AllianceBernstein Launches Five New Active ETFs

Press Release from Alliancebernstein

Lineup includes one Buffered product and four Fixed Income products in AB's ETF suite

NASHVILLE, Tenn., Dec. 13, 2023 /PRNewswire/ -- AllianceBernstein Holding L.P. (NYSE: AB) and AllianceBernstein L.P., a leading global investment management and research firm, announced today the launch of five active exchange-traded funds (ETFs) on the NASDAQ and New York Stock Exchange (NYSE) Arca: AB Conservative Buffer ETF [NASDAQ: BUFC], AB Tax-Aware Intermediate Municipal ETF [NYSE: TAFM], AB Tax-Aware Long Municipal ETF [NYSE: TAFL], AB Corporate Bond ETF [NASDAQ: EYEG], and AB Core Plus Bond ETF [NASDAQ: CPLS].

"On the heels of crossing the $1 billion threshold in active ETF AUM, these new ETFs will provide clients with a broadened suite of versatile products, built to help investors navigate the evolving market cycles we see coming in 2024 and beyond," said AB's Global Head of ETFs and Portfolio Solutions Noel Archard.

Details on the funds are as follows:

  • [NASDAQ: BUFC]: The investment objective is to seek a conservative level of capital appreciation while providing the potential for some downside protection against market declines. BUFC invests in a combination of exchange-traded options contracts on an underlying ETF (an ETF that seeks to track the investment results of the S&P 500 Index*). The fund's options strategy seeks to provide investors with returns based on the price return of the S&P 500, up to a cap, while providing a buffer against losses, up to a cap, of the S&P 500 over rolling 3-month periods. BUFC distinguishes itself from other buffered products with option resets done on a rolling basis, a proprietary ratchet feature and dynamic first loss provision.

"BUFC will allow our clients to access an evergreen options strategy delivered with all the efficiencies that come from the ETF wrapper," said AB's Head of Investment Solutions and Sciences Andrew Chin. "We are excited to offer a new investment option that aims to provide consistent returns with what we believe is a high level of protection."

  • [NYSE: TAFM and TAFL]: The investment objective of each of TAFM and TAFL is to provide relative stability of principal and a moderate rate of after-tax return and income. Each of TAFM and TAFL pursues its objective by investing principally in a national portfolio of both municipal and taxable fixed-income securities. Each of TAFM and TAFL invests at least 80% of its net assets in municipal securities. TAFM seeks to maintain an effective duration of four to seven years while TAFL seeks to maintain an effective duration of seven to fourteen years, under normal market conditions.
  • [NASDAQ: EYEG and CPLS]: The investment objective of each of EYEG and CPLS is to maximize total return through current income and long-term capital appreciation. EYEG pursues its objective by investing at least 80% of its net assets in investment grade fixed-income securities of corporate issuers. EYEG invests primarily in U.S. dollar-denominated corporate debt securities issued by U.S. and foreign companies (including developed and emerging market debt securities). CPLS pursues its objective by investing at least 80% of its net assets in fixed-income securities. CPLS may invest in a broad range of debt securities, including corporate bonds and debt and mortgage- and other asset-backed securities issued by U.S. Government-sponsored entities and federal agencies and instrumentalities that are not backed by the full faith and credit of the U.S. Government. CPLS may invest without limit in U.S. Dollar-denominated foreign fixed-income securities (including developed and emerging market debt securities).  With respect to each of EYEG and CPLS, AB employs a systematic investment process using a dynamic multifactor approach. This approach, which is implemented by AB through its proprietary research, investment and trading models and algorithms, considers a number of factors in seeking to generate alpha through a bottom‑up security selection process. 

"Our Fixed Income and ETF Teams continually seek to deliver AB's unique, tech-driven investment process in an active platform to both our clients and the broader ETF community," said AB's Co-Head of Fixed Income Scott DiMaggio. "Today's launch shows AB's commitment to continued innovation and collaboration across asset classes as we keep our clients' best interest at the forefront of our efforts."

Global quantitative firm Susquehanna International Group will be the lead market maker on the buffered product, and trading firm Jane Street will be the lead market maker on the four Fixed Income products – both bringing extensive industry experience and pricing expertise to AB's ETFs.

For more information and to learn more about AB's ETF platform, visit www.alliancebernstein.com/go/etfs.

About AllianceBernstein

AllianceBernstein is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals, and private wealth clients in major world markets. As of November 30, 2023, AllianceBernstein had $696 billion in assets under management. Additional information about AB may be found on our website, www.alliancebernstein.com.

