There are two types of absolute return funds, and there are only 40 alternative Ucits funds to pass the hedge fund test. As a matter of fact, absolute return funds are far from a straightforward concept.
Multi-strategy funds have a far higher correlation to global equities than long/short equity funds, and especially market-neutral funds, according to research conducted by Natixis Global Asset Management.
In a video interview with EIE’s Tjibbe Hoekstra, Michael Ausfelder of wealth and asset manager Vermögenszentrum explains why he believes alternative Ucits funds are indispensable for modern-day portfolios.
The Argonaut Absolute Return Fund, a long/short European equity strategy, is Eddy Vanwittembergh’s favourite fund. He maintains the fund as his largest position in the fund-of-funds he runs at the Belgian wealth management company Merit Capital.
If investors use alternative Ucits funds, they prefer to allocate significantly. Some 42% of delegates at Expert Investor Europe’s Alternative Ucits Congress, held last week in Versailles, believe a medium-risk portfolio should contain more than 25% of alternative Ucits funds.
In Switzerland, there are more investors planning to increase exposure to high-yield bonds than to all other fixed income categories combined.
With volatile market
conditions prevailing, many
investors are turning to cash
as a risk-reducing measure.
But are they really doing
themselves a favour?
In this new series, we ask a fund selector to pick one of his favourite funds and tell us what makes it so good. We kick off with Omar Gadsby, who chose to highlight the Muzinich Long Short Credit Yield Fund.
European investors have responded to the recent slump in European bond prices by swapping their long-only fund holdings for absolute return funds, Morningstar’s latest fund flows report reveals.
José Luis Borges, head of institutional portfolios at BPI Gestao de Activos, is now underweight government bonds, and tells EIE’s Tjibbe Hoekstra why he has been investing in equity long/short strategies as an alternative.