AllianceBernstein today launched its first ETFs, debuting two actively managed fixed income offerings to investors.
The AB Ultra Short Income ETF (YEAR) and the AB Tax-Aware Short Duration Municipal ETF (TAFI) were listed September 14 on the NYSE. The firm said in a statement that it has prioritized fixed income solutions for the firm’s first launch, citing client preference and needs on short-duration yield-generating solutions in the current rising rate environment.
Global trading firm Jane Street will be the lead market maker on both products and will bring extensive industry experience and pricing expertise to AB’s ETFs.
“AB is the latest well-established asset manager to enter the ETF market with active fixed income ETFs but is positioned to grow given its strong brand with advisors and its focus on popular short-term bond funds,” Todd Rosenbluth, head of research at VettaFi, said. “However, they will need to educate advisors on how their approach is different than firms like JPMorgan, PIMCO, and others.”
YEAR seeks to provide current income, consistent with preservation of capital. The ETF aims to deliver higher levels of yield relative to cash or cash-like investments, while aiming for capital preservation in all market cycles, according to a statement from the firm.
TAFI, a municipal bond strategy, seeks to provide relative stability of principal and a moderate rate of after-tax return and income. The ETF offers municipal bond investors a distinct complement to their core allocations, providing the opportunity to help maximize after-tax income and returns using shorter-maturity bonds and opportunistic exposure to Treasuries and taxable bonds.
Noel Archard, global head of ETFs and portfolio solutions at AB, said in a statement that the firm will build upon the momentum from its first set of ETFs to deliver an ETF lineup over time, which will reflect AB’s longstanding commitment to research excellence, investment discipline, and its clients. The firm’s intent for its ETF business is to expand globally among multiple asset classes.
AB hired Archard in February for his current role as global head of ETFs and portfolio solutions. Archard, who joined the firm from State Street Global Advisors, is responsible for bringing AB’s set of investment capabilities to the ETF marketplace. AB has continued to bolster its ETF efforts with the addition of Anita Rausch as global head of ETF capital markets, Julie Gunts, an AB veteran leading global strategy & partnerships, Brett Sheely as head of ETF specialists, and Jason Thalmann as ETF operations manager, the firm said in a statement.
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