James Williams, Hedgeweek

Ashmore converts four funds into UCITS… Alternative UCITS make gains of 0.80 per cent in July…

Preliminary figures released by London-based consultancy firm ETFGI in its Global ETF and ETP industry insights report show that global ETF and ETP assets attracted near record net inflows of USD44.08billion through July this year. Coupled with strong market performance, total net assets have risen to USD2.16trillion as at end-July, 2013.

Equity ETFs/ETPs attracted the lions’ share of net inflows, gathering USD41.62billion, of which US funds accounted for USD32.99billion of that figure. Fixed income products attracted more modest inflows of USD5.1billion, suggesting that investors have a more risk-on appetite right now. Within fixed income, the report found that inflation-linked products recorded net outflows of USD650million. Commodity ETFs/ETPs also suffered net outflows of USD2.72billion, with precious metals bearing the brunt of those outflows, losing USD2.19billion.
 
Commenting on the report, Deborah Fuhr, Managing Partner at ETFGI, said: “Dovish comments from the Fed and positive market performance encouraged investors to put net inflows of USD44.08billion back into the market through ETFs/ETPs.” 
 
This week, Brown Advisory, a leading independent investment management firm with over USD40 billion in assets under management, announced the launch of a US Small-Cap Blend Fund under its Dublin-UCITS umbrella. 
 
The Fund offers investors broad exposure to the US small-cap universe by combining Brown Advisory’s US Small-Cap Growth and US Small-Cap Value strategies.
 
Logie Fitzwilliams, Head of Brown Advisory’s International Business said: “Over the past few years we have seen a number of US small-cap funds close to new investors and others move up the market-cap spectrum. This has left U.K. investors who want broad US small-cap exposure with limited options.
 
“We believe the small-cap environment remains attractive given the relative stability of the US economy and the fact that small-cap companies generally have greater domestic revenues than their large-cap peers.  In addition, corporate balance sheets are stocked with record amounts of cash so an acceleration in M&A is a possible catalyst for unlocking further potential upside in small-caps.”
 
The U.S. Small-Cap Blend Fund will be sub-advised by the management teams of Brown’s U.S. Small-Cap Growth and U.S. Small-Cap Value strategies.  The combined strategy will produce a portfolio of around 100 US small-cap stocks.  
 
Chris Berrier, the Small-Cap Growth Portfolio Manager said: “At Brown Advisory, we are ardent believers in building long-term oriented, relatively concentrated portfolios through rigorous, fundamental bottom-up due diligence.Through the combination of our two domestic small-cap strategies, we are able to continue to adhere to our firm's philosophy while delivering a portfolio that is more diversified, style-agnostic and generally more reflective of the broader U.S. small-cap landscape as represented by the Russell 2000 Index.”
 
The UCITS Alternative Index Global made gains of 0.80 per cent in July, leaving it up 1.74 per cent on a year-to-date basis. The best performers last month were equity funds, with the UAI Long/Short Equity index gaining 2.21 per cent. It is now up a very respectable 5.68 per cent on a YTD basis. Event driven funds also posted some encouraging figures, up 1.36 per cent, while macro and multi-strategy funds made gains of 0.63 per cent and 0.62 per cent respectively. The biggest losers last month were month CTAs and commodity-focused funds, recording losses of -0.45 per cent and -0.43 per cent respectively. The second best performing strategy so far this year is the UAI Multi-Strategy index, up 1.90 per cent, followed by the Event-Driven index, up 1.75 per cent. According to Alix Capital, total assets now managed by single-manager UCITS hedge funds has increased to EUR164billion.  
 
Finally, emerging markets specialist Ashmore Investments has decided to make four of its funds UCITS-compliant reported Citywire Global this week, in order to tap into more European markets. The changes were reportedly made through the Central Bank of Ireland. The four funds moved from being QIFs (Qualified Investor Funds) to UCITS funds on 6 August. They include: Ashmore Global Small Cap fund; Ashmore Latin American Small Cap fund; Ashmore Middle East fund, and Ashmore South Asian Stars fund. Christophe Hofmann, global head of distribution at Ashmore, was quoted as saying: “Many of our clients and distribution partners prefer – and often require – UCITS status, so the funds will now appeal to a broader audience and this will make distribution easier.

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