AllianceBernstein unveils two active short-duration bond ETFs

Jun 14th, 2024 | By | Category: Latest news

AllianceBernstein has converted two of its mutual funds into actively managed fixed income ETFs providing short-duration exposure to various bond markets.

Noel Archard, Global Head of ETFs and Portfolio Solutions at AllianceBernstein

Noel Archard, Global Head of ETFs and Portfolio Solutions at AllianceBernstein.

Listed on NYSE Arca, the AB Short Duration Income ETF (SDFI US) and AB Short Duration High Yield ETF (SYFI US) have come to market with AUM of $100 million and $670m, respectively.

SDFI uses a short-duration, multi-sector strategy focusing on investment-grade assets. It aims to generate high income and maximize risk-adjusted returns while offering attractive upside and downside capture compared to core bond strategies. The fund invests at least 65% in investment-grade securities, such as corporate bonds, securitized assets, and government bonds, with up to 35% in below-investment-grade bonds. It typically maintains an average duration of less than three years and has an expense ratio of 0.30%.

SYFI combines bottom-up fundamental research with quantitative analysis to achieve better outcomes, avoiding over 75% of US high-yield defaults since inception. It aims to provide high-yield exposure while reducing volatility and default risk. The fund dynamically manages risk based on the credit cycle to outperform the benchmark, focusing on selecting the best credits for long-term success. It typically maintains an average duration of less than four years and has an expense ratio of 0.40%.

Noel Archard, Global Head of ETFs and Portfolio Solutions at AllianceBernstein, commented: “When you observe the ETF market and the spectrum of investors in this space, you can see how active ETFs have really started to take root. We’re excited to provide new ways for our clients to access allocation-friendly exposures in their portfolios.”

Scott DiMaggio, Head of Fixed Income at AllianceBernstein, added: “Today’s launch demonstrates AllianceBernstein’s robust global fixed income business, adding additional building blocks for efficient income. These conversion products offer a wrapper that is investment-model friendly, and we believe they will ultimately fit into client portfolios in multiple economic cycles.”

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