Noel Archard joined AllianceBernstein (AB) as Global Head of ETFs and Portfolio Solutions from State Street Global Advisors in February this year, arriving at a firm that had already started to make plans for its entry into the US ETF market. Additionally, Anita Rausch joined AB in June as the Global Head of ETF Capital Markets from WisdomTree.
Archard says: “It was fortunate that when the firm decided to go down this road of adding the ETF vehicle to the line-up, they put together a strong working group before I hit the ground.”
“There has been a lot of support to get this program off the ground, and the working group members have been very welcoming. We’ve made good progress and are looking forward to bringing products to market this year.”
Previously, AB only had one share class represented in an ETF in Australia, so the firm has built this ETF business from scratch.
“We have had a great stretch of years across multiple asset classes. We want to meet the strong demand from our clients’ requests for our strategies to be in an ETF format due to the usual reasons of liquidity and tax efficiency,” Archard says.
“AB has a great brand, but what attracted me most was the fact that they had this diversified footprint across separate accounts as well as mutual funds, and geographies which is growing.”
In total, the firm manages USD647 billion managing assets for institutional investors and the advised community including wealth managers, RIAs and brokers. There is no direct retail footprint but there is a private client group that manages money directly for high-net-worth investors.
The firm has filed with the SEC to launch its first two products: an ultra-short income ETF and a tax aware short duration muni product.
“Fixed income happened to be the strategy that made sense given where the market is – rates are going up and there is a little bit of portfolio repositioning going on. AB also has strong expertise in the muni space.”
Archard describes income provision as an ‘evergreen’ product. “It didn’t make sense to say that we were going to do nine equity funds and go along the whole yield curve with AB ETFs,” he says. “We wanted to be thoughtful about where the market is and what our clients’ needs are. Income and risk management in a portfolio are evergreen needs. The next tranche of launches will be looking at equity solutions.”
Archard says that AB does not want to be viewed as an equity, or fixed income, or even an alternatives shop. “We want the ETF line up to reflect the diverse group of investment solutions that we have in-house.”
He hopes to see more products launching in early fall this year, plus new products in 2023.
In terms of building that capital markets part of the business, the firm has hired ETF veteran Anita Rausch to head up the team. “She is one of the best industry professionals out there to build up a capital markets team,” Archard says. “Between us, we have a lot of connections across the industry and we aim to put out a more than credible experience for our partners.”
“We are building everything from scratch, which is all part of the fun. Within a firm like AB, you don’t have to reinvent the wheel. We have phenomenal professionals across the firm, and we are actively seeking subject matter experts in ETFs so we can have an integrated ETF offering across AB.”
Archard expresses his excitement coming from a position of strength at AB. “We are looking to the ETF as an offensive vehicle for us to reach more clients where they want to be reached.”
“We also want to look top down and see if it works as a mutual fund, a managed account and as an ETF and where that will fit into the model space. More and more firms are shifting to model portfolios to express the allocations and ETFs are a vibrant part of that business.”