Market-neutral equity funds for example, which are seen as a possible substitute for fixed income because of their supposed non-correlation with equity markets, posted average returns of 3.7% in the 12 months to August this year. Consequently, net flows into the asset class have more than doubled: from €3.3bn in 2014 to €7.4bn in the same period this year.
Enguehard, again, is one of those attracted by this asset class. “I look for strategies with limited directionality such as market-neutral equity funds, which can protect you [against equity downside risk],” he says.
Equity long/short has also gained traction after suffering net outflows in the second half of last year. YTD net inflows (until August) stand at an unprecedented €10.1bn. To put this in perspective: long only European equity funds, by far the most popular asset class with fund selectors this year, pulled in a net €40.8bn over the same period.
“Long/short equity is now the most attractive strategy for me” says Pierre Molinero, who is in charge of the selection of alternative Ucits fund at OFI Asset Management in Paris. “It is the most liquid of all long/short equity strategies and you can find some really good, uncorrelated managers in this space.”
Click here to see a slideshow of photos taken at Expert Investor Europe’s Alternative Ucits Congress.
