Quality
Companies that typically have high profitability and durable competitive advantages
A new approach to risk
Understanding the relationship between risk and return has always been a fundamental investment principle. But what if the principle of “more risk = more return” wasn’t always true? What if a core part of your clients’ portfolios could be a fund that offered the potential for less risk but more return?
Is it time to strengthen your core with AB’s Global Strategic Core Equities Fund?
Timing the Market Means Getting out and Getting Back In
Past performance is no guarantee of future results. Annualised trailing 3-year daily returns of S&P 500 and trailing 3 years daily returns where the best 5-days are excluded are calculated every business day from Jan 1991 (trailing 3 years goes back to Jan 1988) to end March 2025. The average of these returns is then calculated to give the results in the chart
As of March 31, 2025
Source: Bloomberg, Lipper, S&P and AllianceBernstein (AB)
When markets turn, investors can be tempted to run for the exits. But history teaches us that this approach can be expensive. As the chart shows, missing the best 5 days of the S&P 500 over a given timeframe can significantly reduce your overall return.
With a portfolio that falls less than the market during downturns, the pain of losses is lessened, making it easier for your clients to stick with their investments through turbulent times.
Stabilise Your Core
Imagine a hypothetical global stock portfolio that captured 90% of every market rally and fell only 70% as much as the market during a sell off. What would the long-term returns of this portfolio look like? As the graph below illustrates $100 invested in this portfolio since 1986 would have built up more than $6,600 in capital and delivered a smoother ride through the ups and downs of the market. That’s approximately 2.8 times more capital than that generated by the MSCI World Index.
How We Believe Investors Can Reduce Losses in Downturns and Still Beat the Market
Past performance does not guarantee future results. Returns shown are for illustrative purposes only and are not representative of any AB fund. It is not possible to invest in an index.
*Performance calculated by multiplying all positive monthly returns (0% or greater) of the MSCI World Index by 90% and all negative returns (less than 0%) by 70%; shown in logarithmic scale
†Annualised standard deviation
Data from March 31, 1986 (inception date of MSCI World Index) through March 31, 2025
As of March 31, 2025
Source: MSCI and AB
Quality, Stability and Price are the key
The secret to delivering on the 90/70 potential lies in finding quality stocks with stable trading patterns and attractive prices. We call it our QSP approach.
When carefully selected, stocks like these can create a portfolio with resilience in down markets and solid growth potential in up markets. By using this strategy, investors are more likely to maintain a core strategic allocation to equities through turbulent times, improving their chances of meeting their long-term goals.
For the past 10 years, our universe of QSP stocks delivered returns of 2% on average in falling markets, compared to the MSCI World which fell by - 7.5% on average. In modestly rising markets, QSP stocks advanced by 9.9% - more than double the broader market.
In a Volatile World, the Pattern of Returns Matters More
Past performance does not guarantee future results.
QSP returns are for the quintile of developed global stocks with the highest Strategic Core Edge. Strategic Core Edge is the expected return from a proprietary model combining a number of quality, stability and price factors, with a ratio of approximately one-third for each quality, stability and price component.
Return buckets are based on returns for MSCI World Index.
As of March 31, 2025
Source: MSCI and AB
Stability
Stocks of lower-risk companies with predictable earnings streams often have steadier trading patterns
Price
Attractive valuations are essential; overpaying for downside mitigation can be counterproductive
Learn More About the Fund
Understanding the AB Global Strategic Core Equities Fund
Meet the Manager
Related Insights
AllianceBernstein Investment Management Australia Limited (ABN 58 007 212 606, AFSL 230 683) (“ABIMAL”) is the responsible entity of the AB Global Strategic Core Equities Fund (ARSN 680 787 535) (“Fund”) and is the issuer of units in the Fund. ABIMAL has appointed AllianceBernstein Australia Limited (ABN 53 095 022 718, AFSL 230 698) (“ABAL”) as the investment manager of the Fund. ABAL in turn has delegated a portion of the investment manager function to AllianceBernstein L.P. The Fund’s Product Disclosure Statement (“PDS”) is available at www.alliancebernstein.com.au or by contacting the client services team at ABAL at (02) 9255 1299. Investors should consider the PDS in deciding to acquire, or continue to hold, units in the Fund.
This information is for exclusive use of the wholesale person to whom it is provided and is not to be relied upon by any other person. It is not intended for retail or public use and may not be further distributed without the prior written consent of ABAL.
A Target Market Determination (“TMD”) for the Fund is available from our website. The TMD sets out the class of persons who comprise the target market for the Fund and the distribution conditions that are applicable, together with a number of other matters which should be considered by retail investors and their advisers.
Information, forecasts and opinions ("Information") set out on this website are not personal advice and have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither the website nor the Information contained in it is intended to take the place of professional advice. Please note that past performance is not indicative of future performance, and projections, although based on current Information, may not be realised. Information can change without notice, and neither ABIMAL or ABAL guarantees the accuracy of the Information at any particular time. Although care has been exercised in compiling the Information contained on this website, neither ABIMAL or ABAL warrants that this document is free from errors, inaccuracies or omissions.
This document is released by ABAL.