US investment groups Alliance Bernstein and Goldman Sachs have both launched active bond ETFs with the former marking its entry into Europe’s actively managed exchange-traded fund market.
Nashville-based Alliance Bernstein, which runs $839bn in asset management and private wealth, plans to list three active fixed income ETFs – the AB Global, AB USD and AB EUR Corporate Bond UCITS ETFs – on the London Stock Exchange, Borsa Italiana, Börse Xetra and the SIX Swiss Exchange.
It manages over $17bn across 27 global ETFs in the US, Asia and Australia. The firm said its expansion in Europe reflects its “long-term commitment to ETFs as a core delivery vehicle for its investment solutions”.
Julie Gunts, global head of ETF strategy and partnership, said: “These ETFs are designed to meet growing demand for accessibility, transparency, liquidity and real-time pricing, while maintaining AB’s active approach.”
Meanwhile, Goldman Sachs has launched the mostly investment grade focused Global Credit Plus Active UCITS ETF (GCPA) and also the Global Income Bond Opportunities Active UCITS ETF (GIBO). Both will begin with unhedged share classes on the London Stock Exchange (LSE) and SIX Swiss Exchange. Hedged share classes will be available later on LSE, Deutsche Börse and Borsa Italiana.
GCPA and GIBO have total expense ratios (TERs) of 0.29% and 0.40%.
Goldmans launched 13 active ETFs last year, taking its total to 240 globally with assets under supervision of around $90bn.
Brendan McCarthy, global head of ETF distribution at Goldman Sachs Asset Management, said: “We continue to see strong demand for fixed income ETFs, particularly solutions that go beyond traditional index exposures.”
Our view
David Batchelor, senior analyst at QuotedData, said: “These Goldman Sachs and AllianceBernstein launches underline once again how quickly the European active ETF market is moving from experimentation to mainstream product development. What stands out is that both firms are focusing on fixed income, where active management arguably has a clearer role to play than in equities. This is due to some of the structural features of fixed income investing – namely fragmented issuance, credit risk, liquidity differences, duration sensitivity and debt-weighted benchmarks, which don’t apply to equity markets (we will be covering this topic in more detail in this Wednesday’s episode of Active ETF Intelligence – watch here).
“Goldman Sachs is adding broader credit and income strategies, while AllianceBernstein’s European debut comes through three corporate bond UCITS ETFs. That suggests large global managers see the ETF wrapper not just as a distribution tool, but as a credible way to deliver core active capabilities to European investors. The challenge now will be differentiation, as more major houses enter the market and investors become more selective about which active ETF strategies genuinely add value.”
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