Alliance Bernstein has launched a multi-asset class fund focused on emerging markets, as investors seek to diversify growth market exposure away from primarily equities.
Research consistently finds an under-allocation to emerging markets, compared to the MSCI benchmark’s approximate 12%, by both retail and institutional investors.
Alliance Bernstein said “those looking to resolve this through equities alone may find they also have to bear increased overall portfolio risk”.
Its fund will target equity-like returns by investing across asset classes in developing markets, from shares to debt including high-yield securities, and currencies.
The manager said the approach will “allow the fund to capture the return potential of emerging market equities, with lower volatility and meaningful downside protection”.
Morgan Harting, a senior portfolio manager and emerging markets multi-asset team leader (pictured), said: “Emerging markets represent a considerable – and growing – proportion of the world economy, and offer significant return potential.
“However, traditional all-equity approaches are not best designed to minimise unwanted surprises. [Our portfolio] will aim to capture these investment opportunities whilst seeking to reduce undesirable volatility and offer an optimal risk/return profile unconstrained by naïve benchmarks or investment instruments.”
Multi-asset, discretionary allocation funds have proved popular this year. Most net flows into Pimco’s funds this year have gone to funds with an element of asset allocation.
DWS Investments also highlighted its capabilities in the strategy at a recent client event.
Lazard is understood to be planning the opening of a multi-asset allocation product to external investors.