AB’s global CEO sheds light on changing dynamics in funds management, and suggests response to new investment risks

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New dynamics are coming to the fore in the way that global and Australian fund managers think about their businesses and deliver value for clients, the global head of investment firm AllianceBernstein (AB) said in Sydney yesterday. Seth Bernstein, AB’s President and Chief Executive Officer, said that the industry was entering a new phase of

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Concentrated equity strategies can boost returns and reduce downside in volatile markets, AB

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Investors seeking refuge from equity-market volatility in passive strategies should consider combining them with a concentrated equity allocation to improve overall risk-adjusted returns, global asset manager AllianceBernstein (AB) said yesterday. “While passive investing is cheaper on the surface, we think investors are taking on more risks than they know,” said Mark Phelps, AB’s Chief Investment

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Inflation targeting: Good strategy, but poor structure

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The monetary policy experiment of inflation targeting has failed to produce a more stable macroeconomic environment. The failure doesn’t stem from the wrong objective, but from the poor structure of the framework. Arguments to raise the inflation target will only work if the structure is changed as well. Inflation targeting In recent years, central banks

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Liquidity flows: Economic cycle still on sustainable path

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The US economy has faced persistent fears of setbacks, but the recovery continues to move forward. Our proprietary liquidity indicator suggests that the economic cycle remains on solid ground and that GDP growth in 2016 will be faster than in 2015. About the Liquidity Flows Indicator The Bureau of Economic Analysis (BEA) designed the liquidity

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Bonds still have a role in diversified portfolios: AB

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Despite bond yields at historical lows and interest rates rising in the US, bonds still have a role to play in diversified portfolios as a way of mitigating the shocks from volatile equity markets, global asset manager AllianceBernstein (AB) said yesterday. “The notion that bonds can still have an important role to play in portfolios

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The economy and Fed policy

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Real GDP growth rose by a 0.7% annualized rate in the fourth quarter, hurt by continuing cutbacks in energy capital spending, inventory liquidation and foreign trade. The bruising impact of cutbacks in energy capital spending isn’t over, but the major brunt of it is in the rear. Yet negative feedback from weak global growth and

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Disruptive effects of oil-price plunge

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Compared to past cycles, the oil-price plunge from mid-2014 through early 2016 has proven to be longer in duration as well as larger in scale. In turn, the adjustments in the economy (both negative and positive) will be larger and more persistent as well. Moreover, the high uncertainty over the future course of oil prices

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Pricing power adds pep to equities, says AB

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With China and emerging markets slowing down and fragile recoveries in the US and Europe, investors will struggle to find companies that can reliably increase earnings this year, says global asset manager AllianceBernstein (AB). However, Mark Phelps, AB’s Chief Investment Officer—Concentrated Global Growth, says that pricing power can help investors identify companies that are capable

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China’s FV policy in a tough balancing act

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An ongoing liberalization of China’s currency and capital account is under threat as the renminbi falls, capital outflows intensify and foreign reserves dwindle. Forging ahead with the reform and taking a pause to let the market settle down both have their pros and cons. Our base-case scenario is that Beijing will continue to walk a

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The Euro area in 2016: Solid growth, low inflation, easier policy

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We expect the recovery to continue in 2016, but growth is unlikely to be strong enough to generate a sustained increase in core inflation. In which case, the ECB is likely to ease policy further. The major risks to this view are external, particularly in the form of weak emerging market growth. But political fragmentation

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