James Williams, Hedgeweek

Global fund asset inflows reached EUR109billion in Q2 says new EFAMA report… Alternative UCITS make a 0.65 per cent gain in September…

Alternative UCITS funds made advances of 0.65 per cent in September to leave them exactly +2 per cent on a year-to-date basis, according to Alix Capital’s UCITS Alternative Index Global.

The best performing strategy was equity long/short, gaining +1.61 per cent last month to leave it +6.96 per cent YTD; way ahead of the next best performing strategy – event driven - which recorded further gains of +0.93 per cent to leave it +2.79 per cent YTD. The UAI Emerging Markets Index also did well in September, up +1.19 per cent. Four strategies found the markets to be challenging however. UAI Commodities, CTA, FX and Volatility all recorded losses of -1.88 per cent, -0.41 per cent, -1.08 per cent and -0.54 per cent respectively.
 
Looking at the first nine months of the year, three strategy indices are down more than 3 per cent. The UAI Volatility is down -3.36 per cent, the UAI FX -3.31 per cent and the UAI Commodities -3.19 per cent. The strong performance in long/short equity funds has also helped fund-of-funds. They are up +2.50 per cent YTD after finishing 2012 down -1.34 per cent.  
 
London-based Alpha UCITS ltd this week announced the launch of the Amber Equity Fund on its Alpha UCITS Platform. The fund is managed by Milan-based asset management firm Amber Capital Italia SGR established by Joseph Oughourlian in 2001. The Amber Italia Equity Fund was originally an Italian domestic fund but has now been converted into a UCITS wrapper. Giorgio Martorelli is the fund’s portfolio manager. It is understood that most existing investors in the Amber Italia Equity Fund have subscribed to the new Lux-domiciled Amber Equity Fund. As such, the fund is expected to have approximately USD80million at the end of its ramp-up period. The fund’s strategy involves a fundamental bottom-up stock picking approach and focuses on investing long and short primarily in European equities although there is an understandable tilt towards Italian equities.
 
Mr Oughourlian was quoted as saying: “I am very proud of the launch of the Amber Equity Fund as it further strengthens our commitment to Italy, a country in which we strongly believe and where we have been present for many years. We are also confident that transforming the Amber Italia Equity fund into a UCITS fund will widen our investor base.” Added Martorelli: “The new fund will pursue the same strategy which has generated consistent returns for its investors with low volatility and very limited exposure to the equity markets.“
 
In other fund launch news, Universal Investment and London-based hedge fund manager Stratton Street are launching the Stratton Street UCITS Renminbi Bond Fund UI. The UCITS fund follows the strategy which Stratton Street has been running in its Renminbi Bond Fund since 2007. Rather than invest in the offshore CNH or ‘dim sum’ bond market because it remains too illiquid and expensive, the fund invests in high quality investment grade Asian bonds and uses currency hedges to gain RMB exposure.  Stratton Street employs a different approach to most fixed income managers. Rather than invest in index-based bonds which buy from the most indebted, Stratton Street buys from creditors “who can sustain their debts and pay us back”, said fund manager Andrew Seaman.
 
Hence why the strategy targets high growth creditor nations including China. Moreover, the firm believes that the renminbi, China’s domestic currency, will double in value over the next decade, which is why it uses an FX overlay. This allows investors to benefit from the expected appreciation of the renminbi and anticipated opening of China’ capital market.
 
Universal Investment, the fund’s management company, is headquartered in Frankfurt and has approximately EUR170billion of assets under administration. 
 
Finally, this week the European Fund and Asset Management Association (EFAMA) released its latest international statistical release containing investment fund industry results for Q2 2013. Worldwide net cash inflows amounted to EUR109billion, down slightly on EUR320billion in the previous quarter resulting from a sharp reduction in net inflows to equity and bond funds. Long-term funds registered net inflows amounting to EUR193billion during Q2, down on the figure of EUR402billion in Q1. Worldwide equity funds attracted EUR28billion in net new assets in the second quarter whilst bond funds attracted EUR31billion. At the end of Q2, assets of equity funds represented 38 per cent and bond funds represented 23 per cent of all investment assets worldwide. The US still dominates market share with 50.2 per cent, followed by Europe (28.3 per cent), Brazil (5.3 per cent) and Australia (5.2 per cent). 

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