A new report by London-based KdK Asset Management has found that UCITS funds of funds are struggling to attract assets, i
A new report by London-based KdK Asset Management has found that UCITS funds of funds are struggling to attract assets, in some way mirroring the traditional hedge fund world where single managers have been more successful than their multi-manager counterparts. The report finds that whilst UCITS represents the “gold standard” of investment funds, with EUR5.6trillion in AUM, UCITS FoFs are struggling to really capitalise on growing investor appetite for liquidity, transparency and regulation. The number of UCITS multi-managed funds launched over the last twelve months has reached 31, increasing assets y-o-y by 154 per cent from EUR1.83billion to EUR2.82billion. But that number is still small in comparison to single managed funds, and is hardly being helped by year-to-date fund performance languishing at -0.79 per cent, according to the UCITS Alternative Index. One of the key conclusions raised in the report is that UCITS FoF managers need to better promote their products in order to regain investors’ trust. They recommend that this could be achieved by better fund (or manager) selection, superior asset allocation and effective risk management. Bottom line is, investors are still far from convinced about the merits of UCITS multi-managed funds – better, more effective ways are needed to communicate their core benefits, it would seem. Other interesting details to emerge out of the report included a rise in funds charging performance fees – particularly in the 1.26 – 1.5 per cent range – and a surprising shift towards less frequent, weekly liquidity.
