AB High Yield ETF's Average People Pillar and Process Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy gets an Average Process Pillar rating.  The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

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SandRidge Energy

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. AB High Yield ETF earns an Average Process Pillar rating.    The leading factor in the rating is the stability of the management team. Specifically, the fund has not seen a manager change in the last eight years. Management team experience, which averages 20 years at this fund, also contributes to the process. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 41%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the High Yield Bond Morningstar Category, this fund's cash position and interest-rate sensitivity are historically in line with peers over the past few years. 

 This strategy's 12-month yield is 6.0%, lower than its average peers' 6.4%. In addition, it has a 7.2% 30-day SEC yield (a measure similar to yield-to-maturity). While a lower yield may deliver less income, it also tends to indicate lower credit risk. The portfolio holds assets with a higher average surveyed credit quality of BB, compared with the category average of B. Strategies with lower credit risk can typically withstand market turmoil more effectively.

Average

Process

AB High Yield ETF earns an Average People Pillar rating. Gershon M. Distenfeld, the longest-tenured manager on the strategy, provides strong guidance, bringing forward over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.8 stars, reflecting below-average risk-adjusted performance relative to category peers. Gershon M. Distenfeld has an experienced backdrop of support. The three listed managers boast 20 years of average listed portfolio management experience.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

AB remains focused on areas where it can build a sustainable advantage amid the pressure on active management, but adaptations have yet to quell long-held concerns. It earns an Average Parent rating.

AB, which had $742 billion in assets and 4,050 employees as of September 2021, is in the midst of moving its sales and back-office operations to Nashville, Tennessee, by 2024, with 1,250 roles slated to move. As of late-2021, there were 930 staff in the city. AB's investment staff will remain in New York, though some have volunteered to relocate. While AB continues to cut costs, it also seeks to invest in areas such as alternatives, private wealth management, technology, and environmental, social, and governance. Despite the headwinds to active management, AB has seen positive open-end flows in recent years.

AB's fixed-income platform remains an area of strength and has seen some notable tech innovations such as Alfa (a liquidity platform) and Abbie (a virtual bond trading assistant), though it's harder to point to the collective strengths of the equity division's group of boutique-like teams. Departures remain elevated; the firm abruptly announced the departure of seven fixed-income portfolio managers and economists in October 2021 as part of a revamp to focus on ESG and tech initiatives. Still, the depth of investment teams remains largely intact because of promotions and external hires.

Parent

AB High Yield ETF

HYFI is an actively managed fund of fixed income securities with high-yield credit rating and various maturities from corporate issuers around the world. Constituents are selected using a combination of quantitative and fundamental research, as well as both top-down and bottom-up analysis.

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Demand has been strong for short-term fixed income ETFs in 2023. That helped AllianceBernstein (AB) pass $1 billion invested in ETFs assets in early November.

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AllianceBernstein has launched the AB High Yield ETF (NYSE Arca: HYFI) as an active ETF on the New York Stock Exchange. HYFI invests at least 80% of its net assets in US high-yield corporate bonds and related derivatives.

News for AB High Yield ETF ETF (HYFI)