Investors continued to put money into alternative UCITS
funds last year although inflows couldn't match levels seen in
Statistics from Lyxor AM, part of SocGen, show €31bn
($33bn) worth of new assets flowed into the products last
That was down from the record €70bn inflows seen in
Even so, the performance looks positive when compared to
€63bn outflows from long-only equity mutual funds in
"The figures indicate that investors were looking for
diversification in a time dominated by uncertainty and
political surprises," Philippe Ferreira, senior strategist at
Lyxor, wrote in a note to clients.
Alternative UCITS funds offer hedge fund style, absolute
return strategies within the UCITS regulatory framework.
Often asset classes are less correlated to traditional
markets and carry higher returns than fixed-income funds
challenged by negative interest rates.
Credit Suisse launched an alternative UCITS fund last week
focusing on trend-following, a strategy commonly used by hedge
funds using rule-sets that react to trends in the price and
volatility of stocks, bonds and currencies.
"Much the fastest-growing section of the hedge fund
industry, the alternative UCITS phenomenon shows no signs of
abating," Daniele Spada, head of managed account
platform, Lyxor Asset Management wrote last year.
"Investors need strategies to diversify their portfolios,
and this has led them to look to hedge funds. But they want
hedge funds in a regulated, transparent format, which is what
UCITS strategies are able to provide.
"What’s more, UCITS is tried and tested: the
regulation has been in place for several decades; so it is in
an advanced state and is trusted by investors.
"In the space of a few years, UCITS has become a powerful
brand, exerting the appeal of transparency and simplicity of
use on investors."