AllianceBernstein has launched a new UCITS III-compliant fund which will predominantly invest in European equities.

While the European Flexible Equity Portfolio will invest primarily in European stocks, up to 20 per cent of the fund will be opportunistically invested in other equity markets, the firm said in a statement. Exposure to equity markets will be adjusted dynamically using derivatives to try and preserve capital in adverse market conditions, it continued. The firm believes that it is this ability to adjust market exposure depending on the market environment which will be the primary benefit to clients.

The new fund is run by three portfolio managers: Michele Patri, who will be responsible for defensives; Chad Gex, who will oversee cyclicals; and William Johnston, who will cover financials. Patri has been designated team leader.

“We believe, in the long run, investors can outperform low-risk assets by investing in equities, and that active management can improve upon equity market returns,” Patri said in a statement.

“As volatility, market risks and return opportunities change over time, agile investors may be able to achieve better results by adapting their investment strategy to meet changing market conditions becoming more aggressive when conditions appear favourable and reducing exposure when the outlook is bearish.”