AllianceBernstein debuts two active short-duration bond ETFs

Sep 21st, 2022 | By | Category: Fixed Income

Global asset manager AllianceBernstein has made its ETF debut with the launch of two actively managed fixed income strategies.

Seth Bernstein, President and CEO of AllianceBernstein

Seth Bernstein, President and CEO of AllianceBernstein.

The AB Ultra Short Income ETF (YEAR US) and AB Tax-Aware Short Duration Municipal ETF (TAFI US) have been listed on NYSE Arca.

Seth Bernstein, President and CEO of AllianceBernstein, said: “For over 50 years, AllianceBernstein has remained committed to innovation and growth, continuously providing investment solutions and capabilities to help meet expanding client needs.

“Launching our first of many active ETFs is a milestone in our firm’s history and a testament to not only our talented team of professionals but the thoughtfulness of our unique investment strategy and dedication to our clients.”

Noel Archard, Global Head of ETFs and Portfolio Solutions at AllianceBernstein, added: “Our first set of actively managed fixed income ETFs draws on AllianceBernstein’s deep research and expertise across both taxable and non-taxable fixed income. We will build upon this momentum to deliver an ETF line-up over time, reflecting our longstanding commitment to research excellence, investment discipline, and our clients.”

According to AllianceBernstein, the firm prioritized fixed income ETFs for its first launch given client preference and needs for short-duration yield-generating solutions in the current rising rate environment.

The AB Ultra Short Income ETF aims to deliver higher levels of yield relative to cash or cash-like investments while aiming for capital preservation in all market cycles. The fund invests primarily in investment-grade instruments with a duration of less than one year. Eligible security types include Treasuries, corporate bonds, repurchase agreements, and money-market funds such as commercial paper and certificates of deposit. The ETF comes with an expense ratio of 0.25%

The AB Tax-Aware Short Duration Municipal ETF, meanwhile, offers municipal bond investors a distinct complement to their core allocations, providing the opportunity to maximize after-tax income while managing interest-rate exposure by targeting a portfolio duration between one and three years. The fund maintains at least an 80% allocation to municipal credit at all times; however, it has the ability to invest in lower-rated munis as well as corporate bonds in a bid to enhance returns. The ETF’s expense ratio is 0.27%.

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