AllianceBernstein Launches Large-Cap Active ETF

AllianceBernstein Launches Large-Cap Active ETF

AllianceBernstein joins in on the actively managed ETF craze. Active funds have grabbed significant inflows this year.

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Reviewed by: etf.com Staff
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Edited by: Mark Nacinovich

Global investment firm AllianceBernstein launched a new actively managed exchange-traded fund on Wednesday, continuing its push into the increasingly popular active management segment.  

The Nashville, Tenn.-based asset manager, with $694 billion in assets, unveiled the AB US Large Cap Strategic Equities ETF (LRGC), a large-cap U.S. stocks fund, which its prospectus defines as investing in companies large enough to appear in the S&P 500 index. The fund is the seventh launch for the company since it first entered the ETF market in September 2022 with two fixed-income funds, the AB Ultra Short Income ETF (YEAR) and the AB Tax-Aware Short Duration Municipal ETF (TAFI)

The fund is an adaptation of a separately managed account strategy the company has used since 2012, which is also run by the same portfolio manager. AllianceBernstein’s move to bring its active management strategies to the ETF market has coincided with major flows into active ETFs this year. 

“There is demand for active management in an ETF wrapper,” Brett Sheely, the firm’s head of ETF specialists, said in an interview. “We see that looking at our peers and the flows in the industry.” 

Active ETFs Gaining More Flows 

Active ETFs have received $99 billion in global inflows through the end of August, roughly 19% of total ETF inflows, according to research firm ETFGI. Active funds make up less than 10% of total ETF assets. 

Sheely said one reason for the boom in active ETFs was the adoption of the “ETF rule” by the Securities and Exchange Commission in 2019, which made launching different types of funds easier.  

Another reason was the market turmoil last year. 

“If you think back to 2022, the 60/40 portfolio didn't do well,” he said, adding that if an investor held the Bloomberg Aggregate Bond Index and the S&P 500, there was no ballast within the portfolio. “2022 was a bit of a wake-up call for folks.” 

AllianceBernstein did not provide performance data for its SMA strategy net of fees. 

Gabe Alpert is a former data reporter at etf.com with over seven years’ experience in financial journalism. He also previously contributed reporting and analysis to Barron’s Magazine, Investopedia and other publications.