AB Managed Volatility Equities—Green
(Green MVE)

Seeking Positive Outcomes for a Better Tomorrow

Green MVE aims to have a positive impact on the environment by targeting a carbon–neutral portfolio while also seeking to deliver attractive investment returns for equity investors.

Investment Approach

Low-Volatility Stocks

The portfolio is anchored in low-volatility equities, as they represent typically low–carbon emitters. * Their potential to reduce downside portfolio risk may help deliver attractive investment returns over time.

High Volatility Sectors are Typically Carbon Intensive High Volatility Sectors are Typically Carbon Intensive

Assigning a Cost to Carbon

There is a growing belief that putting a cost on carbon is an efficient way to attain greener outcomes.

"One of the strongest levers we have to shift financing toward climate action is putting a price on carbon."
— World Bank, May 29, 2017

"BHP Billiton has backed 'a price on carbon emissions' as part of its submission to the Finkel Review of Australia's energy system."
— BHP Billiton, March 3, 2017

Green Alpha

Redefining success as the performance of a carbon–neutral portfolio.

Offsetting Emissions

We engage third parties to facilitate the retirement of carbon credits.

Carbon credits are an important step in the process of offsetting carbon emissions, and typically represent investments made in projects designed to mitigate or repair environmental damage caused by carbon emissions. Some carbon credits are created and certified by applicable regulators and/or accreditation bodies and can be made available to companies or other entities that wish, or are required, to use the carbon credits against their own carbon emissions. In such instances, the carbon credits are retired by the registry organisation so they can’t be used again.

The Babinda Reef Project is a carbon offset initiative managed by Qantas Future Planet.

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Corporate Engagement

We engage with a discrete set of portfolio companies on the cost of their emissions.

Why Invest?

Toward a Carbon–Neutral Portfolio

Since its inception in 2014, the AB Managed Volatility Equities investment strategy, on which Green MVE is based, has had, on average, 25% of the emissions of the index associated with the portfolio’s holdings.*

Combining this with its commitment to reduce the carbon emissions of its portfolio holdings by engaging third parties to retire carbon credits, Green MVE has the potential to be a carbon–neutral portfolio.

*Average carbon gas emissions for AB Managed Volatility Equities relative to S&P/ASX 200, as of March 31, 2018

Downside Protection

Green MVE’s downside protection objective makes it possible to seek equity market–like returns with less risk, by forgoing some upside when markets rise, and reducing the downside when markets fall.

Changing Corporate Behaviour

By assigning an explicit cost to carbon and engaging with companies on the cost of their carbon emissions, we can send a message to corporations on climate risk and potentially encourage them to adopt more climate-friendly behaviour.

Investment Objective

Green MVE aims to achieve returns that exceed the S&P/ASX 300 Accumulation Index after fees over the medium to long term, and to reduce the carbon emissions associated with its portfolio holdings.

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What Do We Mean by "Green"?

In an investment context, the word “green” is often loosely used to denote any strategy that is intended to be environmentally friendly or aligned with environmental, social and governance (ESG) objectives or sustainable–development goals. In the case of Green MVE, the word “green” refers to a specific and highly differentiated investment approach developed by AllianceBernstein in seeking to deliver positive outcomes for the environment and equity investors.

This approach can be summarised as: combining an active investment strategy with a focus on encouraging a reduction in carbon emissions.

There is no universal definition of what constitutes a “green” outcome. Please refer to AB’s Approach to Carbon Neutral.

Contact Us for More Information

Brad Karp, Managing Director

Brad Karp

Managing Director
Australia Client Group
(03) 8630 2232

Jeremy Browne, Managing Director

Jeremy Browne

Managing Director
Australia Client Group
(02) 9255 1230

Brad Karp, Managing Director

Mark Williams

Managing Director
Asia Pacific Consultant Relations
(02) 9255 1271

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