AllianceBernstein (AB) Goldman Sachs 2024 U.S. Financial Services Conference summary

Market and asset allocation trends

• Asset allocation trends remain positive, with expectations for continued momentum into next year, supported by a strong economy and anticipated Fed easing.

• Money is gradually moving from money market funds to fixed income, though the shift has been slower than expected.

• Fixed income markets are attractive, with robust demand and increased issuance, but spreads offer limited value on a risk-adjusted basis.

• Institutional flows face headwinds, but retail remains strong, and investment performance in underperforming strategies is improving.

• Equity searches, especially in value and global markets, are increasing, with notable interest in Asia and Japan.

Fixed income and equities strategy

• Manager selection in fixed income is increasingly focused on underwriting and security selection, as gains are driven more by rates than spreads.

• Diversification and systematic risk processes are key to outperformance, especially in investment grade.

• Active equity flows are strong in retail, driven by high active share and distinctive strategies, with stabilization signs on the institutional side.

• Large Cap Growth and value strategies are performing well, with growing interest in Europe and Asia.

• New teams and strategies, such as global growth from Germany, are gaining traction, especially in Europe.

Thematic growth and product innovation

• Active ETFs have grown to $5.5 billion, with 70% representing new strategies rather than mutual fund replicas.

• Expansion of ETF offerings includes 17 strategies, with offshore launches in Australia and plans for Taiwan.

• Cannibalization of mutual funds is minimal due to the focus on new products.