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UCITS investors seeking Global Macro and Event Driven strategies

Date: Tuesday, April 26, 2011
Author: Wealthadviser.com

In its latest survey on the growing market for New UCITS (NUCITS), ML Capital has seen that the largest growth in investor demand this quarter, has been for Global Macro strategies, with 87 per cent of respondents planning to increase or maintain their exposure to those funds.

ML Capital surveyed a diverse range of active investors in NUCITS, who collectively manage EUR40 billion and today invest upwards of EUR10 billion of those assets into NUCITS Funds. Questions were aimed at discovering their forthcoming strategy allocations and are asked each quarter to the same respondents in order to track asset flows between NUCITS strategies.

The survey also found that US Equity Long/Short funds remain the most popular equity strategy this quarter with 49% of investors looking for more exposure. In the Emerging Markets sector, the most popular choice is Global Emerging with over 40% of respondents planning to increase their allocations. Global Emerging funds have now overtaken Pan Asian strategies as the most popular route for emerging market exposure. However a clear bottleneck of supply may hamper growth in both sectors.

In addition, Event Driven strategies including those seeking to profit from corporate mergers, are also likely to see strong inflows. The most popular Event Driven strategy is Merger Arbitrage, reflecting the expectations of growing M&A opportunities.

Managed Futures and CTAs meanwhile, also received strong indications of support with 95% planning to increase or maintain their investments to the area. This strong demand will encourage an increasing number of CTAs to launch NUCITS over the coming year.

John Lowry (pictured), co-founder and Chairman of ML Capital, says: “NUCITS remains a fledgling industry with the majority of managers and investors yet to commit or reveal their hands. However, the sector is maturing rapidly and we are aware of a number of strategic developments being planned which will move the industry to centre stage over the coming months. Sitting on the side-lines does not appear to be an option any longer for most players.”