OREANDA-NEWS. April 13, 2015. Fitch Ratings has affirmed AllianceBernstein Emerging Market Debt (AB EMD) Portfolio's 'Excellent' Fund Quality Rating. The fund is managed by AllianceBernstein L.P. (AB; A+/Stable/F1).

AB EMD benefits from a robust and well balanced investment process that combines the independent inputs of credit and macro-economic research in a disciplined and formalised approach. The fund benefits from the depth of AB's fixed income and support resources, and a robust IT platform.

KEY RATING DRIVERS
Fund Presentation
Launched in March 2006, AB EMD is a Luxemburg-domiciled fund (Fonds Commun de Placement), with USD901m of assets as of end-February 2015, investing in dollar- and local currency-denominated emerging market (EM) sovereign, quasi-sovereign, corporate debt, currencies and derivatives. EM corporate debt is a strategic allocation in the portfolio, while local currency EM debt (EMD) is used more tactically.

Investment Process
The fund's investment process combines the bottom-up and top-down inputs of independent fundamental and quantitative research in a disciplined approach, while allowing portfolio managers sufficient flexibility in the diversification of sources of risks and returns. Economic, credit and quantitative research are conducted by independent teams. Research recommendations are challenged in formal review meetings and a consensus is sought on portfolio investment decisions.

Resources
The fund benefits from the depth of AB's resources, including the nine-strong, emerging market debt (EMD) team, led by Paul DeNoon. The team is supported by four dedicated economists, part of an economic team of nine, 37 credit research analysts, a quant research team of nine and a fixed income trading desk of 20. The IT platform is built around integrated proprietary and third party systems and risk analytics.

Track Record
The AB EMD fund has consistently outperformed the Lipper category "Bond Emerging Market Global Hard Currency", ranking either first or second quintile over one, three, five years and since inception. However, the fund lagged its benchmark, like the vast majority of EMD funds.

Asset Manager
AB is a diversified asset manager (USD488bn assets under management as at end-February 2015). AB has been investing in high yield debt and EMD since the mid-1980s and early 1990s, respectively. AB managed USD24bn in EMD across all portfolios as at end-February 2015.

RATING SENSITIVITIES
The rating may be sensitive to material changes in the investment or operational processes, or resources dedicated to the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could result in a downgrade. For example, this may be manifested in significant structural deterioration in the fund's performance relative to its benchmark and peers. Key man risk is limited given the depth of the credit team and the process-driven investment approach.

Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund analysis with rankings and performance data from Lipper, a Thomson Reuters company. Fitch's Fund Quality Ratings offer an independent, forward-looking assessment of a fund's key performance and risk attributes and consistency of longer-term returns, relative to peer group or benchmarks. The ratings focus on the fund manager's investment process, key fund performance drivers, risk management, and the quality of the fund's operational infrastructure.

For more information, please see www.fundmanagement.fitchratings.com