Disclosures

Investing in securities involves risk, and there is no guarantee of principal.

Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.alliancebernstein.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.







Investment Risk

BUFC

TAFM

TAFL

EYEG

CPLS

Buffered Loss Risk

X





Buffer/Cap Change Risk

X





Capped Upside Risk

X





FLEX Options Correlation Risk

X





FLEX Options Liquidity Risk

X





FLEX Options Valuation Risk

X





Hedge Period Risk

X





Active Trading Risk

X





Non-Diversification Risk

X





Underlying ETF Risk

X





Cash Transactions

X

X

X

X

X

Derivatives Risk

X

X

X

X

X

Leverage Risk

X

X

X

X

X

New Fund Risk

X

X

X

X

X

Below Investment Grade Securities Risk


X

X

X

X

Credit Risk


X

X

X

X

Duration Risk


X

X

X

X

Illiquid Investments Risk

X

X

X

X

X

Inflation Risk


X

X

X

X

Interest Rate Risk


X

X

X

X

Market Risk

X

X

X

X

X

Municipal Market Risk


X

X



Tax Risk


X

X


X

Variable and Floating Rate Securities Risk


X

X


X

When-Issued and Forward Commitment Risk


X

X



Foreign (Non-U.S.) Investment Risk




X

X

Currency Risk





X

Emerging Market Risk





X

Mortgage-Related and Other Asset-Backed Securities Risk





X













Shares of the ETF may be bought or sold throughout the day at their market price on the exchange on which they are listed. The market price of an ETF's shares may be at, above or below the ETF's net asset value (NAV), and will fluctuate with changes in the NAV as well as with supply and demand in the market for the shares. Shares of the ETF may only be redeemed directly with the ETF at NAV by authorized participants, in very large creation units. There can be no guarantee that an active trading market for the Fund's shares will develop or be maintained, or that their listing will continue or remain unchanged. Buying or selling the Fund's shares on an exchange may require the payment of brokerage commissions, and frequent trading may incur brokerage costs that detract significantly from investment returns.

