AllianceBernstein launches emerging markets active ETF

AllianceBernstein (AB) has launched an active emerging market ETF on TMX Australia, expanding its local exchange traded offering and giving investors access to it Strategic Core equities strategy.

The AB Emerging Markets Strategic Core Equities Funds- Active ETF, trading under the ticker MORE, is built around a strategy designed to capture the long-term growth potential of emerging markets while limiting downside risk.

The Strategy Core framework was launched in 2012 and has been managed since inception by head of emerging markets equities Sammy Suzuki, alongside co-chief investment officer Densie Boynton.

The strategy targets around 90% of market upside and approximately 70% of downside over the long-term, using fundamental research and quantitative risk management to identify companies with stronger quality and stability characteristics, AB said.

AB managing direction of the Australian client group Ben Moore said the launch formed part of the firm's broader push to expand its active ETF platform.

"The build-out of our active ETF platform remains a key plank in our Australian distribution strategy. Following the listing of our Global Strategic Core Equities ETF earlier this year, adding an emerging markets strategy gives investors another high-quality, actively managed building block in a convenient, transparent and liquid vehicle," Moore said.

Moore said emerging markets represented a significant long-term growth opportunity despite continued investor concerns around volatility and drawdowns.

Suzuki said the investment case for emerging markets had broadened beyond its traditional association with China.

"Emerging markets are no longer simply a China story," Suzuki said.

"Economies now drive the majority of global GDP expansion, and that growth is often available at a meaningful valuation discount, supported by stronger balance sheets, deeper capital markets and improved governance. EM is also a key part of the AI opportunity, a theme too often viewed through a developed-market lens alone."

Suzuki also pointed to the region's role in the development of artificial intelligence, arguing the investment opportunity was often viewed too narrowly through developed markets.

The strategy applies AB's 'quantamental' approach, combing fundamental research with quantitative risk management.

"Our philosophy is built on quality, stability and price," Suzuki said.

"That is how we seek to beat the market by losing less, giving investors a smoother path to participate in emerging-markets growth over the long run. We call this winning by not losing."