Fitch Resolves 'Under Review' & Affs 'Satisfactory' on AllianceBernstein
Thematic Research Portfolio
NEW YORK & PARIS -- January 21, 2014
Fitch Ratings has removed from 'under review' and affirmed the 'Satisfactory'
rating assigned to the AllianceBernstein Thematic Research Portfolio. The fund
is managed by AllianceBernstein L.P. (AB; rated 'A+'/ 'F1' with a Stable
Outlook by Fitch).
KEY RATING DRIVERS
AllianceBernstein Thematic Research Portfolio is a UCITS compliant,
Luxembourg-domiciled fund, with USD92.3 million of assets under management
(AUM) as of December 30, 2013. The fund originally launched as a technology
sector fund in August 1996, was subsequently restructured to a short-term
macro-focused thematic portfolio in Nov 2009 under Cathie Wood, and more
recently shifted towards a thematic growth-oriented portfolio in June of 2013
under Daniel Roarty. As part of the latter, the fund's macro focus was
removed, duration of themes shortened, and the volatility of themes reduced.
Daniel Roarty assumed a leadership role over AB's Thematic strategy as part of
reorganization within the firm in an effort to reduce volatility and increase
alpha. The Thematic strategy ($3.9 billion in AUM as of Dec. 31, 2013) was
merged with the Global Growth equities group ($3.9 billion in AUM as of Dec.
31, 2013) already headed by Roarty, and rebranded under the title Global
Growth and Thematic Equities.
Investment process has grown more disciplined under Roarty with the
introduction of standardized fundamental analysis across holdings, detailed
Excel models to analyze valuation, risks and buy/sell targets, and metrics
review at the theme and portfolio level.
Roarty joined the firm in May 2011 and was named sector head for the
technology sector on the Global/International Research Growth team on July 1,
2011, and team leader for that team in early 2012. Roarty previously spent
nine years at Nuveen Investments, where he co-managed a large-cap growth
strategy and a multi-cap growth strategy. His research experience includes
coverage of technology, industrials and financial stocks. Also joining the
team was Tassos Stassopoulous, with 22 years of experience and AB sector head
of consumer staples.
Flows have stabilized in the fund and the broader strategy. Performance has
also improved. The fund's Lipper ranking on both performance and volatility
(standard deviation) in 2013 have increased to a 2nd quartile among peer funds
also tracking the MSCI AC World USD index. However, the Lipper three-year
consistent return score remains at a 1 (lowest out of five) given the fund's
significant underperformance in 2011 under the previous strategy.
AB is a global, diversified asset manager (USD451 billion AUM at Dec. 31,
2013), approximately 64% owned by AXA S.A. (rated 'A'/'F1' with a Negative
Outlook). Equities represented 32% of AUM.
The rating may be sensitive to material changes in the investment or
operational processes, or resources dedicated to the fund. A material adverse
deviation from Fitch's guidelines for any key rating drivers could result in a
downgrade of the rating. For example, this may be manifested in the departure
of key investment professionals or in significant deterioration in the fund's
performance relative to its benchmark and peers, resulting from stock-picking
errors on large holdings.
Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund
analysis with rankings and performance data from Lipper, a Thomson Reuters
company. Fitch's Fund Quality Ratings offer an independent, forward-looking
assessment of a fund's key performance and risk attributes and consistency of
longer-term returns, relative to peer group or benchmarks. The ratings focus
on the fund manager's investment process, key fund performance drivers, risk
management, and the quality of the fund's operational infrastructure.
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is available at www.fitchratings.com
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Fitch Ratings, Inc.
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