Noel Archard, global head of ETFs and portfolio solutions at AllianceBernstein, told NYSE’s Judy Shaw at Exchange 2023 that AB is “focused a lot on income, because that’s an evergreen topic that our clients are very interested” in, especially when they’re looking at fixed income products “and what’s going on in the marketplace.”
AB recently entered the ETF space in September with the launch of two actively managed fixed income funds, the (YEAR ) and the (TAFI ).
“With our first two products issued, we focused on the fixed income arena, because we thought that’s an area that we’ve got some particular experience in,” Archard said in an interview with “ETF Leaders, Powered by the New York Stock Exchange.”
AB launched YEAR because the firm “wanted to have a real focus on that short end of the curve” last year when interest rates were “being pushed higher and higher,” so Archard said, “being able to shorten up duration but take advantage of that yield increase was really important for our clients.”
Archard explained that with all the confusion out there about what the Federal Reserve will do about raising rates going forward, combined with “people that are worried about recession,” while “also looking at pretty strong employment numbers … it makes hovering at that short end of the curve where you can get a little bit of yield with a little bit more stability in the price attractive.”
The logic behind AB’s short-duration tax-aware muni product TAFI was also to offer clients “a little bit shorter duration but a little bit of that control,” Archard said, adding that “it’s not only about what you generate in portfolio returns, but what do you keep.”
“So, that product fits neatly into that same theme of, ‘Let’s focus on that short end of the curve income generation and certainly with a tax-aware approach,’” he said.
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