By Colin Keane
Until recently, traditional UCITS followed long-only strategies and offered relative returns to investors.
Late 2015 and 2016 saw significant market and political challenges; relative returns have been squeezed through rising fund operational costs, negative territory interest rates, and low bond yields. This presented a lot of problem for UCITS managers and their investors who continue to seek positive returns, and ultimately has led to a considerable shift in allocations towards uncorrelated asset classes. In 2016, there were outflows of €63bn in long-only equity mutual funds (according to Global Investor).