Overall alternative Ucits strategies delivered solid performances in 2012, but managed futures struggled to keep up, according to the Q4 Alceda Quarterly Ucits review from Alceda Fund Management.
The top performer of 2012 was the Equity Long Short Index which delivered 6.19 per cent growth over the year.
Tracking the Absolute Hedge Global Ucits Index, the Alceda Ucits review revealed the sector had another positive quarter, with the Index advancing 0.8 per cent to bring total yearly gains to 3.02 per cent. As at December 2012, assets under management in alternative Ucits funds stood at EUR86.0bn, following a 1.5 per cent rise in the last quarter of 2012. The number of funds in the universe grew to 307 in Q4 from 299 at the end of Q3.
Performance across strategies varied strongly but equity long short strategies continue to make up the largest group of funds in Ucits. The Equity Long Short Index showed the strongest progression, ending the quarter 2.12 per cent higher, with six new fund launches in Q4, and showing an overall 6.19 per cent growth in the year. The Credit Index also ended the year on a high, delivering 5.97 per cent growth over 2012.
Despite a late rally, managed futures delivered another quarter of negative growth, with the Managed Futures Index declining 2.43 per cent. Over the year, the strategy lost 7.75 per cent, following its 10.10 per cent decline in 2011. Given its performance, it is perhaps unsurprising that the managed futures strategy was the main loser in terms of AUM which declined 10.9 per cent over the last quarter, with the larger funds losing significant assets over the quarter. The recently published guidelines of the European Securities and Markets Authority (ESMA) may have compounded this effect.
The global macro strategy continued to attract the most assets, with flows concentrated into the larger blue-chip names. Macro remains the largest strategy by assets under management, controlling 40 per cent of assets despite only accounting for 18 per cent of funds by number in the alternative Ucits sector.
Michael Sanders, chairman of the board, Alceda Fund Management, says: “We continue to be encouraged by the prospects in the alternative Ucits sector and believe alternative strategies in a Ucits format will continue to attract investors across the risk-spectrum in 2013.
“The last couple of years have been dominated by large and diverse funds appealing to the more risk adverse investors. This is particularly evident looking back at 2012, where we saw some of the bigger funds getting even bigger. In addition, asset flows were concentrated on funds managed by well established and diversified asset management houses, highlighting the importance of a good distribution network and brand recognition amongst investors. However, as risk appetite returns, we expect to see smaller and more nimble managers increasing their market share and challenging the bigger players to be more innovative in their offering.”