Jan 17 (The following statement was released by the rating agency)
Fitch Ratings has affirmed AllianceBernstein Emerging Market Debt (EMD) fund's 'Excellent'
rating. The fund is managed by AllianceBernstein L.P.
AllianceBernstein EMD benefits from a robust and well balanced investment
process that combines the independent inputs of credit and macro-economic
research in a disciplined and formalised approach. The fund benefits from the
depth of AllianceBernstein's fixed income and support resources, and from a
robust IT platform.
KEY RATING DRIVERS
Launched in March 2006, AllianceBernstein EMD is a Luxemburg domiciled fund with
USD808m of assets as of end-December 2013, investing in dollar- and local
currency-denominated emerging market (EM) sovereign, quasi sovereign, corporate
debt, currencies and derivatives.
The fund's primarily bottom-up, investment process combines the independent
inputs of fundamental and quantitative research in a disciplined approach, while
allowing portfolio managers (PM) sufficient flexibility in the diversification
of sources of risks and returns. Economic, credit and quantitative research are
conducted by independent teams. Research recommendations are challenged in
formal review meetings and a consensus is sought on portfolio investment
The fund benefits from the depth of AB's resources, including the nine-strong,
largely, EMD team, led by Paul DeNoon, the fund's PM. The team is supported by
four dedicated economists, part of an economic team of nine, 35 credit research
analysts, a quant research team of eight and a fixed income trading desk of 20.
Over the past 18 months, AB has increased its capabilities in EM corporate
research, in line with market developments and the fund's allocation. The IT
platform is built around integrated proprietary and third party systems and risk
The AllianceBernstein EMD fund has consistently outperformed the Lipper category
"Bond Emerging Market Global Hard Currency". The strong track record is
illustrated by a Lipper Leader of four (second highest quintile) over five years
and three over three years. Over the past five years, the fund returned 85.7%,
outperforming its benchmark (JP Morgan EMBI - Global) and Lipper category by
13.3% and 21.3% respectively (second quintile performance). Last year proved to
be challenging, as the fund's performance was fourth quintile in its Lipper
AllianceBernstein, L.P., rated 'A+'/Stable/'F1' is a diversified asset manager
(USD451bn assets under management as at end-December 2013). AB has been
investing in emerging market debt since the early 1990s. AB managed USD27bn in
emerging market debt strategies as at end-September 2013.
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 driver could result in a downgrade of the
rating. For example, this may be manifested in significant structural
deterioration in the fund's performance relative to its benchmark and peers.
Fitch would take action if long term risk-adjusted performance relative to
peers, as indicated by Lipper scores, continues to deteriorate. Key man risk is
limited given the depth of the credit team and the process-driven investment
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.
For more information, please see www.fundmanagement.fitchratings.com
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Link to Fitch Ratings' Report: AllianceBernstein Emerging Market Debt Portfolio