Sammy Suzuki

AllianceBernstein (AB) has announced the launch of the AB Emerging Markets Strategic Core Equities Fund – Active ETF (CXA: MORE), providing Australian investors with exchange-traded access to AB’s Emerging Markets Strategic Core strategy. The listing marks the latest step in the continued build-out of AB’s active ETF platform in Australia.

The ETF is built on AB’s established Strategic Core framework, first launched in 2012 and managed since inception by Sammy Suzuki, Head of Emerging Markets Equities, alongside Co-Chief Investment Officer Denise Boynton. Together they bring more than five decades of emerging markets investment experience. The strategy seeks to provide core exposure to the long-term growth potential of emerging-markets equities while aiming to capture around 90% of market upside and roughly 70% of the downside over the long term.

Managing Director of the Australian Client Group, Ben Moore, said the listing reflected AB’s commitment to broadening access to its global capabilities for local investors.  “The build-out of our active ETF platform remains a key plank in our Australian distribution strategy. Following the listing of our Global Strategic Core Equities ETF earlier this year, adding an emerging-markets strategy gives investors another high-quality, actively managed building block in a convenient, transparent and liquid vehicle,” Mr Moore said.

“Emerging markets represent one of the most compelling long-term growth opportunities available today, yet many investors remain underallocated because of concerns around volatility and drawdowns. This strategy has been designed to address exactly that challenge,  pairing a proven lower volatility investment framework that protects the downside while providing the potential for long term capital growth with the accessibility of an ETF,” he said.

Sammy Suzuki, Head of Emerging Markets Equities, said the opportunity in emerging markets had evolved well beyond the perceptions many investors still hold. “Emerging markets are no longer simply a China story. Emerging economies now drive the majority of global GDP expansion, and that growth is often available at a meaningful valuation discount, supported by stronger balance sheets, deeper capital markets and improved governance. EM is also a key part of the AI opportunity, a theme too often viewed through a developed-market lens alone.”

AB believes this backdrop, combined with its downside-aware approach, makes the strategy a timely addition for investors building diversified, long-term portfolios.

“Our philosophy is built on Quality, Stability and Price. By combining fundamental research with quantitative risk management,  an approach we call ‘quantamental’, we aim to own high-quality, stable companies at a sensible price. That is how we seek to beat the market by losing less, giving investors a smoother path to participate in emerging-markets growth over the long run.  We call this winning by not losing,” said Mr Suzuki.

The post AllianceBernstein launches Active Emerging Market ETF on TMX Australia Exchange appeared first on AdviserVoice.

Sammy Suzuki

Disruptive demographic change in China—including the emergence of an affluent class of ‘millennial’ consumers—underlines the need for investors to take a more calibrated approach to emerging markets, global asset manager AB said yesterday.

“Our research shows that the days of making big money from emerging markets simply by investing in the relevant equity index are probably over,” said Sammy Suzuki, the firm’s Portfolio Manager—Strategic Core Equities.

“Slowing economic growth in China and other emerging markets means that the tailwinds which in the past drove the relevant indices upwards for so long have stopped blowing. Opportunities still exist, but they’re much more nuanced.”

The rise of the Chinese ‘millennials’ illustrated the point perfectly, said Suzuki. “It represents an important and potentially exciting investment opportunity but, to understand it, investors will have to monitor the evolution of these young consumers’ spending patterns very carefully.”

China has an estimated 300 million millennials, who were born between the early 1980s and 2000. They represent a sharp break with the country’s past, being the first generation in the history of the People’s Republic to grow up in relative prosperity and social stability.

They are better educated than their parents, having benefited from China’s roughly five-fold increase in spending on education during the last decade. About a quarter have had a tertiary education, making it likely that they’re in white-collar jobs and earning more than their parents.

“They’re already having a big impact on global consumption,” said Suzuki. “They love to travel and typically make four trips outside their country each year—twice as many as their Asian peers. They’re fuelling growth in domestic and regional airlines, airports and online travel agencies.”

Millennials are more adventurous than their parents, travelling further afield than Chinese mainlanders’ traditional holiday destinations of Hong Kong and Macau. South Korea is proving hugely popular, with half of all 20- to 40-year-old visitors last year estimated to come from China.

They are also developing their own tastes, with some millennials preferring luxury goods made in Korea to those made in France or Italy, which older Chinese typically buy as expressions of affluence.

“These new Chinese consumers are driving a boom in goods identified with Korean celebrities, including high-end skincare and cosmetics, fashion labels, technology—even cosmetic surgery to acquire celebrity looks,” said Suzuki. “Duty-free business at Korean airports is hopping as a result.”

Other markets likely to benefit as millennials travel further afield include Thailand, Japan, Singapore and Dubai. But, said Suzuki, “Investors should take note of how the cultural and social influences that are shaping millennial spending habits are changing fast, beyond shopping.

The post China’s millennials help re-write the rules on emerging-market investing appeared first on AdviserVoice.