On Monday, AllianceBernstein debuted a new international equity strategy, the AB International Low Volatility Equity ETF (ILOW).
ILOW seeks to give investors access to capital growth for the long term, while mitigating volatility. The fund is actively managed and has a net expense ratio of 0.50%.
“With the launch of our 15th ETF, we look forward to continuing our commitment to creating model-friendly products that, we believe, fit client needs in periods of growth and volatility,” noted Noel Archard, AllianceBernstein’s global head of ETFs and portfolio solutions. “ILOW will allow investors to tap into additional investment opportunities with exposures beyond the U.S.”
Low Volatility International Options
Primarily, assets chosen for the fund’s portfolio are equity securities of international companies. This includes non-U.S. companies and companies that are in at least three countries other than the United States.
In selecting international equities for the fund, ILOW applies both fundamental and quantitative research processes. Crucial factors for fund assets include, but are not limited to, profitability, experienced management, liquidity, low stock price volatility, and competitive advantages.
Along with company-focused scrutinization, the fund keeps socioeconomic and political factors in consideration when choosing portfolio allocations. Eligible securities will also be compared to general stock market performance to better determine potential value.
The fund’s portfolio will largely consist of both mid- and large-cap companies. The fund prospectus notes that ILOW also intends to invest in companies located in emerging markets.
To mitigate exposure to foreign currency exchange rates, ILOW may use currency-related derivatives. Through an actively managed strategy, the ETF may also be able to mitigate some of the broader risk present with international investing.
“AllianceBernstein has successfully converted a few ETFs in 2024, providing more strong actively managed choices for advisors. This new ETF offers a lower risk approach for international equities and can pair well with the firm’s other products,” noted Todd Rosenbluth, head of research at VettaFi.
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