Ucits funds of absolute return funds outperform broader market for first time since 2008 – Alix Capital.

Data from Geneva based Alix Capital suggest that Ucits funds of absolute return funds have performed better than the broader market, according to the figures included in the company’s Ucits Alternatives Index (UAI) indices.

The UAI Funds of Funds index delivered 1.24% to the end of June, against a gain of 0.94% for the UAI Global index. Alix Capital’s UAI indices cover some 864 funds, including 793 single manager alternative Ucits funds and 71 absolute return Ucits funds of funds, with assets under management of €163bn as of the end of June. They are tracked through a family of some 26 benchmarks that cover both global and strategy specific Ucits absolute return funds.

The performance measured also saw the assets managed in Ucits funds of absolute return funds hit the €4bn level for the first time.

Overall Ucits absolute return fund assets under management rose by 5.6% in the second quarter of 2013, and by 17.85% since the start of the year.

Five out of 11 strategies have offered positive performance since the start of the year, with Long/Short Equity delivering the best performance of 3.39%, according to Alix Capital’s figures.

The overall best performing Ucits absolute return funds since the start of the year include ML Pegasus Ucits Fund, a long/short equity fund managed by Clareville Capital, which is up 28.22%, followed by the Odey UK Absolute Return Fund, also a long/short equity fund managed by Odey Asset Management, up 23.92% and the ML DUNN World Monetary and Agriculture Fund, a CTA fund managed by US based manager Dunn Capital up 21.10% since the beginning of the year.

The Credit Suisse Prima Multi-Strategy remains the largest fund tracked in Alix Capital’s indices with assets of €619m.

The Morgan Stanley Fundlogic and the Merrill Lynch Invest platforms are the largest fund platforms in term of number funds with 18 single Ucits absolute return funds ,while Deutsche Bank DB Platinum is the largest platform in term of assets with€2.56bn at the end of June.

Louis Zanolin, CEO of Alix Capital, said: “Ucits absolute return fund assets continued to grow during the second quarter of 2013. This is explained by several factors. The continuous shift from long only to absolute return fixed funds is probably the most important reason currently. Given the size of the long only fixed income market, one can expect this trend to continue if not to accelerate during the next quarters. Other key important drivers are linked to more secular trends such as the continuously increasing need for highly regulated and liquid products able to deliver consistent absolute returns. “

“We are seeing more and more US based investment managers launching Ucits funds. Fund platforms and their benefits in terms of easy market access are playing an essential role in this development. While they still only account for 5% of the total number of funds, US based managers represent 37% of all platform funds.”


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