Helping Clients Navigate a Rough Ride
For much of the last decade equity markets were calm and predictable. Today's environment is more like an off-road trail with uneven surfaces, sudden drops and unexpected hurdles that can throw even the most experienced riders off balance.
Persistent inflation, shifting interest-rate cycles, geopolitical tensions and rapid technological change mean investors are now riding a rougher terrain. And looking ahead, it appears that market uncertainty could become a permanent feature, rather than a temporary disruption.
In these conditions, advisers and clients are increasingly looking for equity strategies that prioritise stability, resilience and capital protection. That's where defensive equities come in.
At AllianceBernstein, we've spent more than a decade refining defensive equitiy solutions designed to help investors stay invested, reduce downside risk, and capture long-term equity returns with less stress along the way.
Support for Financial Advisers
Periods of uncertainty are when advisers add the most value.
When the road becomes rocky, clients need someone who can:
- provide calm, evidence-based guidance
- help them avoid emotional decision making
- keep portfolios aligned with long-term goals
Defensive equity strategies can support these conversations by offering a smoother, more predictable investment experience. And help your clients stay the course, even when markets become challenging.
Defensive Strategies for the Road Ahead
Designed to provide a smoother ride
The AB Managed Volatility Equities Fund - MVE Class - Active ETF is built specifically for investors who want equity exposure without the full force of market swings.
The strategy aims to:
- fall only half as much as the market on down days
- participate in around 80% of the upside on strong days
- invest in high-quality, stable businesses with resilient cashflows
This approach is designed to protect capital during downturns while still allowing investors to benefit from long-term equity growth.
Designed to help investors stay invested
The AB Global Strategic Core Equities Fund - Active ETF aims to deliver lower volatility than the broad market, but goes beyond a singular focus on volatility.
The strategy aims to:
- capture 90% of rising markets
- fall only around 70% as much during sell-offs
- find high quality stocks, stable trading patterns and attractive prices
By focusing on QSP, the strategy seeks to deliver more consistent returns, helping your clients remain invested through market cycles.
Navigating the Terrain with Defensive Equities
Market pullbacks can be sudden and emotionally challenging. Many investors are tempted to hit the brakes and exit the market at precisely the wrong time. 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.
Defensive equity strategies can help reduce the emotional pressure by providing:
- shallower drawdowns
- more stable return patterns
- a smoother investment journey
This in turn helps the adviser to guide clients through uncertainty with confidence as the the role of the adviser becomes increasingly important. It’s up to you to maintain a steady hand on the handlebars to navigate through the ups and downs effectively.
Just as a skilled cyclist handles rough terrain with balance and control, defensive equity strategies can help investors stay upright, stay focused and stay invested. Even when markets become unpredictable.
Timing the Market Means Getting out and Getting Back In
Past performance does not guarantee future results.Annualized trailing three-year daily returns of S&P 500 and trailing three years daily returns where the best five days are excluded are calculated every business day from January 1991 (trailing three years goes back to January 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)
Client tools
We have prepared a range of tools to support you with your client conversations. If you have other ideas of how we can help, please get in touch.
Understanding and embracing volatility is crucial for those looking to build wealth over the long term. Please feel free to use these articles in your client newsletters to help educate your clients about volatility.
Related Insights
Looking for More Fund Information?
AllianceBernstein Investment Management Australia Limited (ABN 58 007 212 606, AFSL 230 683) (“ABIMAL”) is the responsible entity and issuer of units in the following Funds: the AB Managed Volatility Equities Fund - MVE Class - Active ETF APIR ACM0006AU (a unit class of the AB Managed Volatility Equities Fund (ARSN 099 739 447)), the AllianceBernstein Global Equities Fund (ARSN 099 296 607), the AllianceBernstein Dynamic Global Fixed Income Fund (ARSN 165 810 686), the AB Sustainable Global Thematic Equities Fund (ARSN 659 443 320) and the AB Global Strategic Core Equities Fund - Active ETF (ARSN 680 787 535). ABIMAL has appointed AllianceBernstein Australia Limited (ABN 53 095 022 718, AFSL 230 698) (“ABAL”) as the investment manager of the Funds. Product Disclosure Statement (“PDS”) are available for each Fund by contacting the client services team at AllianceBernstein Australia Limited at (02) 9255 1299 or at www.AllianceBernstein.com.au. Investors should consider the PDS in deciding to acquire, or continue to hold, units in the relevant Fund.
ABIMAL is the portfolio manager of AB Concentrated US Growth Managed Portfolio. Investors will not be able to invest in the Portfolio directly but only through an Investor Directed Portfolio Service (IDPS) or other managed account service under arrangements between the investor and the IDPS operator or the managed account provider (each an “Operator”).
The Operator will be responsible for the implementation of the Portfolio on behalf of an investor including the purchase and sale of any security in connection with the establishment of, or changes to, the Portfolio. The actual portfolio held by the Operator on behalf of the investor may vary from the Portfolios as constructed by ABIMAL. ABIMAL is not responsible for monitoring the Operator’s implementation of any Portfolios.
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A Target Market Determination (“TMD”) for the funds is available free of charge from our website www.alliancebernstein.com.au. The TMD sets out the class of persons who comprise the target market for the funds 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 set out in this document are not personal advice and have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this document nor the information contained in it are 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, forecasts and opinions (“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 in this report, neither ABIMAL or ABAL warrants that this document is free from errors, inaccuracies or omissions.
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