Morningstar's "Cross-Border Liquid Alternative Fund Landscape 2019" study shows that the number of liquid alternative funds has risen by 76% over the last decade to 2,663. Why do you believe this asset class is growing so fast?
"Firstly, the fact that Ucits-compliant Alternative funds are here to stay even if they still need time to be fully understood from the investors' community. They represent a new source of Alpha different (but not necessarily disconnected) to that offered from traditional ones.
We all know that many investors were disappointed from recent performances and I assume many of us agree that liquid alternatives were struggling especially last year. But I think the key point is really to understand what each manager wants to achieve and in which way. Every alt Ucits is different from each other.
I agree with Morningtar's study when it says the exceptional growth was probably driven from expectations for this new asset class in a difficult market period for traditional asset classes. Regardless the risk return profile you are searching, (you must be clear defining that) I agree liquid alts space could be considered an"active kingdom" (as the study says). I guess they're a good field for innovation and solutions, too. But for sure, not suitable for every investor. As the study also indicates: Be aware from trends and look for transparency, competence, skills, specialization and coherence."
Davide Montaldo, fund selector at Banca del Piemonte