ML Capital reveals shift in sentiment among European Ucits investors
The latest ML Capital Alternative Ucits Barometer has revealed a shift in European investor demand away from CTAs and managed futures, to previously less favoured strategies.
Surprisingly, investor demand for European long/short strategies doubled in the last quarter, despite the volatility of the European market.
Two out of every five respondents stated they intend to increase allocations to this asset category. At the same time, only 6% of respondents indicated a reduction of flows into this strategy last quarter, down from 40% the previous quarter.
The most striking statistic, however, was the sentiment towards emerging markets. Almost all of the 50 European investors polled, with over $100bn in assets under management collectively, are bullish on the region.
As Asian markets have continued to outperform over a five year period, 97% of all investors expect to keep building their exposure to the region in the forthcoming quarter, seeing it as a “safe haven” in equity investing.
Many investors have names Indonesia and Malaysia key growth regions, and Latin America is also enjoying strong demand. Allocations to Latin American equity strategies have increased from 17% to 28% in six months.
Japan, on the other hand, lags behind as the Nikkei index has dropped to a 10 week low and overseas demand for Japanese product continues to retreat.
Demand for CTAs and managed futures has dropped this quarter. However, ML Capital notes “technical indicators suggest that the current environment will be very lucrative for trend followers.”
As a result, some investors do see these strategies as a great buying opportunities, the report states.