Buffered Loss Risk: There can be no guarantee that the Fund will be successful in its strategy to buffer against underlying ETF price declines. Despite the intended hedge period buffer, a shareholder may lose money by investing in the Fund. If, during a hedge period, an investor purchases shares of the Fund after the date on which the Fund has entered into FLEX Options or sells shares of the Fund prior to the expiration of the FLEX Options, the hedge period buffer that the Fund seeks to provide may not be available and the investor may not receive the full, or any, benefit of the hedge period buffer. The Fund does not provide principal protection, and an investor may experience significant losses on an investment in the Fund. Buffer/Cap Change Risk: A new hedge period buffer and a new hedge period cap are established each time the Options Portfolio is implemented, including after an upside-ratchet event. The duration of a hedge period cap or hedge period buffer may vary. Capped Upside Risk: If an investor purchases shares of the Fund after the first day of a hedge period and the value of the underlying ETF shares is at or near the hedge period cap for that hedge period, there may be little or no ability for that investor to experience an investment gain on their Fund shares unless the Fund engages in an upside ratchet of the Fund's Options Portfolio. If an investor does not hold their shares of the Fund for an entire hedge period, the returns realized by that investor may not replicate those the Fund seeks to achieve. If the underlying ETF experiences gains during a hedge period in excess of the hedge period cap, unless the Fund has engaged in an upside ratchet the Fund will not participate in those gains beyond the hedge period cap. FLEX Options Correlation Risk: Although the value of the FLEX Options structure held by the Fund generally correlates with the share price of the underlying ETF, the FLEX Options are exercisable at the strike price only on their expiration date, and their daily valuation will not change at the same percentage as the share price of the underlying ETF. Accordingly, the Fund's NAV or market price will not directly correlate on a day-to-day basis with the share price of the underlying ETF. FLEX Options Liquidity Risk: The FLEX Options are listed on an exchange; however, there is no guarantee that a liquid secondary trading market will exist for the FLEX Options. A less liquid trading market may adversely impact the value of the FLEX Options and the value of your investment. FLEX Options Valuation Risk: FLEX Options held by the Fund will be exercisable at the strike price only on their expiration date. The value of the FLEX Options will be determined based upon market quotations or using other recognized pricing methods. The value of a FLEX Option prior to its expiration date may vary because of related factors other than the value of the underlying ETF. During periods of reduced market liquidity, or in the absence of readily available market quotations for the holdings of the Fund, FLEX Options may become more difficult to value, and the judgment of the Adviser, as the Fund's valuation designee, may play a greater role in the valuation of the Fund's holdings due to reduced availability of reliable objective pricing data. Hedge Period Risk: The Fund's investment strategy is designed to deliver returns that reference an underlying ETF and are based on options contracts that are designed to be in place for 90-day periods, although in some cases the Fund will hold options contracts of longer duration. The Fund may not hold its Options Portfolio for the full duration of the options contracts, and the Adviser may change the Options Portfolio at any time, which would begin a new hedge period. There is no guarantee that any upside ratchet will be successfully implemented or that it will deliver the desired investment result. Active Trading Risk: The Fund expects to engage in active and frequent trading, which will increase the portfolio turnover rate. A higher portfolio turnover increases transaction costs and may negatively affect the Fund's return. Non-Diversification Risk: The Fund may have more risk because it is "non-diversified," meaning that it can invest more of its assets in a smaller number of issuers. Accordingly, changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund's NAV. Underlying ETF Risk: The Fund invests in FLEX Options that reference an ETF, which subjects the Fund to certain of the risks of owning shares of an ETF as well as the types of instruments in which the underlying ETF invests. Cash Transactions Risk: The Fund intends to effectuate all or a portion of the issuance and redemption of creation units for cash, rather than in-kind securities. As a result, an investment in the Fund may be less tax-efficient than an investment in an ETF that effectuates its creation units only on an in-kind basis. Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes produce disproportionate losses for the Fund. Leverage Risk: To the extent the Fund uses leveraging techniques, its NAV may be more volatile because leverage tends to exaggerate the effect of changes in interest rates, and any increase or decrease in the value of the Fund's investments. New Fund Risk: The Fund is recently organized, which gives prospective investors a limited track record on which to base their investment decision. Below Investment Grade Securities Risk: Investments in fixed-income securities with lower ratings (a/k/a junk bonds) are subject to a higher probability that an issuer will default or fail to meet its payment obligations. These securities may be subject to greater price volatility due to such factors as specific municipal or corporate developments and negative performance of the junk bond market generally and may be more difficult to trade than other types of securities. Credit Risk: An issuer or guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. Duration Risk: Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise. Illiquid Investment Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Inflation Risk: This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money.  As inflation increases, the value of the Fund's assets can decline as can the value of the Fund's distributions. Interest Rate Risk: Changes in interest rates will affect the value of investments in fixed-income securities.  When interest rates risk, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. Market Risk: The value of the Fund's assets will fluctuate as the market fluctuates. Municipal Market Risk: This is the risk that special factors may adversely affect the value of municipal securities and have a significant effect on the yield or value of the Fund's investments in municipal securities. Tax Risk: From time to time, the U.S. Government and the U.S. Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Fund by increasing taxes on that income. Variable and Floating-Rate Securities Risk: Variable and floating-rate securities pay interest at rates that are adjusted periodically, according to a specific formula. Because the interest rate is reset only periodically, changes in the interest rate on these securities may lag behind changes in the prevailing market interest rates. The value of the security may rise or fall depending on changes in interest rates between periodic resets. When-Issued and Forward Commitment Risks: These securities are purchased before the securities are actually issued or delivered. These securities are subject to the risk that, when delivered, they will be worth less than the agreed-upon purchase price. Foreign (Non-U.S.) Investment Risk: Investments in securities of non-U.S. issuers may involve more risk than those of U.S. issuers. These securities may fluctuate more widely in price and may be more difficult to trade than domestic securities due to adverse market, economic, political, regulatory, or other factors. Currency Risk: Fluctuations in currency exchange rates may negatively affect the value of the Fund's investments or reduce its returns. Emerging Market Risk: Investments in emerging market countries may have more risk because the markets are less developed and less liquid as well as being subject to increased economic, political, regulatory, or other uncertainties. Mortgage-Related and Other Asset-Backed Securities Risk: Investments in mortgage-related and other asset-backed securities are subject to certain additional risks, including extension risk and prepayment risk. The value of these securities may be particularly sensitive to changes in interest rates. Some mortgage-backed securities are to be announced (TBA) securities, which have additional risks.

AllianceBernstein L.P. (AB) is the investment advisor for the Funds.
Distributed by Foreside Fund Services, LLC. Foreside is not related to AB.

*S&P 500 Index: The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

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SOURCE AllianceBernstein

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