A managed volatility equities strategy, which has outperformed its benchmark by 11.8% after fees and including franking credits* since inception just over a year ago, is now available to retail investors, global asset manager AllianceBernstein (AB) announced today.
The AllianceBernstein Managed Volatility Equities Fund—which produced a total (net of fees) fund return of 26.6% in its first year—has been added to the BT Wrap and HUB24 investment platforms. The Fund has a ‘Recommended’ rating from Lonsec.
“This Fund is a response to client concerns to meet the needs of investors, particularly those in or near retirement, by balancing the desire to participate in equity-market growth while cushioning the impact of market downturns,” said Jen Driscoll, Chief Executive Officer of AB in Australia.
“We’re therefore very excited to be offering this opportunity to the adviser community and the broader retail investment market.
“While past performance is no predictor of future results, the Managed Volatility Equities Fund has achieved excellent returns by doing what it’s supposed to do—smoothing the ride for investors during periods of market volatility.”
Roy Maslen, Chief Investment Officer—Australian Equities, said: “In the past year, the Fund’s best relative returns have been during months when the index fell sharply, but the Fund fell significantly less, resulting in a higher return overall at a lower volatility.”
Volatility for the Fund from inception at March 31, 2014, to March 31, 2015, was 30% less on a daily basis than that of the FTSE ASFA Australia 300 Index—Tax Exempt, after including franking credits.
The Fund, which charges a management fee of 0.55%, invests primarily in Australian equities and is designed for investors seeking lower volatility, reduced downside risk in falling equity markets, the potential for long-term capital growth and some income, including franked Australian dividend income.
It aims to reduce volatility by identifying, and investing in, high-quality listed equity securities which have reasonable valuations, high-quality cash flows and relatively stable share prices.
While likely to lag a rising market, the Fund is expected to benefit from the so-called “low-volatility paradox”—a well-researched and well-documented phenomenon in which low-volatility stocks tend to outperform higher-volatility stocks on a risk-adjusted basis over time.
Driscoll noted that other recent AB activity in the Australian retail market included the addition of the AllianceBernstein Global High Income Fund to the HUB24 platform.
For a full description of the Managed Volatility Equity Fund’s features, benefits and risks please refer to the AllianceBernstein Managed Volatility Equities Fund Product Disclosure Statement.
Source: AB
