Bringing you live news and features since 2006 

Alternative UCITS returned steady performance in 2019, says LuxHedge


Alternative UCITS funds had a very steady and solid 2019 overall, with the LuxHedge Global Alternative UCITS Index posted a gain of +4.2 per cent over the past year and more than 80 per cent of funds ending the year in positive territory. Except for Equity Market Neutral funds, all strategies had a very good year. Macro funds performed particularly strong with the LuxHedge Macro UCITS Index advancing +6.7 per cent in 2019.

LuxHedge writes: “2019 started with significant outflows for many Alternative UCITS funds and the first half of the year brought a total decline of -6 per cent in assets. Especially a few very established and well-known strategies suffered from investors withdrawing large amounts. The second half of the year saw investor flows stabilising again, with Assets under management in the total universe declining slightly with about -1 per cent.

“An average performance of a bit more than 4 per cent might seem rather small in comparison with the 2019 results for traditional asset classes. To put things in perspective, it’s important to realise that Alternative UCITS funds in general have an absolute return “Cash+” objective and as such don’t benefit much from gains in underlying equity or bond markets.
“The average fund, as measured by the LuxHedge Global Alternative UCITS Index, is not fully market neutral though. The average exposure to equity and bond markets has been about 13 per cent and 16 per cent respectively since 2008, so Alternative UCITS funds have benefitted somewhat from tailwinds in risk assets. Still after accounting for this effect, a positive alpha of roughly 0.5 per cent to 1.0 per cent per annum remains (after fund fees that is of course).

“We do notice that these average alpha’s versus different benchmarks are declining in recent years though. At the end of the day, we believe this may be the best explanation as to why 2019 was the first year where we witnessed net outflows for the universe as a whole. 
“Of course, these figures apply to the universe as a whole, as measured by our equally weighted index of funds. Since dispersion is typically very large between different Alternative UCITS funds, many investors who are able to pick the right funds for their portfolios do still enjoy superior returns.”                      

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by