(e) (1) Beginning with audit and non-audit service contracts entered into on or after May 6, 2003, the Fund's Audit Committee policies and procedures require the pre-approval of all audit and non-audit services provided to the Fund by the Fund's independent registered public accounting firm. The Fund's Audit Committee policies and procedures also require pre-approval of all audit and non-audit services provided to the Adviser and Service Affiliates to the extent that these services are directly related to the operations or financial reporting of the Fund.

------

(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in the table under Item 4 (a) – (c) are for services pre-approved by the Fund's Audit Committee.

(f) Not applicable.

(g) The following table sets forth the aggregate non-audit services provided to the Fund, the Fund's Adviser and entities that control, are controlled by or under common control with the Adviser that provide ongoing services to the Fund:

---

| | | | |
|:---|:---|:---|:---|
|  | | All Fees for<br>Non-Audit Services<br>Provided to the<br>Portfolio, the Adviser<br>and Service Affiliates | Total Amount of<br>Foregoing Column Pre-<br>approved by the Audit<br>Committee<br>(Portion Comprised of<br>Audit Related Fees)<br>(Portion Comprised of<br>Tax Fees) |
|  AB Tax-Aware Short Duration Municipal ETF | 2022 | $1944458 | $12000 |
|  |  |  | $— |
|  |  |  | $(12000) |
|  AB Ultra Short Income ETF | 2022 | $1944458 | $12000 |
|  |  |  | $— |
|  |  |  | $(12000) |

---

(h) The Audit Committee of the Fund has considered whether the provision of any non-audit services not pre-approved by the Audit Committee provided by the Fund's independent registered public accounting firm to the Adviser and Service Affiliates is compatible with maintaining the auditor's independence.

---

| | |
|:---|:---|
| **ITEM 5.** | **AUDIT COMMITTEE OF LISTED REGISTRANTS.**  |

---

Not applicable to the registrant.

---

| | |
|:---|:---|
| **ITEM 6.** | **INVESTMENTS.**  |

---

Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.

---

| | |
|:---|:---|
| **ITEM 7.** | **DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.**  |

---

Not applicable to the registrant.

------

---

| | |
|:---|:---|
| **ITEM 8.** | **PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.**  |

---

Not applicable to the registrant.

---

| | |
|:---|:---|
| **ITEM 9.** | **PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.**  |

---

Not applicable to the registrant.

---

| | |
|:---|:---|
| **ITEM 10.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**  |

---

There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund's Board of Directors since the Fund last provided disclosure in response to this item.

---

| | |
|:---|:---|
| **ITEM** | **11. CONTROLS AND PROCEDURES**.  |

---

(a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no changes in the registrant's internal controls over financial reporting that occurred during the period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| **ITEM 12.** | **DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.**  |

---

Not applicable to the registrant.

------

---

| | |
|:---|:---|
| **ITEM 13.** | **EXHIBITS.**  |

---

The following exhibits are attached to this Form N-CSR:

---

| | |
|:---|:---|
| EXHIBIT NO. | DESCRIPTION OF EXHIBIT |
|  12 (a) (1) | [Code of Ethics that is subject to the disclosure of Item 2 hereof](d412809dex99codeeth.htm) |
|  12 (b) (1) | [Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](d412809dex99cert.htm) |
|  12 (b) (2) | [Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](d412809dex99cert.htm) |
|  12 (c) | [Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](d412809dex99906cert.htm) |

---

------

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): AB Active ETFs, Inc.

---

| | |
|:---|:---|
|  By: | /s/ Onur Erzan |
|  | Onur Erzan |
|  | President |

---

Date: January 27, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
|  By: | /s/ Onur Erzan |
|  | Onur Erzan |
|  | President |
|  Date: | January 27, 2023 |
|  By: | /s/ Joseph J. Mantineo |
|  | Joseph J. Mantineo |
|  | Treasurer and Chief Financial Officer |
|  Date: | January 27, 2023 |

---

## Ex-99.Code

Exhibit 12(a) (1)

**CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS** 

**I.** **Covered Officers/Purpose of the Code** 

The AllianceBernstein Mutual Fund Complex's code of ethics (this "Code") for the investment companies within the complex (collectively, the "Funds" and each, a "Company") applies to each Company's Principal Executive Officer, Principal Financial and Accounting Officer and Controller (the "Covered Officers," each of whom is set forth in Exhibit A) for the purpose of promoting:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between
personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with,
or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company;

• compliance with applicable laws and governmental rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the
Code; and

• accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

**II.** **Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest** 

**Overview**. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company. For the purposes of this Code, members of the Covered Officer's family include his or her spouse, children, stepchildren, financial dependents, parents and stepparents.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The Company's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

------

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Company's Board of Directors or Trustees (the "Directors") that the Covered Officers may also be officers or employees of one or more of the other Funds or of other investment companies covered by this or other codes.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company.

