Active Exchange Traded Funds (ETFs)

Understanding Active UCITS ETFs

An ETF share class is a type of share in a traditional mutual fund that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. The ETF share class structure allows investors to buy and sell these shares on a stock exchange (such as the London Stock Exchange), similar to how they would trade individual stocks. Investors are able access the mutual fund investment strategy either through the traditional shares or ETF shares, based on their trading preferences and investment goals.

Why choose an active ETF?

Potential for Above Benchmark Risk-adjusted Returns

Active managers (who select the investments that make up the portfolio) aim to beat index returns rather than just replicate them. They can react to changing market conditions and avoid or reduce exposure to poorly performing stocks.

Access and Flexibility

Active ETFs trade throughout the day (known as intraday), offering real-time pricing. They also offer daily disclosure of holdings and greater liquidity.

Targeted Strategies and Choice

They can focus on specific themes like sustainability or thematic investing. ETFs can also offer the opportunity for specialized outcomes like income generation or enhanced risk management.

Open Charging Structure

They have a clear charging structure and as they are listed on an exchange, active managers can adjust their portfolio holdings quickly to adjust to market volatility.

What are the risks of an ETF?

Investment markets, and their movements, are the biggest risk when it comes to ETFs. Like any investment, the value can go down as well as up, and you could get back less than what you put in.

Liquidity risk can also affect ETFs. You may be unable to buy or sell shares at a price that reflects the ETF’s true value. This risk can arise when there are too few market participants or when the ETF’s underlying holdings are themselves difficult to trade. In such conditions, price swings (up and down) can become more pronounced, contributing to broader market volatility.

Our Active UCITS ETFs

We believe that investment should be accessible to everyone. To learn more about AB’s range of Active UCITS, please speak to your financial adviser.

If you are unsure of the suitability of any investment, please consult a financial adviser. AllianceBernstein is not authorised to provide investment advice. The value of an investment can go down as well as up, and investors may not get back the full amount they invested. Capital is at risk.

This is a marketing communication. This information is provided by AllianceBernstein Limited, 60 London Wall, London, EC2M 5SJ. Registered in England, No. 2551144. AllianceBernstein Limited is authorised and regulated in the UK by the Financial Conduct Authority (FCA - Reference Number 147956). It is provided for informational purposes only and does not constitute investment advice or an invitation to purchase any security or other investment. The views and opinions expressed are based on our internal forecasts and should not be relied upon as an indication of future market performance. The value of investments in any of the Funds can go down as well as up and investors may not get back the full amount invested. Past performance does not guarantee future results.