Liquid Alternatives: YTD Returns for Alternative UCITS Strategies Swing Dramatically from 2018

December 10, 2019 | Liquid Alternatives, News

About 80% of alternative UCITS funds generated positive returns until end-October, with nearly all strategies doing well.

According to HedgeWeek, the LuxHedge Global Alternative UCITS Index has gained 3.22% year to date in October 2019, indicating the average fund in this space is in positive territory.

With very few exceptions, 2019 returns for the main strategy indices in the alternative UCITS universe have swung around from the previous year.

However, in 2018, every LuxHedge strategy ended in the red.

Top strategies in 2019

Meanwhile, some of the standout alternative strategy returns in 2019 were as follows:

Strategy YTD October 2019 2018
CTA & Managed Futures UCITS Index 8.86% -6.46%
Discretionary Macro UCITS Index 6.80% -2.84%
Multi-Asset Abs. Ret. UCITS Index 5.67% -5.21%
Absolute Return Bonds UCITS Index 4.23% -2.55%
Multi Strat. & Multi Mgr. UCITS Index 3.91% -5.82%


Laggard Strategies

Strategy YTD October 2019 2018
Multi-Asset Long/Short UCITS Index -1.96% -2.99%
Equity Market Neutral UCITS Index -1.82% -3.97%

According to LuxHedge, Equity Market Neutral funds are having their worst year ever on a relative basis. Discretionary and quant strategies have played a part in the debacle.

Moreover, according to Bloomberg, long-short styles and market-neutral portfolios are having a tough year due to a slew of reasons. These include doubts on economic growth that roiled value-based and small-cap trades, losing short positions, and the concentration of gains in a few stocks.

Further, fund manager Pictet Alternative Advisors recently liquidated the Pictet Select Global Long/Short fund. This fund had been launched for a single, unnamed client who has apparently reallocated their investment.

Alternative UCITS – AUM as of October

As of end-October, AUM was €390.2 billion across 1,378 funds. According to HedgeWeek, the trend of outflows witnessed during the first half of 2019, primarily in favor of bond funds, has stopped.

Related Story: Franklin Templeton and K2 Advisors Launch Liquid Hedge Fund Strategies in a UCITS format

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