6. GLOBAL EQUITIES—MAY 2012
We see exceptional investment opportunities in emerging
Asia stocks. These economies are expected to significantly
outstrip developed-world growth. While not immune to a
global slowdown, they are less vulnerable than they used
to be. Their populations are richer, their companies are
more productive, and their domestic personal and business
consumption is a bigger driver of growth. Emerging Asia
nations also have less debt and higher savings rates than
their developed counterparts and, thus, enjoy greater fiscal
and monetary flexibility.
Even after a recent rally, however, Asia ex Japan stock
valuations remain well below long-term averages. Moreover,
valuation spreads between the cheapest and most expensive
Asia ex Japan stocks are unusually wide today, suggesting
outsize return potential for research-driven value investing
strategies as current market anxieties ease. History shows that
value investing has been highly effective in Asia, outperforming
strategies that emphasize growth and quality by a wide
margin, and with comparable or less volatility. Our research
also suggests that buying Asia ex Japan stocks when they are
as cheap as they are today can be particularly rewarding.
Despite similar quality metrics, our Asia ex Japan portfolio
trades at a significant discount to the market and pays a
higher dividend yield. It also has some of the strongest value
credentials among competing Asia ex Japan portfolios.
As such, we believe it is exceptionally well positioned to
take advantage of the burgeoning opportunities in emerging
Asia stocks, particularly in a value recovery.
! Offers exposure to the world’s fastest-growing economies
! Employs a distinctive value strategy with a strong history of success in Asia
! Relies on collaborative global and local research and portfolio management teams with extensive experience
investing in Asia
Why Asia Equity?
AllianceBernstein Asia Ex-Japan Equity Portfolio
Asia Ex Japan Stocks Are Cheap Versus History
Ratio(×)
1.0
1.5
2.0
2.5
3.0
04 05 06 07 08 09 10 11
Average
Price/Book: MSCI AC Asia ex Japan Index
Key Features of the AllianceBernstein Asia Ex-Japan Equity Portfolio
Value Investing Outperforms Other Strategies in Asia
Historical analysis does not guarantee future results.
Annualized performance and volatility of highest quintile relative to lowest quintile in the
Bernstein Asia ex Japan universe based on factors shown, as ranked by the Bernstein global
expected-return model. Asia ex Japan market data are from January 1992 through March 2012.
Source: MSCI and AllianceBernstein
Through March 31, 2012
Source: MSCI and AllianceBernstein
Factor Returns and Volatility
Jan 1992–Mar 2012
Volatility of Return Spreads (%) MoreLess
AnnualizedReturnSpreads(%)
0
2
6
10
14
8 10 12 14 16 18 20 22 24 26 28 30
(2)
Sales
Growth
Return
on Equity
Price
Momentum
Price/Book
Price/SalesPrice/Earnings
Earnings
Growth
Size
! Distinctive Value Approach
Our value focus distinguishes us from other Asia ex Japan services
and uniquely positions us to capture the burgeoning opportunity
in emerging Asia equities.
! Depth and Breadth of Research
Our collaborative global team of fundamental and quantitative
research analysts provides the deep company knowledge and
insights that drive our stock selection.
! Seasoned Investment Team
Drawing on our firm’s 20 years of experience in value
investing in Asia, our portfolio has delivered consistent
long-term outperformance.