What Happened
AllianceBernstein (AB +0.34%), an asset manager, outperformed its competitors in the first six months of 2021 with a return of 38%, according to S&P Global Market Intelligence. It more than doubled the return of the S&P 500, which was up 15% year to date through the first two quarters.
AllianceBernstein's share price is up 35% year to date through July 13, which tops the average return for the financial sector, which is 24%.
Image source: Getty Images.
So what
AllianceBernstein had a strong first-quarter with revenue up 14% year over year to $1 billion and earnings per share climbing 29% to $0.81 per share. Assets under management (AUM) jumped 29% year over year to $697 billion, driven by $5.2 billion in net inflows into its funds, up from $3.2 billion in the previous quarter and net outflows of $5.6 billion a year ago. Equity, fixed income, and alternatives all saw net inflows.
That momentum continued through the second quarter as AUM increased 5.9% from the first quarter to $738 billion. The retail and private wealth channels had net inflows, offsetting net outflows from institutional clients in the month of June. Equity, fixed income, and alternatives all saw asset gains in the second quarter over Q1.
Now what
AllianceBernstein's assets are split pretty evenly between fixed income and equity, which gives it good diversification to perform in various market cycles. It also has a growing alternatives business.
While the first half was strong for equity markets, the company also got a boost from its municipal fixed income products, which rose on inflation fears. For the one-year period ended March 31, 91% of AllianceBernstein's fixed income products outperformed the market. Meanwhile, 67% of its equity funds and 65% of its fixed income funds have outperformed over the past five years, as president and CEO Seth Bernstein said on the first quarter earnings call. That has helped fuel solid performance over the years for this relatively cheap, steady, and efficient stock.
