AB Tax-Aware Intermediate Municipal 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 lowest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The fund's assessment results in 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

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. AB Tax-Aware Intermediate Municipal ETF earns an Average Process Pillar rating.    The main driver of the rating is the experience of the management team, which averages 18 years at this fund. A low expense ratio also influences the rating, with fees ranking in its category's second-cheapest fifth. Expenses reduce net returns and are one of the most reliable predictors of future performance. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 39%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Muni National Interm Morningstar Category, this fund has been consistently sensitive to interest-rate changes over the past few years. Moreover, it displays no significant biases in terms of credit quality, bond sectors, or maturity when compared to its category peers in recent years.   

  The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated A.

Average

Process

AB Tax-Aware Intermediate Municipal ETF earns an Average People Pillar rating. Daryl Clements, 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 3.6 stars, demonstrating encouraging risk-adjusted performance. Daryl Clements has an experienced backdrop of support. The three listed managers boast 18 years of average listed portfolio management experience. As a team, they manage 21 investment vehicles together, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha. None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

 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 Tax-Aware Intermediate Municipal ETF

TAFM is an actively managed ETF that primarily invests in investment grade municipal bonds from the US. The fund seeks to maintain an effective duration of 4 to 7 years.

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On the heels of crossing the $1 billion threshold in active ETF AUM, AllianceBernstein has launched five active exchange-traded funds today: two on the New York Stock Exchange, and three on the Nasdaq.

AllianceBernstein Launches 5 New Active ETFs

AllianceBernstein Hld

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.

News for AB Tax-Aware Intermediate Municipal ETF ETF (TAFM)