In some countries, the traditional anniversary gift for a relationship that’s been going for four years is an item of silk. At AllianceBernstein, we’re celebrating the fourth anniversary of the AB Managed Volatility Equities Fund (MVE), and the opportunity to indulge in bad silk puns is too hard to resist.
First thing to note, the Fund’s performance hasn’t exactly been “silky smooth”―but then, neither has the market’s. Look closely at the display below, however, and you’ll see that, most of the time[1], the Fund has performed a lot better than the market during drawdowns, by falling a lot less.
That’s because an objective of the Fund’s design is to give investors a softer landing when things go south―as though part of their portfolios has been lined with parachute silk (sorry).
But that’s not all: while the fund aims to lose less than the market when the market falls, it also aims to capture as much of the upside as possible when the market recovers.
You can see how this works from the display below.
Give or take, the Fund aims to participate in no more than 50% of any fall in the market and up to 80% of any recovery (based on monthly returns). We think it’s a good strategy for today’s volatile markets, because it may help investors―including retirees, who are particularly sensitive to volatility―to hang on to more of their capital while achieving good rates of growth.
It’s done so to the extent that, over the last four years, the Fund’s performance has beaten the market’s by a long way….
That’s what we call a silky finish.
If you would like further information about the AB Managed Volatility Equities Fund, please do not hesitate to contact us at the number or email address below.
1The Fund fell more than the market in late 2016 through early 2017 because financials and resources, in which the Fund is underweight, benefited from unusually strong, short-term tailwinds (respectively, the election of Donald Trump as US president and positive but unsustainable dynamics in commodity markets).
Ben Moore
Director – Australia Client Group
0439 988 839
Steve Nguyen
Regional Manager, Retail – Vic/ Tas/ SA
0400 098 580
Past performance does not guarantee future results. This information is for the exclusive use of the wholesale person to whom it is provided and is not to be relied upon by any other person.
DISCLOSURE
The inception date of the AB Managed Volatility Equities Fund (“Fund”) was March 31, 2014. The returns shown here are net of fees and costs and do not allow for tax or inflation. The return includes an adjustment for franking credits. Performance is calculated using the relevant end of month Exit Prices and assumes that income is re-invested and that the investment is held for the full period. Accrued franking credits are calculated by dividing the total franking credits expected to be received for a given month, by the Fund’s average net assets for that month. Reported franking credit returns will differ from an investor's actual returns due to the calculation methodology described above and because franking credits are only realised upon lodgement of a tax return after 30 June each year. We will provide additional performance calculations for the financial year that includes the effect of franking credits consistent with the Financial Services Council guidance after 30 June each year. Franking credits are included in the calculation of the Relative Returns to allow a comparison with the Fund's franking credit-adjusted Benchmark. The information above may change in the event of error. Numbers may not sum due to rounding. The performance figures are historical and past performance is not necessarily an indication of future performance. See https://web.alliancebernstein.com/funds/au/equity/managed-volatility-equities.htm for further details
INFORMATION ABOUT THE AB MANAGED VOLATILITY EQUITIES FUND
AllianceBernstein Investment Management Australia Limited (ABN 58 007 212 606, AFSL 230 683) (“ABIMAL”) is the responsible entity of the AllianceBernstein Managed Volatility Equities Fund (ARSN 099 739 447) (“Fund” or “AB Managed Volatility Equities Fund”) and is the issuer of units in the Fund. AllianceBernstein Australia Limited (“ABAL”) ABN 53 095 022 718, AFSL 230 698 is the investment manager of the Fund. ABAL in turn has delegated a portion of the investment manager function to AllianceBernstein L.P.(“AB”). The Fund’s Product Disclosure Statement (“PDS”) is available at the following link https://web.alliancebernstein.com/funds/au/equity/managed-volatility-equities.htm or by contacting the client services team at AllianceBernstein Australia Limited at (02) 9255 1299. Investors should consider the PDS in deciding to acquire, or continue to hold, units in the Fund. Information, forecasts and opinions set out in this document are not personal advice and have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this document nor the information contained in it are intended to take the place of professional advice. Please note that past performance is not indicative of future performance and projections, although based on current information, may not be realised. Information, forecasts and opinions can change without notice and neither ABIMAL or ABAL guarantees the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained in this report, neither ABIMAL or ABAL warrants that this document is free from errors, inaccuracies or omissions.
DISCLAIMER
This document is provided solely for informational purposes and is not an offer to buy or sell securities. The information, forecasts and opinions set out in this document have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this document nor the information contained in it are intended to take the place of professional advice. You should not take action on specific issues based on the information contained in the attached without first obtaining professional advice. The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Current analysis does not guarantee future results.
INFORMATION ABOUT ALLIANCEBERNSTEIN
AllianceBernstein (AB) is a leading global investment management and research firm. We bring together a wide range of insights, expertise and innovations to advance the interests of our institutional investors, individuals and private clients in major world markets. AB offers a comprehensive range of research, portfolio management, wealth management and client-service offices around the world, reflecting our global capabilities and the needs of our clients. As at March 31, 2018, our firm managed US$549 billion in assets, including US$265 billion on behalf of institutions. These include pension plans, superannuation schemes, charities, insurance companies, central banks, and governments in more than 45 countries. We’re truly global, but we’re not just portfolio managers and analysts in one location investing globally. We have an extensive global footprint that we’ve built over four decades. Our global teams collaborate across asset classes and investment strategies to spark new thinking and deliver superior outcomes for our clients. Every day brings a new set of investment challenges and opportunities. Through our unique combination of expertise, innovative offerings and global reach, we anticipate and advance what’s next—applying collective insights to help keep our clients at the forefront of change. This document is released by AllianceBernstein Australia Limited (“ABAL”) ABN 53 095 022 718, AFSL 230 698. AllianceBernstein Australia Limited (ABAL) is a wholly owned subsidiary of the AllianceBernstein, L.P. Group (AB).