NEW YORK, Oct. 3, 2011 /PRNewswire/ -- AllianceBernstein L.P. today announced that the firm recently incorporated a volatility management component into CollegeBoundfund, the 529 college savings program for which it serves as both Program and Investment Manager. Volatility management is designed to reduce market risk during periods of extreme volatility.
AllianceBernstein's volatility management capability, which is unique in the 529 college savings arena, leverages AllianceBernstein's Dynamic Asset Allocation (DAA) tools and process and is being made available in all of CollegeBoundfund's age-based and most of its risk-based portfolios. As a result, AllianceBernstein will have the ability to dynamically reduce exposure to equities in these portfolios depending upon its assessment of the near-term risk and return environment. When reducing exposure to equities, AllianceBernstein will be able to de-risk into bonds and cash as well as potentially hedge currency exposures when appropriate.
Daniel Loewy, co-chief investment officer and director of research for AllianceBernstein's DAA strategies, said: "Given the volatility in today's markets, investors are seeking strategies to help soften the impact of severe downside risk. With volatility management, we are seeking to smooth the investment ride for college savers by reducing their exposure to short-term volatility without compromising return—a key objective for savers looking to address the high rate of college inflation. Volatility management delivers a unique solution to help meet these needs and provides a significant benefit to participants."
AllianceBernstein is also adding a third age-based glide path, Conservative Growth (alongside its Moderate Growth and Aggressive Growth age-based options), for participants seeking a lower level of risk, especially in years just prior to and in college, and who are comfortable with a lower return potential.
With over $7 billion in assets, CollegeBoundfund is the nation's second-largest advisor-sold program according to Financial Research Corporation as of June 30, 2011.
AllianceBernstein is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private clients in major world markets.
At June 30, 2011, AllianceBernstein Holding L.P. (NYSE :AB ) owned approximately 37.8% of the issued and outstanding AllianceBernstein Units and AXA, one of the largest global financial services organizations, owned an approximate 62.4% economic interest in AllianceBernstein.