Each Covered Officer must:

• not use his personal influence or personal relationships improperly to influence investment decisions or
financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company;

• not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered
Officer rather than the benefit of the Company;

• not use material non-public knowledge of portfolio transactions made or
contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions;

------

There are some conflict of interest situations, whether involving a Covered Officer directly or a member of his family, that should always be discussed with the General Counsel of Alliance Capital Management L.P. (the "General Counsel"), if material. Examples of these include:

• service as a director on the board of directors or trustees of any public or private company (other than a not-for-profit organization);

• the receipt of any non-nominal gifts;

• the receipt of any entertainment from any company with which the Company has current or prospective business
dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

• any ownership interest in, or any consulting or employment relationship with, any of the Company's service
providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof;

• a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for
effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership.

**III.** **Disclosure and Compliance** 

• Each Covered Officer should familiarize himself with the disclosure requirements and disclosure controls and
procedures generally applicable to the Company;

• each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company
to others, whether within or outside the Company, including to the Company's directors and auditors, and to governmental regulators and self-regulatory organizations;

• each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other
officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made
by the Funds; and

------

• it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions
imposed by applicable laws, rules and regulations.

**IV.** **Reporting and Accountability** 

Each Covered Officer must:

• upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to
the General Counsel that he has received, read, and understands the Code;

• annually thereafter affirm to the General Counsel that he has complied with the requirements of the Code;

• complete at least annually a questionnaire relating to affiliations or other relationships that may give rise to
conflicts of interest;

• not retaliate against any other Covered Officer or any employee of the Company or their affiliated persons for
reports of potential violations that are made in good faith; and

• notify the General Counsel promptly if he knows of any violation of this Code. Failure to do so is itself a
violation of this Code.

The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, waivers sought by a Covered Officer will be considered by the Company's Audit Committee (the "Committee").

The Company will follow these procedures in investigating and enforcing this Code:

• the General Counsel will take all appropriate action to investigate any potential violations reported to him;

• if, after such investigation, the General Counsel believes that no material violation has occurred, the General
Counsel is not required to take any further action;

• any matter that the General Counsel believes is a material violation will be reported to the Committee;

• if the Committee concurs that a material violation has occurred, it will inform and make a recommendation to the
Directors, who will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to
dismiss the Covered Officer;

• the Committee will be responsible for granting waivers, as appropriate; and

• any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

------

**V.** **Other Policies and Procedures** 

This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Company, the Company's adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, it is understood that this Code is in all respects separate and apart from, and operates independently of, any such policies and procedures. In particular, the Company's and its investment adviser's and principal underwriter's codes of ethics under Rule 17j-l under the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not part of this Code.

**VI.** **Amendments** 

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Directors, including a majority of independent directors.

**VII.** **Confidentiality** 

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Directors, the investment adviser, their counsel, counsel to the Company and, if deemed appropriate by the Directors of the Company, to the Directors of the other Funds.

**VIII.** **Internal Use** 

The Code is intended solely for internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion.

Date: July 22, 2003, as amended March 17, 2004

------

Exhibit A

<u>Persons Covered by this Code of Ethics</u> 

Principal Executive Officer

Principal Financial and Accounting Officer

Controller

## Ex-99.Cert

**Exhibit 12(b)(1)** 

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER** 

I, Onur Erzan, President of AB Active ETFs, Inc., certify that:

1. I have reviewed this report on Form N-CSR of AB Active ETFs, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that
occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

------

5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 27, 2023

---

| |
|:---|
| /s/ Onur Erzan |
| Onur Erzan |
| President |

---

------

**Exhibit 12(b)(2)** 

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER** 

I, Joseph J. Mantineo, Treasurer and Chief Financial Officer of AB Active ETFs, Inc., certify that:

1. I have reviewed this report on Form N-CSR of AB Active ETFs, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that
occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

------

5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information ; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 27, 2023

---

| |
|:---|
| /s/ Joseph J. Mantineo |
| Joseph J. Mantineo |
| Treasurer and Chief Financial Officer |

---

## Exhibit 99.906

**EXHIBIT 12(c)** 

**CERTIFICATION PURSUANT TO SECTION 906 OF THE** 

**SARBANES-OXLEY ACT** 

Pursuant to 18 U.S.C. 1350, each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of AB Active ETFs, Inc., (the "Registrant"), hereby certifies that the Registrant's report on Form N-CSR for the period ended November 30, 2022 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: January 27, 2023

---

| | |
|:---|:---|
|  By: | /s/ Onur Erzan |
|  | Onur Erzan |
|  | President |
|  By: | /s/ Joseph J. Mantineo |
|  | Joseph J. Mantineo |
|  | Treasurer and Chief Financial Officer |

---

This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.