Ibbotson International Shares High Opportunities - Bernstein

Bernstein  

Investment Style: Value (Global)

Bernstein Investment Research and Management (Bernstein) is based in New York and is a unit of AllianceBernstein LP, part of one of the largest global asset management groups. Ultimate majority ownership is held by AXA.

Bernstein's investment approach is value-based and research-driven. The firm believes that investors focus too heavily on near-term economic, industry, or company-specific events which create distortions between Bernstein's intrinsic valuation of a stock and its market price. Stocks vulnerable to short-term concerns can often become under-priced in relation to their long-term earnings power and dividend-paying capability. The firm has a value bias, and in most strategies, also a small- to mid-cap bias. Bernstein is willing to back its judgement and its tracking error is generally expected to be high.

Bernstein's investment process focuses predominantly on bottom-up fundamental analysis, although this is combined with quantitative techniques. The investment process essentially has four main steps: quantitative screening, fundamental analysis, portfolio construction, and trading.

For developed markets, quantitative screening reduces the universe from around 2,700 to 1,100 companies that have the most attractive value attributes. Inputs to the screening model include factors such as price/earnings, price/book, return on equity, and price momentum. Fundamental analysis then focuses primarily on the 1,100 screened stocks.

Analysts dissect corporate financial statements and company reports and also visit company management. They then build detailed models of historical and projected balance sheet and income statement information to estimate normalised earnings power, cashflow, and asset values for each of the next five years. Portfolio construction is conducted by the Global Equity Investment Policy Group, a team of senior Bernstein investment professionals.

Bernstein has a large team of both fundamental and quantitative analysts. The key individuals for global portfolios are Sharon Fay (CIO - Global Equities), Henry D'Auria (Co-CIO EAFE Equities and CIO Emerging Markets Equities), and Kevin Simms (Co-CIO EAFE Equities and Director of Global Equity Research).