Lyxor Asset Management is launching the cheapest ETF in Europe this week, bringing prices in the UK and the Continent in line with US products.
US equity exchanged traded funds (ETFs) were the preferred product for European investors looking at the ETF market in 2017, accounting for 15% of the market’s assets under management (AUM), according to Thompson Reuters Lipper research.
Returns from alternative Ucits funds have been disappointing over the past couple of years. But perhaps fund selectors have to blame themselves for this.
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.
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.
Low volatility and value are the most commonly used smart beta factor strategies among European investors. But decorrelation approaches which combine several factors with the aim of delivering more stable returns have the highest growth potential, according to a recent survey by the EDHEC Risk institute.
As alternative beta products become available to smaller investors, what are the potential benefits and pitfalls of the approach? By Will Jackson