Alternative UCITS continue to edge higher

After a strong first quarter of the year, most Alternative UCITS funds continued to edge higher in April. The LuxHedge Global Alternative UCITS Index posted a gain of +0.58% last month, bringing year-to-date results for the average fund up to +2.52%. 4 out of 5 funds are able to post positive results so far in 2019. Nearly every strategy index showed a positive performance, with funds in Macro and Merger Arbitrage leading the pack.

Within the Equity Hedge strategy group, Equity Long/Short funds had again a very good month with the LuxHedge Equity Long/Short UCITS Index up +0.78% in April, +3.65% YTD. Especially strategies focusing on US (+8.28% YTD) and AP (+6.96% YTD) are performing excellent. In contrast, many equity market neutral funds are having a tough time in 2019 with only 2 out of 5 funds being able to generate positive performance in 2019.  The Equity Market Neutral UCITS Index is one of the only Alternative UCITS indices that is in the red: April -0.61% / -1.19% YTD.

Also Fixed Income Alternative UCITS strategies continue to rise with both Rates Long/Short UCITS (+0.27%) and Credit Long/Short UCITS (+0.57%) gaining ground in April.

Within the macro space, Discretionary Macro managers continue to have a very good 2019: LuxHedge Discretionary Macro UCITS Index +1.77% in April, +4.31% in 2019. After a difficult January for most trend followers, CTA strategies have recuperated strongly with the LuxHedge CTA & Managed Futures UCITS Index gaining +1.46% in April, +4.37% YTD.

LuxHedge Indices

Large Asset flows driven by a few giant funds

2019 is proving to be a year where investors are shifting allocations within Alternative UCITS by quite a bit and April was no different in this respect. Most notably, these large shifts seem to be due to fund specific reasons and are less driven by strategic, macroeconomic asset allocation considerations which would favour or disfavour certain strategy categories as a whole.

Within Discretionary Macro and Merger Arbitrage, a select group of a few funds continued to enjoy very large inflows of more than 1B in April. A new launch of a Hedge Fund Index tracking Fund of Fund was also able to very quickly grow its assets to more than 500MEUR, bringing now 1.7BEUR invested in the total Hedge Fund Index Replication category.

On the other hand, two very large funds in the Equity Market Neutral and Multi Asset Long/Short space continued to suffer from large outflows in April of respectively -1.3BEUR and -0.6BEUR.

For further details, please refer to monthly LuxHedge Market overviews