AllianceBernstein Seeks First Mutual Fund Conversion

Asset manager also plans four active ETFs, expects to more than double its lineup by year’s end.

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Reviewed by: Shubham Saharan
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Edited by: Shubham Saharan

AllianceBernstein Holding is poised to add five new actively managed products to its emerging exchange-traded fund arm, including a mutual fund conversion.  

Filings with the Securities and Exchange Commission show the firm has applied to issue the following four actively managed ETFs:  

The Nashville-based company has also filed for the conversion of a mutual fund into an active ETF focused on high yield bonds. If approved by SEC, the fund will seek to collapse shares of the AB High Yield Portfolio Class A (HIAYZ) and AB High Yield Portfolio Class Z (HIZYX) into the AB High Yield Portfolio Advisor Class (HIYYX).  

The five prospective ETF additions would add to AllianceBernstein’s two current funds, the AB Ultra Short Income ETF (YEAR) and the AB Tax-Aware Short Duration Municipal ETF (TAFI). The firm, which has more than $735 billion in assets under management, announced last February it would be launching its first active ETF in the U.S., just months after the appointment of former State Street veteran Noel Archard as its global head of ETFs and portfolio solutions.     

According to Archard, it’s a lineup that’s set to grow in the coming months.  

“As new strategies evolve at AB, we're pretty focused on it; we're more likely to release it as an ETF or as an SMA than necessarily a mutual fund,” Archard said in an interview with ETF.com.  

“We'll end up with anywhere from like eight to 12 by the end of year,” he added, referring to AllianceBernstein’s prospective ETF lineup. “Predominantly, the way that it's looking for this year, they're going to be active, but I don't take anything off the table.” 

Asset managers are converting more mutual funds to ETFs to take advantage of the latter’s tax benefits. Nearly 40 mutual funds have been converted to ETFs since the first switch in March 2021, according to ETF.com data. About $40 billion in assets switched in 2021 and 2022, and another $60 billion to $80 billion may convert this year, CFRA’s Head of ETF Data & Analytics Aniket Ullal projects

 

Contact Shubham Saharan at [email protected]       

Shubham Saharan is a markets reporter at etf.com. Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.