AB Managed Volatility Equities—Carbon Offset Class (MVE—Carbon Offset Class)

The portfolio is anchored in low-volatility equities, as they represent typically low–carbon emitters. * Their potential to reduce downside portfolio risk may help deliver attractive investment returns over time.

There is a growing belief that putting a cost on carbon is an efficient way to attain greener outcomes by encouraging reductions in carbon emissions.

Redefining success as the performance of a carbon–neutral portfolio.

Illustrative Example

As of June 30, 2021
Green alpha calculation for illustrative purposes only. Portfolio, index, alpha and green alpha numbers are not real.
For this illustrative example, the portfolio's carbon emission is the same as that of the S&P/ASX 200 Index.
*Assumes CO₂ emissions for Scope 1 + Scope 2 + fossil fuels produced but not consumed ("carbon emission") are offset at A$22/t. Carbon emission is determined by referencing MSCI ESG data for each investment in the portfolio, where available (where the specific information is not available, industry averages have been used). Green alpha represents the relative performance of the portfolio after adjusting the relative performance of the cost of offsetting the carbon emission attributable to each investment in the portfolio. No further adjustment has been made for any duplication of carbon emission where the same emission is made by one investment entity and used by another investment entity in the portfolio.
Source: Bloomberg, BP Statistical Review, EIA, FactSet, MSCI, S&P Dow Jones, Worldscope, company reports and AB

We engage with companies to understand how carbon emissions impact their cost of capital and incentivise them to reduce their footprint. 

In an investment context, the word “green” is often loosely used to denote any strategy that is intended to be environmentally friendly or aligned with environmental, social and governance (ESG) objectives. In the case of the MVE—Carbon Offset Class, the word “green” refers to a specific and highly differentiated investment approach developed by AllianceBernstein in seeking to deliver positive outcomes for the environment and equity investors.

This approach can be summarised as: combining an active investment strategy investing in low volatility equities, valued after a price on carbon, with a focus on encouraging a reduction in carbon emissions.
There is no universal definition of what constitutes a “green” outcome. Please refer to AB’s Approach to Carbon Neutral.

^{*AB Managed Volatility Equities—Green was renamed AB Managed Volatility Equities—Carbon Offset Class (MVE—Carbon Offset Class) on 25 October 2023.}

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