October was the best month of the year so far for Alternative UCITS funds with the LuxHedge Global Alternative UCITS index advancing 0.68 per cent, bringing YTD gains to 2.29 per cent.
The total universe currently contains over 1400 funds, more than 75 per cent post positive returns year-to-date. In line with previous months and years, investors keep increasing their allocations to Alternative UCITS funds. Assets Under Management for the total universe went up with 1.8 per cent in October, now standing at 451 B EUR.
Performance gains were spread across most strategies. In line with the broader hedge fund market, CTA & Managed futures funds outperformed. Nearly all of the 100-plus CTA funds in the LuxHedge universe posted positive returns last month and the LuxHedge CTA & Managed Futures UCITS index increased by 3.07 per cent, still not recuperating all earlier losses (down 0.44 per cent YTD. After a solid month of September, discretionary Global Macro funds continued showing strong returns in October (LuxHedge Global Macro UCITS Index up 0.87 per cent).
Also Equity Hedge Funds continued on their upward path with the LuxHedge Equity Hedge & Event Driven UCITS index advancing 0.56 per cent in October (4.80 per cent YTD). All equity long/short indices posted positive returns with AP focused funds continuing to outperform all others. The LuxHedge Equity Long/Short Asia Pacific (incl Japan) index increased by 2.43 per cent in October which brings YTD gains to +23.14 per cent. Because many long/short funds keep a long bias, part of this performance reflects rising equity markets. Still many funds in this space are generating significant additional alpha on long and short side and do offer decorrelated returns (with reference to this recent article on how to select outperforming funds.)
The relatively large group of Fixed Income Relative Value funds continued to show moderate performance on average with the LuxHedge Fixed Income Arbitrage UCITS index showing a modest gain of +0.19 per cent (YTD +1.80 per cent). Largely 80 per cent of funds in this category are in positive territory for the year.