![\"alternative_ucits_experience_strongest_inflows_in_europe_in_q1-16.jpg\"](\"http:\/\/www.next-finance.net\/http:\/\/beta.next-finance.net\/wp-content\/uploads\/2016\/05\/alternative_ucits_experience_strongest_inflows_in_europe_in_q1-16.jpg\")
<\/a>Yet, in front of that, strong inflows into alternative UCITS in Europe have gone somewhat
\nunnoticed. According to Morningstar, alternative UCITS experienced net inflows of EUR 3.6
\nbillion in March, bringing the cumulated figure to EUR 7.7 billion in Q1-16 (based on the
\nuniverse of funds available for sale in Europe). <\/p>\n
The strong appetite for alternative UCITS is also in stark contrast with the outflows
\nexperienced by traditional asset classes: in Q1-16, equity mutual funds experienced
\noutflows of EUR 20bn and fixed income & credit funds saw outflows near EUR 13bn.
\nMeanwhile, money market and diversified funds also suffered outflows. Conversely,
\nalternative UCITS is the only asset class experiencing inflows in Europe during the first
\nquarter.<\/p>\n
The reasons for such appetite are multiple. On the one hand, the market environment has
\ndeteriorated over the last twelve months. European equities suffered a double digit
\ndrawdown with annualized volatility in excess of 20%, while Euro area sovereign bonds
\nalso experienced higher volatility than usual. On the other hand, the outlook for traditional
\nassets is clouded by many uncertainties: valuations across asset classes are rich,
\neconomic and earnings growth face dim prospects and a huge share of risk-free assets in
\nthe eurozone are yielding less than 0%… In this context, investors have piled into
\nalternative strategies that offer higher risk adjusted returns in relative terms. <\/p>\n
With regards to recent performance, the Lyxor hedge fund index is down 0.4% during the
\nlast week of April, and down 0.9% in April. Fixed income and credit arbitrage outperformed
\nwhile CTAs underperformed as a result of the rise in bond yields. <\/p>\n