INVESTING

AllianceBernstein Emerging Consumer Fund

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This week Money asks Lonsec where to invest and their pick is the AllianceBernstein Emerging Consumer Fund.

The fund is an active, long-only global emerging markets equities strategy. It invests in equity securities of companies across developed, emerging and frontier markets, which are expected to benefit from increased consumer spending.

AllianceBernstein employs a growth investment style in the management of the fund, which is not a particularly surprising approach within emerging markets investment. An interesting feature of the fundamental research effort is the investment team's participation in intensive and frequently "off the beaten track" research trips to key emerging markets to engage directly with aspirational consumers in their homes. In doing so, the team attempts to gain added insight into lifestyle trends and future areas of consumption growth.

Emerging markets

The typical portfolio is reasonably concentrated at around 50 stocks and constructed in a benchmark-agnostic fashion. Additionally, the fund can have concentrated exposures to the consumer thematic, meaning it is likely to be less well diversified by sector when compared with those with a broader emerging markets mandate.

The chart below compares performance for the reference emerging markets benchmark with a similar emerging markets consumer staples benchmark. Consumer staple stocks have clearly been a strong contributor to emerging markets performance since the GFC.

Lonsec takes the view that clients consider making discrete, long-term allocations to emerging markets and utilise specialist investment teams when accessing the asset class. The fund is a new entrant to the Australian market and Lonsec recently initiated research coverage with a "recommended" rating. The fund is viewed as a differentiated means of engaging with emerging markets and particularly suited to those investors seeking heightened exposure to the emerging market consumer thematic, which is likely to play out over multiple decades.

Lonsec graph 2

Lonsec graph

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